While plans rapidly advance to build a $2 billion bridge over the Detroit River, backers of a $400 million project to build a modern rail tunnel under the waterway continue to seek funding and government approvals.
The Continental Rail Gateway tunnel project has been in the planning and financing stages since it was formally launched in 2001, and is the result of another tunnel project that got its start 30 years ago this week.
From the archives: Detroit could be major U.S. rail gateway (June 3, 1985)
According to the June 3, 1985, edition of Crain’s Detroit Business, two rail companies bought the tracks that connected Detroit and Windsor via a twin-tube tunnel that opened in 1910, and they were seeking bidders on a study for possible enlargement of the tubes. The reason? So they could handle larger stacked rail cars used for the automotive industry.
At the time, taller-stacked rail cars (and those of competing rail companies) were forced to use a ferry to cross the Detroit River, adding delays and costs to moving goods.
What is known officially as the Michigan Central Railway Tunnel was built for $8.5 million by the Detroit River Tunnel Co. for Canada Southern Railway and opened in October 1910 — long before the auto companies began building millions of large cars and trucks in metro Detroit and Ontario.
The need to improve efficiency fueled Montreal-based Canadian National Railways Ltd.’s 1985 purchase of the 8,373-foot-long tunnel from Consolidated Rail Corp. of Philadelphia, better known as Conrail.
Canadian National, then owned by the Canadian government and privately owned, Calgary, Alberta-based Canadian Pacific Railway Ltd. jointly bought the old Canadian Southern Railway line between Detroit and Niagara Falls for $25.2 million in a deal that included the tunnel, which has its Detroit entrance just southwest of the post office at West Fourth and Eighth streets.
CN solely took over tunnel operations on May 1, 1985, from the Conrail-owned Detroit River Tunnel Co. It withdrew from the project a year later to focus on a tunnel project between Port Huron and Sarnia (which opened in 1994).
An initial estimate, prior to the study, was that it would cost $7 million to enlarge the tunnel. It was to be part of a $41 million plan by Canadian National and CP Rail to improve the entire rail line.
The tunnel had been built by sinking 80-foot-long steel tube sections into a 13-foot-deep trench in the riverbed. They were then covered with concrete.
The interior of the tubes were lined with concrete.
After the 1985 study was done, it was determined only the northern of the two tubes could safely be expanded. Expansion
The enlargement, which began in August 1992, was done by scraping out some of the concrete roof and sides of the tunnel. The electrical and drainage systems were updated, and a new floor and new track were installed.
The work ended up costing $27 million by the time the tunnel reopened in 1994. It allowed trilevel auto carriers, some “highcube” boxcars, and trailers on flatcars to pass through the tube.
John Taylor, chairman of the supply chain management department at Wayne State University’s School of Business Administration, said the expansion allowed most train cars to pass through the tunnel.
“That was a temporary fix, but it was a critical fix because it allowed us to eliminate railroad car ferries. It took care of most traffic,” he said. “That saved the auto companies a good share of money. They were paying a fortune.”
While the costly bottleneck of ferrying cars was eliminated, the expanded tunnel still was unable to accommodate the largest stacked rail cars, especially the 9-foot by 6-inch “high-cube” shipping containers that are stacked.
Currently, only the $200 million freight and passenger train tunnel built in 1994 underneath the St. Clair River between Port Huron and Sarnia, Ontario, by Canadian National can handle the largest rail freight trains. CN maintains that tunnel almost exclusively for its own trains.
A desire for a tunnel in Detroit that can handle every size rail car gave birth in 2001 to what has come to be called the Continental Gateway Project.
Participants in the tunnel project are Toronto-based Borealis Infrastructure Management Inc., Canadian Pacific and the Windsor Port Authority. They’re funding $200 million of the project’s $400 estimated capital cost.
Canadian National had been part of the project but sold its share to Borealis in February 2000.
Borealis, investment arm of the Ontario Municipal Employees Retirement System, is financing most of the tunnel work and owns the land necessary for the project near the old tunnel. Borealis increased its stake in the tunnel and the project from 50 percent to 83.5 percent in an $87.7 million deal in 2009.
The state of Michigan last year committed $10 million to the tunnel project contingent on it getting all of its other funding and approvals.
Marge Byington Potter, the project’s executive director of corporate affairs, said the effort is in talks with the U.S. Federal Railroad Administration about a $190 million Railroad Rehabilitation & Improvement Financing loan to round out the capital costs.
But for that to happen, Canadian federal environmental approval and all other permits must be in hand. That process is ongoing, Byington Potter said.
That Canadian environmental approval could happen by the end of summer, she added. “We’re still working on it,” she said. “Everything has to be in order” to get the federal rail loan.
At this point, the project isn’t seeking any other Canadian and U.S. grants to offset the borrowing, she said. What's next
The funding isn’t the final hurdle: Once all the capital is in place, the project must get approval to proceed under the Canadian International Bridges and Tunnels Act and it must get a U.S. Presidential Permit from the State Department.
Once all the approvals and funding are in place, construction is estimated to take two years, Byington Potter said.
That means if all approvals and funding happened by the end of 2015, the earliest the tunnel would open is some time in 2018.
Byington Potter expects to have a new project timeline at the start of 2016.
“Slowly but surely, it all moves very slowly,” she said.
The new tunnel will be about 50 feet below the riverbed, which is 30 feet deeper than the current tunnel. It also will be several hundred feet longer, and will be dug by specialized boring machinery rather than constructed as tubes sunk into the river.
Design and engineering work on the new tunnel has been done by Omaha, Neb.-based HDR Inc.; Toronto-based MMM Group; and Iselin, N.J.-based Hatch Mott Macdonald Group Inc.
The new tunnel will be open to all rail companies, Byington Potter said.
The original tunnel plan called for the current tubes to be converted into a commercial truck link, but that was scrapped after Canada and Michigan opted to build a new bridge about a mile from the Ambassador Bridge — a span scheduled to open by 2020 and be called the Gordie Howe International Bridge.
Before taking on its current name, the tunnel effort was called the Detroit River Tunnel Partnership and the tube itself was nicknamed the “Jobs Tunnel” because of the thousands of jobs backers predict it will create or preserve.
Tunnel backers also note that the new tube would be near the proposed $445 million Detroit Intermodal Freight Terminal being jointly built by CSX, Norfolk Southern, Canadian Pacific and Canadian National as a consolidated terminal near Wyoming Avenue and I-94 that is designed to accommodate existing and future freight demands.
Wayne State’s Taylor is skeptical about the tunnel project.
“It’s very difficult financially because there’s so little traffic that doesn’t fit now,” he said. “It’s just hard to justify the financing. Until we get to the point most of the container traffic does not fit, it’s just hard to justify a new railroad tunnel. I think it’s up in the air. The business case is very difficult.”
The 1910 tunnel handles about 400,000 rail cars annually between Detroit and Canada. The volume with the new tunnel is expected to be about the same but will be done more efficiently with the use of doublestacked rail cars, Byington Potter said.
The new tube will recoup its costs via tolls that rail companies negotiate, she said.
Such tolls typically based on each kind of rail car, such as tankers and box cars. She didn’t have toll estimates.