Critics say Michigan’s state investment in idle railcars now lost

February 29, 2016

By Paul Egan, Detroit Free Press

LANSING — The state transportation department says it’s struck a deal with a railway company that allows it to stop making costly lease payments for passenger railcars it is not using, while still assuring the cars will be available if planned commuter services in southeastern Michigan ever gets going.Website Insert New Passenger Train Service copy

But critics say the Michigan Department of Transportation’s move has made a bad deal worse by giving up equity in the double-decker railcars they have spent millions of dollars improving.

The state already has invested more than $10 million in the 1950s and ’60s-era railcars that Great Lakes Central Railroad purchased for about $114,000 each in 2004. But under its latest agreement with the railroad, MDOT won’t be entitled to any compensation in the event one or more of the cars is sold, unless each sells for a purchase price above $900,000 — a price some railway experts say is unlikely.

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