Railway company to build passenger service from Miami to Orlando

* Would be first private, unsubsidized service between cities

* Route is heavily traveled by tourists, convention-goers

MIAMI, Aug 8 (Reuters) - A Miami real estate and transportation company announced Wednesday that it plans to go ahead with a $1 billion project to build a privately run passenger train service between Miami and Orlando to begin operations by the end of 2014.

Florida East Coast Industries said its “All Aboard Florida” project is financially viable without any need for federal and state grants or subsidies.

“After completing our due diligence we have decided to go through with it,” said Husein Cumber, vice president of corporate development at Florida East Coast Railway, which operates the company’s existing freight line.

Construction would begin in early 2013, Cumber said, and when completed the new service would be the only privately run, non-subsidized passenger rail link between two major cities in the United States. A similar private scheme has been proposed in Texas to link Houston and Dallas.

Amtrak, the government-owned national rail corporation, currently offers a twice daily service between Miami and Orlando, taking five to seven hours.

The announcement comes after Florida Governor Rick Scott rejected federal funding in 2011 for a high-speed rail service linking Tampa, Orlando and Miami, saying the state could not afford it.

The new service is designed for tourists and business travelers and would link two of Florida’s major urban centers, Cumber told members of the Beacon Council, a public-private partnership to promote business development in Miami-Dade County.

The $1 billion cost includes a set of 10 diesel-powered trains with a 400-seat capacity offering an hourly service with First-class and Business-class seating, gourmet dining and Wi-Fi, as well as new tracks and stations in downtown Miami, Fort Lauderdale, West Palm Beach and the Orlando airport.

The trains would make the journey in 3 hours 3 minutes traveling at speeds of up to 110 mph (177 kph) at a “cost competitive” price compared to the cheapest round-trip airfare of $140-160 or the roughly $120 cost of car travel, Cumber said.


All Aboard Florida would be financed through a combination of debt and equity and would create 6,000 rail construction jobs and 1,000 permanent positions once in operation, he said.

FECI is owned by the Fortress Investment Group and currently operates a 351-mile (565-km) single-track freight rail system along Florida’s east coast with a fleet of 85 diesel electronic locomotives and 4,800 freight cars. It generated operating revenues of about $208 million last year.

FECI plans to double-track its existing line along a 100-foot (30-meter) wide corridor that runs most of the 230-mile route between Miami and Orlando, adding an extension for a section from the coast inland to Orlando.

The company also owns 9 acres (3.6 hectares) in the heart of downtown Miami, the site of the former Henry Flagler railroad station, named after the rail pioneer who built Florida’s first east-coast railroad system 100 years ago linking Jacksonville to Key West.

“We are now hoping to bring passengers back in a second wave of economic development,” said Cumber.

The company is also examining the possibility of expansion to Tampa on Florida’s west coast and Jacksonville in the northeast of the state.

Cumber said studies show about 50 million people travel between Miami and Orlando every year, 95 percent making the journey by car in around four to five hours.

Orlando is the most visited city in the nation with 52 million visitors a year, said Cumber. Besides being home to Walt Disney World and Universal Studios, as well as the University of Central Florida, the nation’s second largest university, the city is a major convention destination.

Miami-Dade County has 2.5 million residents, making it the seventh most populous county in the nation, as well as a popular tourist destination and the cruise ship capital of the world.

“It sounds very promising. You have an incredible amount of population density on the east coast, and that’s important to any kind of high speed rail project,” said Petra Todorovich, a transportation specialist with Regional Plan Association, a New York-based think tank.

Cumber said the new service is being designed to meet the expectations of the traveling public and would also reduce traffic congestion and accidents. Rail travel, he said, would be “faster and safer.” (Reporting By David Adams; editing by Todd Eastham)