Chicago has taken the first step in what could become a big investment opportunity for private investors interested in the city’s infrastructure: the construction of a bullet train connecting O’Hare airport with Chicago’s downtown business district.
The city has launched a website for the project, www.ordexpressrail.com, and begun soliciting “expressions of interest and information” from private developers, a first step aimed at aiding planning efforts for the Chicago O’Hare Airport Express Rail Service.
“It’s a one-step-at-a-time effort,” said Paul Karas, the city’s lead on the project, who will be taking responses to the request for interest and information until 5pm Chicago time on 26 July.
The hope, he said, is to use the information gathered through the request to figure out important aspects of the project, such as its scope, financing and answer questions on more difficult subjects such as subsidies.
Chicago to O'Hare: could
“This time, the city is asking for private funding, private investment, private operation and private-managed construction and design. So it’s different, it’s very much [a] private-public, public-private partnership,” Karas said.
Unlike the transit authority’s attempt at the project, “this effort is being realistic in knowing that public funding both for capital investment and operation is the least likely option”, Karas added.
There is already some momentum behind the effort. Longtime Mayor Richard M. Daley has championed building the express train. In August 2010, he formed a “blue ribbon” committee of business, transportation and labour leaders to study the feasibility of the train service. A few weeks later, he traveled abroad to drum-up interest from foreign investors.
“We have investors from China, Japan, the Middle East looking at it,” Daley told Infrastructure Investor during a September interview. He also said the train would “revolutionise” downtown Chicago’s commercial market by making it possible to get from the airport to downtown in 20 minutes, as opposed to the hour-long trip on the transit authority’s existing blue line service to O’Hare.
But the project – still in its infant stages – also faces many obstacles and uncertainties. The city launched the project website and information request during a rare time of transition in City Hall: Daley, a six-term mayor who’s been in office since 1989, will serve his last day in office in May, when Democratic Mayor-Elect Rahm Emanuel takes over.
Emanuel has not been as outspoken in supporting the project as Daley. A spokesperson did not return a call for comment, but the Chicago Tribune has previously reported that although Emanuel has not spoken publicly on the issue, his staff said he supports the project.
The project is also likely to be expensive, meaning that attracting private investment may require subsidy payments to make it bankable for private investors. Karas, the project lead, said Chicago is “prepared to do something that avoids those subsidies” and hopes the request for information and interest will help it determine a “more precise and quantitative” answer to the question of subsidies.
Asked about cost estimates, Karas said the city is not giving interested parties “any fixed bookends either on the low side or the high side” of the project’s cost.
The city has not yet hired any financial advisors for the project, Karas said. However, engineering consultancy AECOM, which works with the city’s department of aviation, is helping with the launch of the request for information and interest, Karas added.