As decribed in the lates Trains magazine (not available on line), Brightline is currently building tracks so that it can privately operate high-speed trains from Miami to Orlando. A few weeks ago, the company’s effective parent, Fortress Investment Group, was headlined in Forbes for “betting $9 billion that America’s transportation future is passenger rail.”
But things aren’t looking too bright for Brightline since then. For one thing, it has completely shut down its existing passenger train operations due to the pandemic, and doesn’t know when it will be able to revive them. (That may be just as well, as it was losing money on those trains anyway.)
More recently, plans to rebrand the operation “Virgin,” presumably with a significant investment by Richard Branson’s Virgin group, have fallen through. Branson told reporters that he had not actually invested any money into Brightline and that the plan to rename Brightline after Virgin was just a “marketing agreement.”
Meanwhile, at the other end of the country, Fortress’ plans to raise money to build a high-speed rail line from Victorville, California to Las Vegas aren’t going so well either. Bond buyers are rightly skeptical that the project will work, especially considering that, last year, Brightline only attracted half as many paying customers as it projected and the average fare paid by each of those customers was less than 60 percent of what was projected.
Close scrutiny reveals that the implication in the Forbes article that Fortress was investing $9 billion of its own money in the projects is exaggerated. Much of the money for the Florida project came from federal tax-exempt bonds. Nearly 80 percent of the money for the California project is supposed to come from state private activity bonds. Fortress was only going to put up $600 million of its own funds for the $5 billion project.
On top of that, Brightline is trying to convince Miami-Dade County into giving it $425 million in up-front costs plus $61 million to $81 million per year in operating costs and track rental fees to run a commuter-rail line. The region has already spent more than a billion dollars in capital costs plus roughly $100 million a year operating a parallel commuter-rail line that only produces $13 million a year in fares; why does it need another such loser? And what happened to the idea that Brightline was going to be privately funded?
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The Antiplanner has stated in the past that the Florida Brightline project is the only high-speed rail line in America that has a chance of succeeding, mainly because there is a huge cruise ship market in Miami and many of those passengers will be interested in going to Disney World and other Orlando attractions. But COVID-19 has put the cruise ship business into a coma, and no one knows whether it will ever revive. When Brightline is done spending $2 billion building to Orlando, it may find that it has no customers.
By comparison, the Victorville line makes no sense at all. Unlike Miami, Victorville (population 122,000) has no cruise ships providing a captive customer base.
Instead, the rail line will require Los Angeleans to drive a hundred miles or so to Victorville, then park and wait for a train that will take them 187 more miles to Las Vegas, where they will be stranded without a car. The train might be able to make the trip in 84 minutes compared 163 minutes by car (according to Google maps), but that doesn’t include the time waiting at the station for the train to leave and the extra hassle of not having a car in Las Vegas.
Fortress Investment was co-founded by Wes Eden, who likes sports so he bought the Milwaukee Bucks and persuaded the city to build the team a $524 million arena. He also likes trains, so he bought the Florida East Coast railway and is busy persuading various government agencies to help him sell bonds to run passenger trains.
Eden says one of his strengths is to get other people to “suspend disbelief” about projects like this. I won’t suspend mine until the line is actually making money and paying off its bonds.
The Cruise ship industry Is bouncing back.
Royal Carribbean has record booking post, and stock price has gone up.
Even so, spending 2 Billion on a rail line only makes sense if it pays off it’s capital costs in less 25 year timeframe because in 25 years the rail life expectancy is to the point it has to be replaced or refurbished. High speed rail, even shorter time frame.
Shanghai’s maglev cost 60 million per mile to build for 20 miles. Building a 237 mile track to orlando from miami would cost 14 BILLION. at 25 dollars per one way ticket, would take 568 Million riders to amortize even with 100,000 riders per day would take 15 years to pay off capital costs. Buses from that region cost 20 dollars.
It’s part of what I said as an Onion joke High speed buses. If you built aerodynamic buses with low centers of gravity and power them by overhead lines on a dedicated highway you can get 100 mph or more and run buses up major interstates. Problem is they cant go anywhere else? Once off the interstate then where to unless you have transit after you get off
@lazyReader, i’m not sure what you’re looking at for the cruise industry. They’re still under no sail orders in the US. Some people are speculating that even if they do come back in the fall, the flu season outbreaks of Covid19 will end up just shutting them back down.
They just had another ship in Norway shut down cuz of an covid19 outbreak onboard. 95% of the industry’s world wide capacity is not in service. I do not know but I suspect whatever bookings numbers we’re, there isn’t much for skin in the game for people booking.
IIRC the industry recently required decent sized deposits when booking. I believe most if not all of the major players have waved those. If that’s the case, if I call up to book a trip in Feb 2021, I don’t have any skin in the game. I can always change my mind.
One of the reasons Brighline has shut down it’s service is that it’s bleeding. Another is that FEC is still not compliant with FRA PTC requirements. Not operating passenger trains helps them avoid a few more hoops to jump through.
I’m nto sure what that means for the Orlando extension. By the time that’s built, if the PTC isn’t FRA compliant, they may not be able to operate passenger trains on FEC track.
Grupo Mexico bought FEC a few years ago.
The Miami / triRail pissing match is weird. Not sure who knows whom down there that Brightline’s gotten that much traction with their proposition. The reasoning is so sophomoric; so flawed that the only rational explanation is graft.
IMHO – at this point it’s not a matter of if but when Brightline goes tits up.
Virgin’s been willing able to throw Texas-size piles of cash at dodgy project in the past. That they weren’t willing to for Brightline is a smell that this was a pretty severe game.
What plays out when that happens? Does Amtrak swoop in a la Autotrain and take over, maybe in cooperation with Florida DOT?
The Victorville-Lost Wages line sounds like a problem in search of a solution. But I’m sure if they can extend it to Palmdale, the CHSRA connection will make everything OK.
Another reason the Vegas – Victorville train will crash and burn: it’s now a single-track railroad with departures every 45 minutes.
As for extending to Palmdale making things OK (Hugh Jordonn), no joy there, either. This from a Ridership/Revenue report commissioned on their behalf: “Few imagine a train that does not travel the full route to Anaheim.
They are not much more excited about getting on at Palmdale. (Only) from Burbank on they will drive and park to have the experience.”