(The following article by Bob Tita was posted on the Crain’s Chicago Business website on January 16.)
CHICAGO — The plan to untangle Chicago-area freight traffic, already staggered by a shortage of federal funds, has suffered another blow with Canadian National Railway Co.’s recent withdrawal from the railroad-government consortium guiding the project.
The defection of the Montreal-based railroad calls into question the viability of the $1.5-billion plan, known as the Chicago Region Environmental and Transportation Efficiency (Create) Program, which aims to clear up bottlenecks, eliminate street crossings and improve commuter train service. The plan is considered critical for maintaining Chicago’s status as the nation’s rail hub — and for sustaining the booming distribution economy, which has supplanted the manufacturing sector as a source of local economic expansion and job growth.
“We’re facing this as a project that might never be completed,” says Jim Kvedaras, Canadian National’s senior manager for government affairs.
Canadian National executives reached that conclusion after Create received only $100 million in last summer’s federal highway bill — $500 million below what planners had expected. The Illinois Department of Transportation hopes to contribute $100 million to the project, but that outlay is contingent on approval of Gov. Rod Blagojevich’s $3.2-billion capital spending proposal, which is sure to face opposition in the General Assembly this spring.
“The combination of a low federal commitment, the absence of a state commitment and the railroads’ uncertainty about how much of a commitment they’re willing to make makes us very, very concerned,” says Jim LaBelle, deputy director of business civic group Chicago Metropolis 2020, which has been one of the project’s biggest advocates. “We need to make sure it gets done.”
The number of rail cars handled in the Chicago area is expected to nearly double — to 67,000 a day — by 2020, as the rail business surges with shipments of foreign-made goods off-loaded at coastal ports and transferred to other railroads or loaded onto trucks in Chicago. Unless bottlenecks along the region’s 2,796 miles of track are reduced, experts predict the railroads will seek to develop alternate, faster routes through other hubs like St. Louis or Memphis, Tenn.
TO-DO LIST
Create calls for upgrading track, switches and signals, as well as building underpasses, to alleviate roadway congestion and reduce train-car collisions (Crain’s, Jan. 2). It also sets plans to reroute some rail lines, including a stretch of Canadian National track on the Near South Side known as the St. Charles Air Line. The city has long considered it a nuisance for nearby Dearborn Park residents and an impediment to further South Loop redevelopment.
Create proposes building a $100-million alternate route, allowing the St. Charles line to be removed. But the federal funding shortfall means there won’t be enough cash to support the project, leaving Canadian National executives with little reason to pony up their estimated $17-million share of all six railroads’ anticipated $100-million contribution to launch Create. When the 2003 agreement outlining the railroads’ participation came up for renewal at the end of the December, Canadian National declined to re-sign. None of the railroads has yet paid into Create.
“We couldn’t justify the initial investment,” says Canadian National’s Mr. Kvedaras. “We’re not opposed to the project, but we’d be coughing up a percentage of the funds without getting any benefits.”
So far, other railroads haven’t followed Canadian National. The others still hope to cobble together $300 million in federal, state and railroad contributions. But rail executives acknowledge that the lack of government enthusiasm and Canadian National’s departure have set the brakes on Create.
“It’s slowing down the process because nobody has clarity as to who the partners are,” says Thomas Livingston, a vice-president with Florida-based railroad CSX Transportation Inc. “I think it’s incumbent on us to get together with a sense of urgency to figure out what the new Create is.”