TRANSIT: Michigan DOT cuts off payments of unused cars

Aug. 31, 2015

Transportation department already has big dog in Detroit rail development hunt

According to a statement made by Michigan Department of Transportation (MIDOT) officials earlier this week, the agency has reached a tentative agreement to cease its lease payments in rail cars that are not presently in service.

The details of the arrangement with the Great Lakes Central Railroad, which owns the 23 rail cars, are ongoing. The lease payments, which stood at $3,000 per day, would have ended Sept. 30 of this year. According to MIDOT, the state will retain a five-year option to reclaim the cars for use in a proposed commuter rail service in southeast Michigan, which has yet to see active development, presently sitting in the planning stages

Thus far, the state has spent $11.4 million since 2010 to lease and refurbish the cars. The 2010 deal between the state and the rail car owners became a contentious issue for lawmakers during a failed May 5 ballot proposal to raise taxes and add $1.2 billion to the annual road repair budget.

MIDOT is looking to shore up its expenditures, notably in light of its investment in the M1-RAIL project presently underway in Detroit, for which the state is footing the bill to reinvent and develop the corridors along the 3.3.-mile rail line.

For more on the M1-RAIL project, read our recent feature and watch video of a recent site visit.