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Deal reached for return of passenger rail service to Gulf Coast

Amtrak ended service between New Orleans and Mobile after Hurricane Katrina, but with a recent infusion of cash from the bipartisan infrastructure bill, it hopes to reintroduce service there and to more than 150 communities nationwide.

MOBILE, Ala. (CN) — Passenger rail service is set to return to the Gulf Coast after a protected mediation process led to a settlement agreement allowing trains to again run between New Orleans and Mobile, Alabama.

A joint statement Tuesday morning from Amtrak, CSX, Norfolk Southern and the Alabama State Port Authority stated an agreement “had been reached to support passenger and freight service in the Gulf Coast corridor.”

The route of Amtrak’s Sunset Limited was once one of the longest in the nation — carrying passengers between Los Angeles and Orlando two or three times per week — until portions of the track were severed by Hurricane Katrina in 2005. Today the route terminates in New Orleans, but in recent years, as Amtrak sought to restore portions of the service to points east, it has faced opposition from the freight carriers that own or operate the rails along with industrial interests concerned with disruptions to the supply chain.

Specifically, CSX and Norfolk Southern have suggested passenger trains will cause delays with existing freight trains. During negotiations, they demanded as much as $440 million be poured into their network to accommodate potential new trains. Amtrak, on the other hand, believes the proposal will cost in the neighborhood of $66 million.  

Amtrak also believes freight carriers are exaggerating the implications of passenger service on rail traffic and contrary to their representations, it has provided evidence tracks along the Gulf Coast are underutilized.

In March 2021, Amtrak petitioned the Surface Transportation Board for a determination in the case. The board held hearings on the matter earlier this year, later ordering the parties to mediate the case. The mediation has since been awarded three separate extensions, but in the final extension, the STB indicated it was losing patience.

On Oct. 28, the board set an “accelerated schedule” for the conclusion of the case, ordering parties to “make substantial progress” before Nov. 21. 

According to a spokesman for Amtrak, on Tuesday the parties filed a motion informing the STB “that a settlement agreement has been reached and asking that the case be held in abeyance while the parties execute the various conditions of that settlement agreement.”

Due to the confidential nature of the settlement agreement, the parties were unable to provide immediate comment on its terms. 

Amtrak is interested in running two daily trains between Mobile and New Orleans. Among the more contentious issues is capacity modeling the parties have utilized to argue whether the passenger trains will “unreasonably impair” freight carriers’ ability to provide timely service. According to its own modeling, CSX claims the two Amtrak trains will result in a 286% increase in delay, an 18.3% decrease in speed and a 169.7% change in variability of work schedules. 

Managed properly, Amtrak said the effect of two trains will be negligible. In April, it trolled the opposing parties by hosting a livestream video of hours of empty track in Bay St. Louis, Mississippi, which is near the center of the proposed route, and where local officials have already committed money for improvements to its passenger rail platform. Other stops include Biloxi, Gulfport and Pascagoula.

Support for the proposal from local lawmakers is scattered. Last year, Alabama’s congressional delegation, including six Republicans and a Democrat, signed a letter of opposition to Amtrak’s proposal until a feasibility study was completed. In Mobile, despite enthusiasm for the service, political concerns have been focused on the effect it may have on the operations of the Alabama State Port Authority, which indirectly employs more than 100,000 people and touts an annual economic impact of $25 billion. 

“The Port’s footprint has greatly increased since passenger rail service last operated in Mobile pre-Hurricane Katrina,” the letter read. “It is critical to ensure the renewal of Amtrak service does not hinder the Port of Mobile’s existing freight rail operations.” 

A spokesman for U.S. Representative Jerry Carl, R-Ala., confirmed Monday the study was never completed. Alabama’s Republican governor and lieutenant governor have also opposed the plan, along with a host of industrial organizations, freight operators and chambers of commerce nationwide.

Alternatively, U.S. Senator Roger Wicker, R-Miss., is one of the project’s biggest cheerleaders. In September, he told the Senate Commerce Committee the project was his “top priority,” noting the bipartisan infrastructure bill provided $22 billion in advanced appropriations to Amtrak over next four years, with an opportunity to apply for additional grants. 

As part of its Amtrak Connects US 15-year-plan, Amtrak plans to provide new services along corridors in light blue, while enhancing services to corridors in yellow. (Courthouse News via Amtrak)

“The law favors this petition, but protracted litigation benefits no one,” Wicker said. “It is a proven fact that freight and passenger rail service can coexist and thrive when the operators work together. This has been the statutory model for 51 years. Additionally, when considering the historic levels of funding available to both Amtrak and the freight carriers, we are in a position to restart this service very soon.”

The proposal has also received letters of support from the U.S. Department of Transportation and other transportation organizations. Sean Jeans-Gail, vice president of government affairs and policy at the Rail Passengers Association, said if the route is reopened, cities targeted by Amtrak should expect a boon in tourism.

“Obviously you have this very robust tourism market in Gulf Coast communities that would very much benefit from people who come to New Orleans,” Jeans-Gail said in a phone interview last week. “And some folks don’t want to rent a car and drive to these beautiful communities, where there’s no other way to get to them.” 

Jeans-Gail said the resolution of the case may set the tone for passenger rail expansion nationwide as money from the infrastructure bill is allocated. Amtrak has a 15-year plan to introduce new passenger service to as many as 160 new communities around the country. 

“There is a question about how narrowly STB will decide the case,” he said. “What we would hope is that you don't have to go through a similar five-year arbitration process every time you want to introduce a new passenger train on an existing Class 1 corridor. We would hope for [a decision] more broadly written, but one still grounded in the facts and within the existing statutory framework.” 

During public hearings in the case in March, Amtrak CEO Stephen Gardner told the board the company’s plan to expand will help ease congested highways and skyways while reducing greenhouse gas emissions. He said the Southeast has been historically underserved by passenger rail. 

“Returning service to the Gulf Coast, which was suspended in 2005 following Hurricane Katrina, is both good transportation policy and a matter of regional equity,” Gardner testified, noting the route carried twice as many freight trains before Hurricane Katrina as it does today. “The [board’s] decision in this case will send an important message to the railroad industry.”

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