There is a 70-mile stretch of defunct rail line along the Mexican border in southeastern San Diego County known as the Desert Line. It’s a leg of the “Impossible Railroad,” a nickname earned decades ago that once again rings true.
A group of border-region business interests are eager to see the dream of rebuilding the Desert Line become reality, but the project is now mired in conflicts involving its latest owners and the Metropolitan Transit System – and at least two U.S. congressmen want to know just what the heck is going on.
The intoxicating possibilities of restoring a line first envisioned over a century ago has lured investors and drawn support from politicians, business and civic leaders on both sides of the border. A rebuilt Desert Line would provide a crucial link between auto factories and other manufacturers in Mexico and lucrative eastern U.S. markets. Supporters claim a fully functioning line would save money and reduce pollution as thousands of trucks would no longer have to take the trip across the border to connect with a rail line.
Two years ago, county transportation officials signed off for yet another company to take on the challenge of restoring the Desert Line.
And so far? Impossibility looms again.
Some investors want their money back or have shied away. Former project leaders have turned against current ones and the mess has brought allegations MTS officials were reckless with a valuable public asset.
We Stand Up for You. Will You Stand Up for Us?
When MTS (operating as the Metropolitan Transit Development Board) bought the line is 1979, they weren't given a choice. Southern Pacific Railroad, the owner at the time told MTDB "we'll sell the track in San Diego, but you have to buy the Desert Line as well." SP was looking to unload an unprofitable line and this was their way of getting rid of it. Since then, there have been a number of contract freight operators on the line and none has ever made a profit. Knowledgeable people railroading don't expect PIR to make one either.
The only entity consistently operating over portions of the Desert Line has been the Pacific Southwest Railway Museum and they use their own money to maintain the portion of the line they are authorized to use.
PIR may not seem like a competent developer of this rail line, but at least they're paying MTS a lot of money for it. For the time being, as a transit rider I'm happy MTS is able to get this income on a piece of property that they themselves don't really know how to develop. I'm personally more interested in how MTS spends that money to reinvest in local transit. In time, I hope the rail line does find a good suitor who can properly develop it and remove the promised 3000 trucks per day off the road. The current traffic congestion and air pollution issues are only going to get worse and cannot be solved by expanding highways. Finding more efficient transportation options will be a great contribution to this region.
Funny that Duncan Hunter (the younger) is blasting the misuse of this "asset" when his father Duncan Hunter (the elder) did all he could do to block the improvement and use of this line back in the late 1990's as a "gateway for illegal aliens"
Interesting picture above...
In the old days, there were wooden poles and telegraph lines running along the RR tracks.
Nowadays, the tracks are shadowed by SDG&E's 500kV transmission line lattice towers.
"I'm a lineman for the county"
Let’s deconstruct this issue a little further:
The story says, “A rebuilt Desert Line would provide a crucial link between auto factories and other manufacturers in Mexico and lucrative eastern U.S. markets.” Really? Has anyone asked those auto factories and other manufacturers if they would use the railroad if it were functioning? Seems like they haven’t. So is this the pure fantasy/hokum that is what is sometimes known as a scam? Malin Burnham is a smart guy, but does it make sense to sink money into a freight train without first finding out if there is a firm client base? Finishing the railroad might be seen as an accomplishment, but not unless there are enough clients to offset the costs.
To my knowledge, the Metropolitan Transit System was developed to help provide public transit in the San Diego area. At what point did they assume responsibility for moving freight and why? What expertise do they have in this area? Is freight a net contributor or drain on transit funds? Do we want MTS overseeing and diverting transit funds to the development of a freight railroad? What is the business case for this (i.e. is it a public service or is there a business case that it would help fund public services)?
For me, there are a lot of questions with no answers, but a lot of public money being spent to the benefit of a few.
@Chris Brewster Most factories, when given the option, will choose rail over trucks. It saves money and they can ship quicker and in higher quantities which save more money. Baja California Railroad which runs the Tijuana-Tecate portion is investing $20 million into it's infrastructure. They are doing that to only because there is a client base.
