A railway set to launch next year will be the first privately run inter-city service in the United States since 1971. Florida politicians have been trying since the 1960s to build a public railway, but when those efforts finally died in 2011 New York private equity firm Fortress Investment Group LLC (NYSE:FIG) stepped in.
“These guys have been sitting on the sidelines waiting for the government project to be nixed,” Wall Street Journal columnist Holman Jenkins said in this video on Thursday. "No one has ever come up with a project that will pay for itself,” he added.
The train project has been in the works since the 1960s, but whatever legislation was passed lacked enough funding or direction. Finally, in February 2011, Florida Gov. Rick Scott rejected federal funds to construct the long-awaited high-speed railway.
“The trust is that the project would be far too costly to taxpayers, and I believe the risk far outweighs the benefits,” he said, according to Reuters.
Soon after, Florida East Coast Industries, which was purchased by Fortress years earlier for $2.5 billion, proposed the All Aboard Florida project, with a five-year plan to make a railway profitable. The railway is to connect Miami, Fort Lauderdale, West Palm Beach and Orlando International Airport, with possible additional stops in other cities such as Tampa and Jacksonville to be added in the future.
“The Central Florida community has advocated for inter-city passenger rail for more than two decades, and this weeks’ agreements will allow All Aboard Florida to meet the demand of Floridians who want more transportation choices,” Don Robinson, president and chief operating officer of All Aboard Florida, told Reuters in October.
If plans for the 2015 launch go through, it will be the only U.S. inter-city rail service not dependent on the government and the first private run inter-city service in decades. Amtrak took over national passenger train operations in 1971.
Ideally, it will add to Florida’s billion-dollar tourism industry, while making money, of course. Last year about 72 million people visited the Sunshine State.
The idea should appeal especially to European tourists, who are used to efficient, affordable train passages among their cities.
“All Aboard Florida will change the tourism landscape and how Florida residents and visitors travel throughout the state’s major tourism destinations by providing an unmatched hospitality-driven experience,” Robinson said Thursday at a conference in Palm Beach.