Passenger rail looks to raise capital ahead of 2020 opening

Passenger rail looks to raise capital ahead of 2020 opening

Boston Surface Railroad Company Founder Vincent Bono and Vice President of Business Development Chip Selley say a new technology pilot will shave $8 million off the cost of opening their planned Providence-Woonsocket-Worcester route. The company hopes to operate its first test trains by Sept. 1, 2020. (Breeze photo by Lauren Clem)

WOONSOCKET – Plans for an intercity passenger rail between Providence, Woonsocket and Worcester, Mass., are moving full steam ahead, with a test train due to hit the track between Providence and Woonsocket by Sept. 1, 2020, according to Boston Surface Railroad Company founder Vincent Bono.

As the company moves into its third year since receiving federal approval in 2016, Bono said the focus has turned to raising capital to get the first trains on the track. Much of that funding will go toward improving the track that’s currently owned by the Genesee & Wyoming Company, which purchased the Providence and Worcester Railroad Co. in 2016.

“Right now, we’re raising between $5 million and $10 million to do track work to not just run our first train, but keep running for three years as we ramp up revenue,” said Bono.

The company has already spent about $2 million on engineering, software, legal work and federal approvals, not to mention the two diesel electric locomotives currently being outfitted at a yard in Connecticut. By the time the owners run their first route, they plan to purchase two additional locomotives and a fleet of refurbished Caltrain cars formerly used in California.

While the price point might seem high from an outside perspective, company representatives pointed out the numbers fall far below those in the public sector. According to Bono, a 2010 feasibility study found a proposed commuter rail in the area would cost $7 million in engineering costs alone. By comparison, the BSRC plans to spend just $4 million before their first train runs in 2020.

“We need just under 700 passengers a day to be profitable,” said Bono. “Our goal is 2,000 passengers a day, but at 700, we can break even.”

Chip Selley, the company’s vice president of business development, said the lower costs are due in part to the difference between private and public development. Most of the country’s passenger rails are operated by federal or state entities, with private rail a relatively new addition to the U.S. transportation economy. In 2018, Brightline, a company now operating as Virgin Trains USA, opened the country’s first privately operated high-speed intercity passenger rail between West Palm Beach and Miami, with a planned extension to Orlando. When it opens in 2020, the BSRC line will be only the second privately operated intercity passenger rail in the country.

Aside from their private ownership, the two rail lines have little in common. Funding for the Brightline runs in the hundreds of millions of dollars, and tickets can cost up to $41 for a single ride. The BSRC, on the other hand, hopes to attract penny-pinching commuters tired of sitting in traffic on Route 146 with one-way ticket prices around $8. Bono said they’re able to keep costs down by purchasing used equipment for rehab instead of ordering new.

“We’ll be the Camry of trains,” he said.

In true startup fashion, the company has also looked to cut costs by developing its own technology where affordable options are lacking. Last week, the owners announced a pilot study with Siemens Mobility, the company that develops the positive train control (PTC) technology the BSRC plans to install on all its trains. According to Bono, a typical PTC system costs about $7 million per mile to install on a commuter rail. Using software he developed for use on Siemens Mobility systems, he estimates the BSRC can bring that cost down to about $70,000 per mile, an overall cost savings of about $8 million.

“It allows us to install PTC for about a tenth of the cost of what other railroads are installing it,” he said. “And when you’re a startup without billions of dollars, these things are important.”

While PTC is not yet required on all railroads under federal law, Bono anticipates the technology, which is designed to stop train accidents before they occur, will be standard within a few years.

Despite heavy publicity efforts in Rhode Island and an office location at Woonsocket’s Depot Square, Selley said much of the investor interest at the moment is coming from Massachusetts and New Hampshire, where the company hopes to introduce an extension to Lowell, Concord and Nashua after launching the Providence-Worcester line. That’s because vehicle traffic, according to Selley and Bono, has already reached a critical point in cities further north, something they anticipate happening in Providence in the future. When that happens, they’re banking on commuters turning to the next big thing in rail travel, which, if everything goes according to schedule, should be ready in the next 16 months.

“I think it’s a really good time to be in trains right now,” said Selley.

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It appears that Boston Surface Railroad is facing eviction.6th Division District Court
Case Summary
Case No. 6CA-2019-04685
State of Rhode Island Department of Transportation v. Boston Surface Railroad Company, Inc.,Vincent Bono
Location:
6th Division District Court
Filed on:
04/10/2019