Transportation Consultants, Inc. (TCI) has successfully formed a public-private partnership with the New Orleans Public Belt (NOPB) to complete a rail infrastructure expansion project to accommodate a larger volume of cargo, which will trigger the start of TCI’s second significant expansion in the past three years. The partnership will finance infrastructure improvements that will enable TCI to increase its capacity, generating additional commerce for the city, additional revenue for the Public Belt, and additional business for TCI.
TCI, a logistics and packaging company, initially expanded into the France Road facility in 2008 when it purchased 27.3 acres of underutilized land from the Port of New Orleans and developed a $10 million state-of-the-art packaging and warehousing facility, as well as its corporate headquarters. The current railway expansion plan will accommodate approximately 300 new rail cars per month for the New Orleans Public Belt and 1980 new Twenty-foot Equivalent Units (TEU) exports per month from the Port of New Orleans.
TCI’s current expansion phase represents a $20 million private sector investment, and will create 20 new direct permanent jobs. The new rail infrastructure will enable approximately $1.2 million in incremental annual revenues to the NOPB from increased rail traffic. The expansion underscores the critical role that international trade and the Port of New Orleans play in the economic growth of New Orleans.
The infrastructure improvements facilitated by the public-private partnership will be made possible by financing secured by the NOPB. Based on a cooperative endeavor agreement between TCI and the NOPB, TCI will guarantee NOPB incremental annual revenues from switch and storage fees for a five year period. Initial projections indicate the NOPB will recover the cost of construction within 18 months, with total incremental revenues of approximately $5.8 million over the next five years.
This model catalyzes economic growth by enabling TCI to create jobs and invest in the expansion of trade. It also enables a public utility, the NOPB in this case, to mitigate the risk of expanding infrastructure and increase its cash flow.
This economic development project is a result of the strong partnership between NOPB, TCI, the City of New Orleans, the New Orleans Business Alliance, and GNO, Inc.
Mayor Mitch Landrieu stated, “This is a great example of the government and private sector working together creatively to create new jobs and increase commerce.”
“TCI is excited to have worked with the New Orleans Public Belt in creating this model of economic development for the City and our industry,” said Christian Jensen, President of TCI. “I sincerely hope this is the first of many projects that are able to secure funding in this cooperative manner. For TCI, this rail infrastructure expansion means we will begin expanding our resin packaging services for the Louisiana based chemical manufacturing industry, essentially assuring more Louisiana produced resins are exported using Louisiana ports. It’s a win for everyone.”
“Since 1904, the New Orleans Public Belt Railroad has played an important role in the continuing development of the economy of the City of New Orleans and Southern Louisiana,” said John Morrow, Interim General Manager of the NOPB. “The railroad is pleased to participate in the first-ever public-private partnership with one of its largest and fastest growing customers. We see this as a way that the NOPB railroad can contribute to the economic growth of the Port of New Orleans and increase commerce for TCI, a leader in the City’s business community, while furthering the NOPB’s mission of creating partnerships that enhance trade.”
“The partnership between TCI and the NOPB illustrates the amazing role public-private partnerships can play in economic development,” said Rodrick Miller, President and CEO of the New Orleans Business Alliance. “Not only is TCI leveraging the NOPB’s resources to complete its rail infrastructure project in the short term, but TCI is also committing to continued investment in the NOPB, and by extension, the local New Orleans economy for the long term.”
“Through regional public-private partnerships, we are achieving a key goal of increasing the level of value-added production handled within Greater New Orleans. This will add to local jobs and bring shipping activity back from out-of-state to the Port of New Orleans,” said Michael Hecht, President and CEO of Greater New Orleans, Inc. “We are all pleased with the precedent of this project.”