Thoughts and Opinions On Today's Important Issues

Thursday, May 21, 2009

DRTP And The Michigan Central Depot

Are OMERS' Michael Nobrega and CP RAIL still "paying their dues?" Could it possibly be that DRTP, their joint partnership, is helping out Canada another time as part of Canada's pressure play on the Bridge Company?

This map from the HUB conference is why Canada is so interested in taking over the Ambassador Bridge. It is the key component in Canada's central gateway and corridor into the US. I mentioned this idea before but now it is so much clearer. Every little pressure point helps to allow Canada to achieve its goal.

If I am right, the Ambassador Bridge lawsuit should be fascinating as people are called to testify under oath. I'll be able to find out how good my conspiracy theories are. And they are looking better and better as time goes on.

Transport Canada again described the Ambassador Bridge in these terms at the conference:
  • Windsor-Detroit is busiest border crossing in North America:
    –Handles $126 billion (2006 Canadian dollars) of two-way surface trade:
    35% of total Canada-United States (U.S.) trade, by value;
    40% of Ontario-U.S. trade; and
    over 60% of Ontario-Michigan Trade

    Ambassador Bridge alone handles 99% of Windsor-Detroit truck traffic
    –Jobs in region and across U.S. dependent on this border crossing:
    Indiana –150, 000 Michigan –220,000
    Texas –520,000 California –830,000.

Obviously, this was designed for US presentations since no Canadian jobs were mentioned!

Oh Lord is DRTP back in the picture again? Does this help explain the demonization of Matty Moroun for the past few months in Detroit and now in Windsor? Don't forget that the Star was a big DRTP supporter at one time.

The modus operandi for the DRTP doublestack rail tunnel is so similar to the DRTP truck tunnel project that failed. Work in a stealth fashion to get supporters, try to get as many governments as possible onside, promise to do an environmental assessment and ask for a ton of money from the Canadian Government but not the US it seems to help finance it. Before it was BIF money, now there has to be some infrastructure project where cash can be allocated

Read this story about the doublestack rail tunnel being proposed by DRTP. It is the first time that I have seen it linked to Moroun's depot:

  • "Mich. Central Station’s fate uncertain as new int’l rail tunnel proposal stews
    By Justin Miller

    DETROIT — A proposal to build a new railroad tunnel linking Michigan with Canada is making waves in a part of the city already grappling with the abandoned Michigan Central Station, the long-abandoned towering railroad station Detroit officials want torn down, historic preservations want to save and others see as a potential development opportunity and possible stop on an international high-speed rail line.

    The Canadian Pacific Railway is asking the Canadian government to fund a $400 million project to build a rail tunnel adjacent to the twin tunnel that emerges in Detroit’s Corktown neighborhood between Bagley and Fort streets. Canadian Pacific wants the new rail tunnel to accommodate tall double-stacked rail cars that can’t pass through the existing Michigan Central Rail Tunnel built in 1910.

    Marge Byington, government affairs director for the Detroit River Tunnel Partnership, which owns and operates the existing tunnels, said a new tunnel portal in Detroit would emerge further away from the river than the current opening because the new underground crossing would be deeper and necessitate a longer approach to the surface.

    As such, the new opening and tracks would likely be located in the middle of the current rail yard behind Michigan Central Station.

    There’s no problem with the depot being there. The depot can be there. In fact [the proposed new tunnel portal] doesn’t infringe on any part of the depot,” Byington said, adding that the land in question is owned by the partnership. [NOTE: Methinks the lady doth depot too much!]

    Michigan Central Station is controlled by billionaire Matty Moroun, who also owns the Ambassador Bridge a mile away. CenTra Inc., a holding company of Moroun’s, said it supports a new rail tunnel but believes the proposed location may not work.

    “We’ve been supportive of the concept of a double-stack rail tunnel to benefit the region … but of course the devil is in the details. There are other alignments that certainly work better,” said CenTra’s government relations director, Mickey Blashfield.

    The depot may not be an issue by the time a new tunnel and rail tracks are built as the Detroit City Council voted in April to destroy the historic depot by using federal stimulus money and then charge Moroun for the cost.

    But in an effort to make the depot a resource to the city instead of a drag, Moroun’s company submitted a proposal to the federal government’s General Services Administration. The GSA is seeking to rent 50,000 square feet for 15 years on at least three acres of land for the Department of Homeland Security in Detroit. It’s unknown what precise deal Moroun’s company is offering GSA, but Blashfield said it is to rent the depot.

    However, if GSA takes up Moroun’s offer it will still leave a great deal of the building unoccupied, leaving room, potentially, for a reopened transportation facility at the site. Blashfield said the company would be open to making the depot into a multi-modal station accommodating high-speed rail and buses.

    If a new freight tunnel is constructed, the old one could carry passenger rail from Detroit to Windsor, joining planned high-speed rail corridors connecting Chicago to Detroit in the United States and Windsor to Quebec City in Canada. The two could hypothetically be joined to create international rail service like the one offered by Amtrak between Seattle and Vancouver.

    Neighborhood impact

    Not to be forgotten in the dealings between foreign governments and a billionaire businessman is the community that would absorb the new rail line and tunnel: Mexicantown.

    The neighborhood adjacent to Corktown is already criss-crossed with rail lines that emerge from the existing freight tunnel and is bisected by roadways that connect to the Ambassador Bridge located on Mexicantown’s riverfront.

    Adding another tunnel and rail tracks to the infrastructure mix in the neighborhood could harm the area, said Mexicantown Community Development Corporation Vice Chairwoman Fern Espino.

    “If it’s going to be what it sounds like … where a train comes up there, there would be train noise and there would be noise pollution for the neighborhood,” Espino said, adding that this would be less of a problem for Mexicantown than if the extra rail capacity would reduce truck traffic from loading facilities that would congest and pollute the neighborhood, home to North America’s busiest international border crossing.

