Brightline (All Aboard Florida) Orlando - Miami FL FEC fka Virgin Rail

I ride Tri-Rail and Metro-Rail on an average of once a month. The trains have good passenger loads, the parking lots have lots of cars parked in them but the rides are still comfortable, generally clean and generally on time. We are very fortunate to have such a system. Brightline will only improve rail travel in these parts big time.
Noel Weaver

While we are discussing the possible sale of the FEC at another topic, a point that directly affects AAF is that if either CSX or NS gets to take over the FEC (someway over the very strong resistance such would generate), operating AAF for the account of either, would be in violation of RPSA 70. This Amtrak enabling Act provides that the member roads, or successors, are barred from operating intercity passenger trains for their own account, as they ceded their franchise to do so by "joining" Amtrak.

Were either to do so, and maintain interest in operating Brightline, could that not simply be accomplished by continuing to run FEC as a subsidiary?

Norfolk Southern and Chessie both have corporate experience with Southern Rwy., Central of Georgia, Seaboard Coast Line, and Georgia RR & Banking Co. about how to bring 1 railroad company into Amtrak while keeping another out, even though there is somewhat common ownership. The lawyers can also question if a run of less than 750 miles is really Intercity, or if a run of any length is some other creature, like Commuter or Excursion.

I don't think there are any concerns at this point about what "kind" of trains Brightline is running. They are clearly common carrier publicly scheduled passenger trains. I don't think there are any statutory issues with Amtrak etc because the ICC no longer exists, passenger trains are no longer regulated as a utility and the structure of RPSA '71 for "entry" into Amtrak has long since expired.

Without anyone really ever realizing it the structure for "deregulated" passenger rail service was long ago put in place and since then reinforced (PRIIA in particular comes to mind).

While the same corporation owns both FEC Railways and All Aboard Florida (Brightline) in separate companies, I'm not aware Fortress is selling both. Brightline (All Aboard Flordia) is apart of FEC "Industries", not FEC "Railways". FEC Industries has never operated passenger trains before......and is not an Amtrak partner. I'm not even sure FEC Railways is either, since none of Amtrak's trains run over its rails.

Mr. O'Keefe, while "I've been away from this stuff" over 35 years, nothing has come to my attention that RPSA70 has been repealed in its entirety, although it has been amended by subsequent legislation.

The Act clearly states that the Members, i.e. the roads that signed up, or their successors, have surrendered their franchise to operate intercity passenger trains for their own account. Pragmaticly, that provision was meaningless, as all the roads wanted nothing other than "OUT". But the provision was there "just in case" some road foresaw a future opportunity to reap an entrepreneurial reward from intercity passenger trains.

Since the FEC was never a Member, because they were out during 1969, no provisions of the Act apply to them. Accordingly, they are free to sponsor an intercity train. But, should they merge with a Member road, then I would think the franchise provisions of the Act would be applicable.

Would Amtrak want to enforce? One hand says no because government agencies are not entrepreneurs - and Congress, as well as Amtrak management, wants it that way. The other hand says that Amtrak is a bureaucracy, and if there is anything out there that ruffles those feathers, is any party encroaching on that turf. Indicative of that is how many obstructions Amtrak threw in the way of Indiana and Iowa Pacific contracting with one another to operate the Hoosier State.

Best hope for AAF, if the FEC is to be sold, the State should be the buyer. But I would hope the State has enough sense to contract out the road's operations to a concern titled "Florida East Coast Railway Operating Company" comprised of the existing managers and employees. For no question whatever, they run a darned efficient outfit.

Mr. Norman,

It has in fact been amended but not by PRIIA 2008. Rather "ARAA '97" (Amtrak Reform and Accountability Act of 1997).

The relevant section of the USC is 49 U.S. Code § 24701.

Here is the amendment from the Cornell Database for comparison:

Amendments
1997—Pub. L. 105–134 substituted section catchline for former catchline which read “Operation of basic system” and amended text generally. Prior to amendment, text read as follows:

“(a) By Amtrak.—Amtrak shall provide intercity rail passenger transportation within the basic system unless the transportation is provided by—

“(1) a rail carrier with which Amtrak did not make a contract under section 401(a) of the Rail Passenger Service Act; or

“(2) a regional transportation authority under contract with Amtrak.

