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MDOT re-negotiating lease on un-used rail cars

Jun 1, 2015

Credit morgueFile

The Michigan Department of Transportation is close to re-negotiating a deal on leased rail cars that are sitting un-used in a state lot.

The state’s already paid $11 million to the Great Lakes Central Railroad on the leases.  

Tim Hoeffner is the director of the Office of Rail in the Michigan Department of Transportation.

He says the arrangement would allow the state to suspend its lease payments for up to five years “and the Great Lakes Central Railroad would try to lease the equipment, sub-lease the equipment and try to generate revenue from these other lease opportunities.” 

Hoeffner says the state could resume the leases once the commuter rails lines start operating.

“It would protect the investment the state has made in the 23 rail cars for approximately up to five years,” he says.

The lines would connect Ann Arbor to Detroit and to Howell. But the lines aren’t expected to start operating for two years or more.

The leases on un-used rail cars drew unwelcome attention when they were first revealed to the public by The Detroit Free Press in February. That was in the midst of the ballot campaign asking voters to approve an increase in the state sales tax to pay for roads.