Rail plan still a bad deal

Published Tuesday, April 14, 2009

The commuter rail proposal for metro Orlando goes before another Florida Senate committee today with the same flaws that have made the deal indefensible from the start. The state would pay CSX too much for the tracks and provide the company too much immunity from liability in the case of accidents — even those caused by CSX's own negligence. The Senate needs to change these provisions or kill the deal.

The issue has never been whether commuter rail for the Orlando area makes sense. It is time to start building a transportation alternative in Central Florida before its growing suburbs require more massive spending for new roads and interstate lanes. But the deal for the 61-mile rail line is too costly in up-front costs and long-term exposure.

Under the plan, the state would convert an existing freight line from DeLand south through Sanford and Orlando to Poinciana. The state would pay CSX $150 million for the tracks and make an additional $496 million in upgrades to CSX facilities and to a CSX freight line west of the commuter system. Beyond the up-front payout of $646 million, multiple governments would spend another $615 million to create the commuter rail and its amenities. That money would double-track the line to accommodate both freight and commuter traffic. The federal government would pay half the capital costs, the state would pay one-quarter and the five local funding partners — Orange, Seminole, Osceola and Volusia counties and the city of Orlando — would pay one-quarter.

It would be irresponsible in the best of economic times for the state to spend hundreds of millions of dollars on rail work for CSX that has nothing to do with commuter service. At the very least, the transaction should include a clear price for the tracks. The roughly $10-million per-mile price tag under the current proposal would make the CSX deal one of the costliest rail purchases in history. Given the modest ridership projections, and the choices lawmakers must make in this recession, it is not clear the price is anywhere close to fair.

The deal also makes taxpayers responsible even if CSX were to cause an accident. In single-train accidents, the state and CSX would be responsible for losses their trains would cause. But the state would pay for any damages to passengers or anyone at the station or along the rail corridor regardless of whether its train, or CSX's, was involved in a single-train crash. In crashes involving multiple trains, the state would still be responsible for travelers and others hurt along the rail line. The state would protect CSX from liability even if it caused an accident out of negligence or misconduct.

The public policy of Florida, in other words, would be to create a disincentive for a for-profit freight carrier to put safety first. The state would purchase $200 million in liability coverage to protect against any damages by CSX, and it would charge, among others, rail vendors for the price of the insurance policy. The vendors selling magazines at the station, for example, would be taxed to cover CSX's liability. Charging the little guy to protect the big rail company is fundamentally unfair.

Orlando Mayor Buddy Dyer, Central Florida legislators and other rail supporters are lobbying hard for the project, but they are overselling their case. This is not about a stimulus for the economy. Federal funds are not guaranteed. The success of the Orlando project has no real bearing on rail proposals in the Tampa Bay area. They are throwing out these arguments because the CSX deal cannot stand on its merits. Senators need to pare back the costs and the liability protections when the proposal comes up today in the Senate's transportation appropriations committee. Or they should move on and try again next year.


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