    On the upside, the Detroit River Tunnel Partnership’s Byington said construction would create 1,700 construction jobs and an unspecified number of jobs to maintain the tunnels. However, Espino questioned whether these jobs would benefit the neighborhood.

    “If it’s 1,700 jobs and it’s for our economic benefit there, where Mexicantown would actually benefit, then hooray,” Espino said. “But if it’s 1,700 jobs for someone else to benefit and its detrimental to the environment and detrimental to health, then no.”

    Byington said the Detroit River Tunnel Partnership will submit its environmental assessment to U.S. and Canadian officials within the next few months so that the proposal can start being evaluated by relevant authorities on both sides of the border."

The most interesting line in the story and perhaps the real reason why someone wanted the Depot torn down

  • "The depot may not be an issue by the time a new tunnel and rail tracks as the Detroit City Council voted in April to destroy the historic depot."

The outcry about Moroun and the Depot had nothing to do with the "blight" reasons that were given! That was just the cover story to work up the masses and get some media coverage.

You now know that I have been suspicious of the role of DRTP given the report that I found that knocked out a DRTP-type project a long time ago. Yet it came back as a serious competitor to the Bridge Company for a new crossing. I still do not know if it was part of Canada's plan to terrorize Moroun into selling out but it would not surprise me if it was true.

Now DRTP is seeking money from Canada through one of its owners, CP Rail:

  • "The Canadian Pacific Railway is seeking funding from the federal government to build a new tunnel under the Detroit River that can accommodate taller trains, a senior company official said Wednesday.

    The $400-million border-crossing tunnel would run parallel to the current one, Christopher Jones, CP Rail's manager of infrastructure, told the Hub '09 International Multimodal Conference in Windsor.

    "We need government support through the (Ontario-Quebec Continental) Gateway initiative to make it happen," he said."

Is this for real----maybe yes, maybe no. Unfortunately the Transport Minister may not have been given the correct script and said this:

  • federal Transportation Minister John Baird, who was also at Wednesday's conference in Windsor, said it is not on his priority list."

It gets very confusing then doesn't it. If there is no interest by the Feds and several years ago CP said they had no interest in a doublestack rail tunnel, why is Moroun being attacked on a project that may never go anywhere? Why would CP be so eager to build a new tunnel while at the same time they are selling out most of their interest in DRTP back to OMERS. That hardly makes sense.

Is this CP Rail's contribution, is this how they are paying their dues? But for what?

Here is part of a speech given by Mr. Nobrega in 2006 that may shed some light on this:

  • "We invested $175 million in the Detroit River Tunnel Project, a rail tunnel between Windsor and Detroit. CP Rail, one of Canada’s two continental railroads, is our partner. We are committed to investing another $300 million of equity to significantly expand this corridor to create a one-billion-dollar trade gateway asset."

Here is what he said recently:

  • "We are currently invested at the Windsor / Detroit border crossing where one of the largest infrastructure programs must take place in order to protect hundreds of thousands of jobs.

    OMERS has paid its dues and will continue to invest in the Province of Ontario and the rest of Canada."

Hmmm what project in Windsor would cost a billion dollars? What could be "one of the largest infrastructure programs. Certainly NOT the doublestack rail tunnel. OMERS would be an equity partner for $300 and the balance would probably come from other pension plans and Sovereign funds as debt perhaps.

This sounds like the kind of structure of P3 deals that I have read about in which Macquarie was a world leader and now one can see the trouble they are in.

Hey, wasn't OMERS opening up an office in London to attract money for big projects. Didn't Nobrega want to be a Super Fund and have the Government force pension plans to give him their money to invest presumably in infrastructure. OMERS is a huge infrastructure investor who "has paid its dues."

Oh my, I think I may be on to something now. I wrote in another BLOG:

  • "Why would OMERS have invested in a DRTP disaster? I don't think they did. Was DRTP just a placeholder for the future? Nobrega’s speech was very specific and for a reason in my opinion. He reminded the former Minister of Energy and now the Minister of Finance that OMERS is owed one for something that it did.

    The questions remain. Is OMERS going to get the DRIC project financing or have they figured out that it is not going to move forward now? Was the speech nothing more than saying that OMERS needs its pay-back too for trying perhaps to help squeeze out Moroun."

Could it be that several years ago, OMERS was lining itself up for the new bridge project as the finance partner for a P3 deal? Did OMERS/CP Rail expect to get that deal and was Nobrega reminding Spanky and others of that fact? Does that mean that there was an arrangement made years ago about what would happen here?

Is DRIC then nothing more than a gigantic sham? Again, the real Canadian intention being to build a Government owned twinned bridge after Moroun was forced to sell out?

I suspect that the provincial government insider who used to give Gord Henderson all of that useful information for his column knows the answer to that. He seemed to know so much. If only Gord had given us a clue who he/she was we could pose some insightful questions.

Frankly, I think Gord knows the answer too. I think if you, dear reader, go back and read his border columns, you will discover the answer. I am sure that he must have given us some hints along the way.

As for me, I have 7 years of Henderson columns to read! The solution is in there, somewhere.

PS. Please note how Southwest Detroit is being hammered, one project at a time. DIFT, DRIC and now DRTP! Separate environmental assessments without looking at the overall impact on that area of the city. More SW Detroiters who could be impacted negatively. More hits to the Detroit tax base.

Is anyone concerned about this and has outed the Governments on this? Ken Cockrel should be leading the charge on this given the Resolution he introduced years ago. Why is he so silent?

I believe that the Bridge Company has done so in its lawsuit. But most Windsorites won't know about that. The Star did not publish any information about this part of the case.