June 9, 2014 at 1:00 am

Detroit River rail tunnel bid awaits state aid

A Canadian Pacific train exits the Michigan Central Railway Tunnel. (Steve Perez / The Detroit News)

Lansing— A transportation budget awaiting the Legislature’s final approval would dedicate $10 million toward construction of a Detroit River rail tunnel between Detroit and Windsor in a bid to stop losing freight traffic, including vehicle shipments, to other states.

The appropriation is the first taxpayer commitment to a long-sought $400 million project that needs $200 million from governments on both sides of the river before digging can commence.

The Continental Rail Gateway project calls for construction of a single-track tunnel under the river that is tall enough to handle double-stacked freight containers and train cars carrying large trucks and sport utility vehicles from American and Canadian automotive plants. The new tunnel is expected to cut shipping costs for many commercial customers.

A joint House-Senate conference committee approved Thursday the funding for the Michigan Department of Transportation, which can spend the $10 million after the U.S. and Canadian governments make contributions toward the project and all necessary construction permits are acquired.

“This is the piece we need to have this project move forward,” said Marge Byington, executive director of corporate affairs for the Continental Rail Gateway.

The existing two rail tunnels, which were bored under the Detroit River in the early 1900s, are not tall enough to handle larger rail cars and containers.

The shorter tunnels force some automakers and manufacturers to reroute train shipments of Michigan-made vehicles and products south through Ohio, Pennsylvania and New York in order to reach eastern Canadian ports, said Tim Hoeffner, director of the state Department of Transportation’s Office of Rail.

Other cross-continental trains unload their top-stacked containers in Detroit or Windsor and move the goods across the international border by truck, Hoeffner said.

“That’s the biggest reason for this replacement tunnel is to make the movement of goods through Michigan and Ontario more cost effective,” Hoeffner said.

Seeking support

A state contribution to the public-private project will make it easier to get U.S. and Canadian financial support for a new tunnel, Hoeffner said

“If you’re going to ask people for money and you don’t have any skin in the game, it’s always more genuine if you’re willing to put your money in, too,” Hoeffner said. “It’s really meant to help leverage funding from federal governments.”

Gov. Rick Snyder pushed for the $10 million for the rail tunnel to be added to the Transportation Department’s $3.8 billion budget, spokesman Dave Murray said.

“We’re losing freight to other states,” Murray said. “The governor is supportive of a rail tunnel that can better serve our residents and businesses.”

Byington said securing federal loans and grants for construction of the tunnel may not be as contentious as the continuing battle over construction of a new Detroit River bridge, which needs a $250 million congressional earmark for a new U.S. customs plaza in southwest Detroit.

Canada is financing construction of the $2.1 billion bridge, but is awaiting a commitment by the Obama administration and Congress to the customs plaza because Michigan lawmakers have refused to spend any state tax dollars on a public bridge that competes for lucrative truck traffic with the privately owned Ambassador Bridge.

“There are (federal) resources available other than special earmarks for railroad projects,” Byington said.

The project’s backers can apply for Canadian support through that country’s $8.8 billion Building Canada infrastructure program, she said.

The conference committee added certain stipulations to the $10 million state aid, including requesting a status report from the Department of Transportation on the project by Nov. 10.

“This is great help, and it shows the commitment to infrastructure on behalf of the state of Michigan,” Byington said.

Continental Rail Gateway is the project name for construction of a 1.6-mile tunnel 150 feet west of the existing tunnels, which opened in 1909 and were expanded in 1994. Engineers determined they could not be heightened any more without risking taking in river water.

400K train cars annually

Canadian Pacific Railway operates the underground rail tunnels and jointly owns them with Borealis Infrastructure, an investment arm of the Ontario Municipal Employees Retirement System. The existing tunnels handle up to 25 freight trains each day, with 400,000 train cars passing under the river annually. The Continental Rail Gateway is a joint project of Borealis, Canadian Pacific and the Windsor Port Authority.

Once a new tunnel is constructed, which could take two years, Canadian Pacific and Borealis intend to continue using the existing tunnels for smaller train cars or passenger traffic, Byington said.

U.S. Rep. Gary Peters, D-Bloomfield Township, recently floated the idea of high-speed passenger rail moving from Chicago to Toronto through the existing rail tunnels once a new underground passage is constructed.

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