John Spreckels, who built the line died in 1927. His family sold their interest to Southern Pacific Railroad in 1932, which formed the San Diego & Arizona Eastern Railway (SD&AE) to assume operations on February 1, 1933. In 1976, Hurricane Kathleen blew into SD county. She destroyed large parts of the line. Southern Pacific tried to abandoned the line several times but was denied by the government. The Metropolitan Transit Development Board (MTDB) was looking for right-of-way to establish the trolley. They offered to buy the line from Downtown to San Ysidro and El Cajon. SP said yes but MTDB had to buy everything. This is how the trolley became a quasi freight operator. The freight is a contributor to public finds.But not much by comparison to the trolley. No public money has ever been spent as far as I know on the desert line. MTS has always leased it and the operators have been responsible for all upkeep.
Hope this answers a few questions. I do not work for any party involved in this. I just like history.
@Chris Brewster Yes - these factories have been asked...and are interested...as are other maquiladoras in the Tijuana-Tecate region. I've sat in on some of the conversations. This railway MUST function for manufacturing in our binational region to thrive. The business case is rock solid. No transit funds are being diverted. I am not aware of any US public money being spent on the project. This is a complex project involving the legal regimes of 2 different national governments (US and Mexico), state governments in US & MX, and local jurisdictions in US & MX as well.
Mr. Dick: With respect to your statement that no transit funds are being diverted, the article states, "MTS purchased 108 miles of the Impossible Railroad line in 1979 that included the Desert Line for $18.1 million." Were those not public funds? Since MTS owns the line apparently, is the failure to develop it in a reasonable timeframe not preventing a return on investment for MTS (assuming that is their intention)?
KUSI has reported, with respect to the company running the railroad, "A company called Pacific Imperial Railroad persuaded Metropolitan Transit System to lease the line to their company. But PIR has problems - namely, its principal owners have never run a railroad. What they have done is fight off lawsuits from dozens of investors who claim they've squandered millions of dollars on failed business deals." Would this not sound, to reasonable minds, like a scam and would it not concern reasonable people that MTS gave a company like this a 99 year lease? Where is the due diligence?
If the business case, as you say, is, "rock solid," why is the effort being run by people of this low level of reputation? If the business case is rock solid, why wouldn't more reputable individuals be involved and why would this effort not have been completed long ago? If this railway must function for manufacturing in our binational region to thrive, then why aren't competent people involved in making it so?
The story is a good one. The economics Mr. Burnham describes seem plausible on their face; but why then wouldn't competent managers and thoughtful investors have been attracted to complete this long ago? There are aspects of this that defy common sense.
@Chris Brewster Thanks for the terrific and insightful commentary. I'm on the Smart Border Coalition with Malin and remark that the handling of the Desert Line "defies common sense" is a polite understatement.
Tough questions are being asked, finally, and perhaps we will see some clearer thinking before its too late. The decision announced earlier this week by Hyundai to locate its new auto plant in Nuevo Leon Mexico over its first choice - the Tijuana maquiladora region (a $1.5 billion investment with lots of spill over benefits for both sides of the border) - due to the lack of adequate freight rail infrastructure should serve as be a wake up call.
You, Keats, Ari and others are spot on.
I would only add that when sophisticated private capital and management talent cannot be attracted to an ostensibly sound commercial opportunity such as this, there is usually a structural issue. The current fragmentation of the once unified rail line from San Diego to El Centro into 3 franchises with 2 government owners with disparate legal, economic and regulatory regimes is a non-starter. Had the MTS bothered to retain some expert advice from financial advisors with expertise in structuring public private infrastructure partnerships, perhaps we would could have saved years of nonsense. I hazard to say that even SANDAG could have done a better job in thinking through the proper ground rules.
Establishment of a bi-national "joint power authority" (with full responsibility for development of the system on both sides of the border) is a logical first step in attracting competent operators. The business case for a $200- 300 million investment in a short line rail system is there, I've seen the models, but a harmonized and viable concession structure is not.
This does not have to be a Chunnel, and the federal, state and local governments on both sides of the border could potentially collect tens of millions annually from a properly structured public private infrastructure partnership. Federal funding is available, capital markets are receptive and customer demand is robust.