Feb. 4 2015 11:40 AM

Councilmember David Alvarez calls for transparency on railroad restoration

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Photo by Joshua Emerson Smith
How much will it cost to get the Desert Line up and running? And is the private company that’s holding the government contract to complete it up to the task?

Those questions were put to the Metropolitan Transit Authority last week by San Diego City Councilmember David Alvarez. In a letter to MTS CEO Paul Jablonski, Alvarez asked for an update on efforts to rehabilitate the 70-mile section of railroad track in southeastern San Diego County.

“I continue to have concerns regarding the lack of transparency and information which has not been provided regarding costs involved and a financing plan for this project,” Alvarez told CityBeat in an email.

Specifically, Alvarez asked for an update on a feasibility study of the Desert Line, as well as a financial audit of Pacific Imperial Railroad (PIR), the contracted company. MTS officials have yet to respond.

However, answers to Alvarez’s questions likely exist. In order to begin freight operations, 57 bridges and 17 tunnels would need to be inspected and potentially repaired, according to MTS records. Sections of the 100-year-old tracks would also need to be upgraded.

Since entering into a 99-year contract with MTS in 2012, PIR submitted a business plan, which both entities have refused to make public. In 2007, MTS did a study of the rail line, which it also declined to release. But, in a legal declaration from 2012, MTS general counsel Karen Landers said the study found “costs to bring the Desert Line into a state of good repair were informally estimated at more than $100 million.”

Seen as a way to transport cars and other goods produced in factories in Mexico to markets in eastern states, the rail line drew attention from elected officials last year when progress stalled and controversy emerged. After a short stint with the company, former CEO Ernie Dahlman and former President David Rohal paid for an independent audit of PIR and subsequently left in early 2014, claiming the majority stockholders had embezzled funds and left the company essentially broke.

“We didn’t know [at the time] that it only had about $10,000 in cash left after making the December 2013 lease payment to MTS,” Rohal told CityBeat. “Ernie’s friends and family and I invested less than $5 million in all.”

A 30-year railroad industry veteran, Rohal said the line could be repaired within a year with the proper resources. However, he said, PIR has done little if any work over the last two years.

“The [Pacific Southwest Railway] Museum has maintained a few miles for their purposes, but that’s all,” he said.

Write to joshuas@sdcitybeat.com or follow him on twitter at @jemersmith.