GLBT Says it Can Finance Chicago Bypass Route

Great Lake Basin Transportation has told the U.S. Surface Transportation Board that it is confident in its ability to finance a proposed 261-mile Chicago rail freight bypass line.

GLBT was responding to critics of the proposed $2.8 billion project who have questioned the company’s ability to obtain financing.

In filings with the STB, GLBT contended that Congress is on record as favoring competitive rail ventures such as the proposed rail line between Northwest Indiana and Southern Wisconsin through the Staggers Rail Act of 1980.

GLBT Vice Chairman James Wilson told the STB that the investment community “has considerable interest in financing this project once all required regulatory approvals are received.”

The company, though, conceded that at this time it is “unable to project exactly what form that financing will take” until STB approves the project.

Citing the 1998 case of the Dakota, Minnesota & Eastern Railroad, GLBT said, “it is not necessary for rail line construction applicants to come to the [STB] with every penny of the cost of their proposed projects in hand.”

DM&E received approval to built a 280-mile new railroad to haul coal from the Powder River Basin. However, it never built the line for which it won regulatory approval.

Critics of the Chicago bypass have cited filings that GLBT submitted to the STB showing that in 2016 the company finished the year with no net income and a net worth of just $151.

Most of GLBT’s revenue was spent on legal feels and consultant studies.

Wilson said in a letter to the STB that potential investors have said that rules prevent investment in the preliminary state of the project because Great Lakes cannot assure them that STB will approve the project.

He said GLBT has met with “hundreds” of qualified investors, from individuals to banks and pension funds. GLBT has also spoken with potential investors in the Middle East and Australia.

GLBT contends that its railroad would become profitable in the third year after completion and to have earnings before interest and taxes to fixed charges coverage of approximately 4.5 to 1 in its fifth year of operation.

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