“(b) By Others With Consent of Amtrak.—Except as provided in section 24306 of this title, a person may provide intercity rail passenger transportation over a route over which Amtrak provides scheduled intercity rail passenger transportation under a contract under section 401(a) of the Act only with the consent of Amtrak.”

In short the exclusions on operating intercity passenger rail service provided for in RPSA '70 have been repealed since 1997.

It now reads as follows:

Amtrak shall operate a national rail passenger transportation system which ties together existing and emergent regional rail passenger service and other intermodal passenger service.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 923; Pub. L. 105–134, title I, § 101(a)(1), Dec. 2, 1997, 111 Stat. 2572.)

Mr. O'Keefe, let's call it a draw.

OK, let's say as you contend that a Member road is free to reenter the intercity passenger train business - even if it were in competition with Amtrak. Is a potential Class I buyer going to be bothered with having their freight operations interfered with a passenger service that might, or might not, make a $$$? I don't think so.

Now if a public agency chooses to contract with the acquirer to operate the intercity service, then that would be, as you have cited, "scooch" under both the Act as enacted, and by the Amendments noted under ARAA97.

Why Fortress is seeking to sell a perfectly profitable road at this time suggests they know something the public does not. To what extent "irrational exuberance" over AAF is a factor, who knows. As far as same over the ostensible "flood" of Neo-PANAMAX traffic, that is to this layman, "too early to tell" if that will meet high flying expectations of the East Coast ports.

It is worth noting that private equity firms typically seek to offload assets for maximum value. Therefore this proposed sale comes as "no surprise" to me. Also worth noting that many private funds, in particular hedge funds have had a bad year. I think internals at Fortress probably play a larger part in the equation at this point than any concerns (whatever they might be) about "Brightline".

What is more interesting to me is whether or not Fortress would consider an Initial Public Offerring and listing the equities on the New York Stock Exchange. They might get considerably more for their ownership by taking the company public, especially with the extraordinary new value they are creating with Brightline. Turn that one over in your mind for a few minutes ... a publicly traded railroad with regularly scheduled passenger operations "run for their own account".

I'll sure agree there, Mr. O'Keefe; a publicly traded railroad operating a passenger service for their own account.

Even if to date I've been wrong a lot about AAF (I thought it would be over and done by now), one thing I have en correct upon, is that the road was going up for sale. Who knows if AAF was a means to "fatten up the steer". If the State was a target, then I'd say yes. But either to a Class I or, as you put on the table, an IPO, I think AAF would be an impediment.

Much more of concern to me (and surely to Mr. Cowford should he choose to surface) is the possible "irrational exuberance" over Neo-PANAMAX. BUT let us consider that the maritime shipping industry is in a Dark Ages. Its overcapacity will shake out, but it is an industry for which there is no alternative other than for the Nation's of the World to become isolationist - and an awful lot of the troubles it has had over six thousand years of recorded history stem from just that.

Here's another thought about ownership worth considering ...

Had FEC been publicly traded at the time when they announced Brightline their stock price almost surely would have crashed. Wall Street would have been completely mystified and only could have imagined a tidal wave of red ink in their future. Because the company is privately owned Fortress has been able to make a longer term investment that is transforming FEC from a classic late 20th century North American freight only railroad into the only privately owned and operated integrated rail transportation company in the U.S. That's a pretty big turn of events and if successful has major implications for other railroads seeking to re-leverage existing assets that are currently dormant.

The most obvious example beyond FEC? I think its KCS and the Meridien Speedway with some kind of inter-line end point combination in Dallas and Atlanta. Most of the other high volume, high(er) speed corridors that come to mind are basically Amtrak territory of some form or another.

KCS is who I thought would be interested in picking up FEC, not GWI.

Here is a good video of train 121 going by the new passenger station in West Palm, enjoy.

https://www.youtube.com/watch?v=QWPrDRQ ... e=youtu.be" onclick="window.open(this.href);return false;

Noel Weaver

Here is a video of the construction around the new passenger station in West Palm Beach. Lots of progress all over the place, I went to Miami yesterday and there is huge progress there as well.

https://www.youtube.com/watch?v=k7_WqQAmc_0" onclick="window.open(this.href);return false;

Noel Weaver