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The plan for reconstructing the now-defunct binational railroad has been submitted and approved, revealed San Diego County transit authority officials during their September 18 board meeting. What officials didn't say, at least not until their October 30 meeting, is that the plan is full of holes and unanswered questions.

According to Metropolitan Transit System documents, Pacific Imperial Railroad, the company currently leasing the line, has failed to pay for an engineering company to assess the integrity of all bridges, tunnels, and railroad ties. The study is necessary in order for repairs to begin and is required in the lease with Metropolitan Transit System.

During a July 2014 board meeting of the San Diego Arizona and Eastern Railroad, representative for Pacific Imperial Railroad Charles McHaffie spoke of an unresolved dispute with engineering firm JL Patterson over a $40,000 debt. Four months later the debt has not been paid.

Despite not having the engineer's report, Metropolitan Transit System CEO Paul Jablonski and attorney Karen Landers have given the go-ahead to the rail company's Desert Line Reconstruction Plan.

"It is our understanding that there is still additional work for JL Patterson and/or its subcontractors to complete before work on certain portions of the right-of-way can be commenced," Landers wrote in an August 28 letter to Pacific Imperial president and attorney Donald Stoecklein.

Continued Landers, "...[T]he following supporting reports must be completed and submitted to [Metropolitan Transit System] for review and approval before work on an individual segment of Desert Infrastructure may begin."

Landers then went on to list the reports missing from the reconstruction plan: bridge repairs, a review of all tunnels and the track, as well as railroad ties and track signaling. Despite the shortcomings, approving the plan was necessary in order to speed things along.

"The reconstruction plan was approved to start the clock on the one-year Initial Repairs Milestone that requires [Pacific Imperial] to repair the right-of-way to the extent that a test train can operate. The plan’s deficiencies were noted and [the company] is responsible for correcting them and making the necessary repairs. The extra information requested was not deemed necessary to allow [them] to move forward with the plan in concept."

The president of Pacific Imperial Railroad also declined to provide an update on the report.

A recent incident seemed to create even bigger odds against Pacific Imperial’s success: last month, Mexican company Baja Rail ended negotiations with Pacific Imperial.

According to Metropolitan Transit System correspondence, "On or about October 17, 2014, [Pacific Imperial] was informed that Mr. [Baja Rail president Fernando] Beltran was not interested in negotiation [for] a binational railroad agreement with [Pacific Imperial Railroad]."

In response, despite numerous statements that no public money is being spent on the line, CEO Jablonski says he and boardmember and county supervisor Ron Roberts have taken matters into their own hands.

"Because all private negotiations between [Pacific Imperial and Baja Rail] appear to have been exhausted without success, [Metropolitan Transit System] staff is working with Mexico legal counsel to determine the most effective course of action to move the proposed binational railroad operations portion of this project forward."

Pacific Imperial Railroad's president Stoecklein commented on the breakdown with Beltran and Baja Rail in an October 23 letter to Jablonski and Landers. In it, Stoecklein wrote that negotiations were moving along quite smoothly. He sent Beltran "thousands of pages of documentation and agreements." Beltran refused to do the same.

"Unfortunately, the message delivered back to [Pacific Imperial Railroad] was that Fernando Beltran believes he is better off without [Pacific Imperial Railroad] as a joint-venture partner."

Officials at Metropolitan Transit System believe that trying to broker an agreement between the two companies is vital.

"This is a very challenging negotiation between entities in two different countries and the negotiations require a certain amount of government-to-government conversations," writes a spokesperson from Metropolitan Transit System. "The restarting of freight movements between Mexico and the Desert Line has major regional significance and [Metropolitan Transit System] wants the project to succeed. MTS is investing time to advance the discussions between [Baja Rail] and [Pacific Imperial], protect the public asset and maximize its value. This involvement also allows staff to better understand why the international agreements necessary for the Desert Line have been so difficult to obtain."

Not linking the two lines leaves Stoecklein with few options. It also dashes any hopes of anything remotely close to a "binational railroad."

In his letter, Stoecklein says his company has "activated its Secondary Transportation and Logistics Plan which does not involve transiting on rail into Mexico, however involves the utilization of current trucking operations in a transload operation in the United States."

In plain-speak, freight would be trucked into the U.S. from Mexico and then loaded onto trains.

The fate of the binational railroad looks even worse when considering that U.S. congressman Duncan Hunter has asked federal authorities to look into accusations of fraud by Pacific Imperial Railroad as well as Metropolitan Transit System.

In an email, Stoecklein said he was unable to respond due to pressing matters. MTS declined to comment.

(revised 11/11, 5:35 p.m.)

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AlexClarke Nov. 11, 2014 @ 4:56 p.m.

If there ever was a Pig in a Poke this is it.


rrmike7485 Nov. 12, 2014 @ 2:46 p.m.

GOOD NEWS from the Mexican operator!!

What I'd like to see is where the $1.5 Million dollars that PIR has paid to MTS has gone!!

Hopefully its not going back to PIR to keep this HOAX going(My Opinion Only)!!

Someone needs to Follow the Money!


Visduh Nov. 12, 2014 @ 9:18 p.m.

If this is a hoax, and I think so too, where did PIR get the $1,500,000 and why did they pay it to MTS? So far there's nothing to show for it all, and yet they paid up for a lease on a railroad they haven't reopened and haven't even started to renovate. Something is very wrong here, but it is not clear just what is happening. All the scrutiny by the media is causing some squirming and reducing the chance of finding funding to the vanishing point.


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