$1.5 Billion In Funding Approved for New Build Freight Railroad, Based On Study Performed By RLBA

What backers call the first greenfield freight railroad to be built in the United States since the late 1970’s has found $1.5 billion in funding, based on work that RLBA conducted.

The Unita Basin Railway project, as it is known, has been debated since the early 1980’s. “A few things are different this time in than in the past” said Michael McKee, Executive Director of Utah’s Seven County Infrastructure Coalition.

“The studies and work done in the past have all been helpful and informative and helped us get to this point. We’re further along in the process than we’ve been before.”

RLBA was engaged by the Seven County Infrastructure Coalition, an independent Utah political subdivision, to prepare a pre-feasibility level study or draft plan regarding the economics, commercial prospects, operations, operating and maintenance costs and engineering capital costs of a potential, new rail line connecting the Uintah Basin in northeast Utah with the national rail network at two, alternative, junctions in Colorado connecting with Union Pacific and BNSF. As part of its pre-feasibility study, RLBA:

1) Estimated demand over each of 20 years as manifest in carloads of commodities and products outbound from and inbound to the Uintah Basin by interviewing representatives of all potential customers of the prospective railroad;

2) Estimated all capital costs and continuing operating and maintenance costs incurred by the prospective, short line railroad to transport various commodities to/from the national rail system at two, Class I railroad junctions, as well as the cost to continue transporting said commodities to/from various, ultimate, rail origins and destinations across the country;

3) Identified the approximate location, need and cost of rail-related facilities, such as transload facilities, required or helpful to support the project;

4) Recommended an institutional business model for the project, including the construction of a revenue/cost model that included a 20-year forecast and

5) Conducted an alternatives analysis comparing the cost/benefit of transporting bulk commodities in and out of the Uintah Basin via the prospective railroad as compared with trucking said commodities to/from existing railheads. 

RLBA delivered an investment quality report to the client upon completion of the above tasks. Shortly after delivery, New York-based, Drexel Hamilton Infrastructure LP offered a reported $1.5 billion in design and construction costs through private financing. Drexel Hamilton, along with Rio Grande Pacific Corporation will build and operate the line through a joint venture pending approval by the Surface Transportation Board expected in 2020.