Railroad firm makes MTS lease payment

The company that has a contract with the Metropolitan Transit System to rebuild and operate a border rail line made a $500,000 payment to the agency Friday, ten days after the deadline to do so.

The payment from the Pacific Imperial Railroad is required under the terms of a 99-year lease it has with MTS to run the Desert Line, a 70-mile length of track that runs from Campo to Plaster City in Imperial County.

The lease requires the company to pay MTS $1 million per year in two installments. The first was due on July 1 but the company, which has been the subject of accusations from former executives of fraud and whose key leaders have been involved in numerous lawsuits and bankruptcies, did not make the most recent payment at that time.

The company said it was holding the payments until a query about the validity of the lease that was raised in a June 27 letter from Rep. Duncan Hunter, R-Alpine, could be answered by the agency.

In a response this week to Hunter, the agency stood by the 2012 lease, saying it was a better deal for taxpayers than a previous agreement that was in place. It also said the award complied with state law and the lease protects taxpayers in the future because it requires the company to meet certain performance milestones that if aren’t met could result in the lease being terminated.