A company granted a 99-year lease to run a freight rail line from the border near Campo to Imperial County has again missed the deadline for a required $500,000 payment to the Metropolitan Transit System.

It’s the second time in six months that the company, Pacific Imperial Railroad, has missed the due date for the semiannual payment required under the terms of the lease.

The company was late on a payment in July and was issued a default notice by the agency, then was given 10 days to make the payment, which it eventually did.

The most recent payment was due by the close of the business day on Friday. MTS spokesman Rob Schupp said Monday that no payment was received.

That means another default notice will be issued today. The company will have 10 days to make good on the payment.

If no payment is made, the MTS board could consider terminating the lease at its meeting Jan. 29.

A railroad representative did not immediately respond to a request for comment on Monday about why the payment is late.

The railroad, known as the Desert Line, runs for 70 miles and has long been seen as a potentially lucrative boon to the regional economy. It’s part of a larger line that starts in San Diego, then dips into Mexico for roughly 40 miles before crossing again at the border near Campo.

Boosters have long hoped for linking the line in Mexico with a capable operator in the U.S. to create a rail route that could more efficiently move goods from the region to the east.

The line is in need of significant repairs that by most estimates would cost tens of millions of dollars.

In March U-T Watchdog first reported that Pacific Imperial is an investor group whose principals have a checkered history of lawsuits and bankruptcies. In addition, former executives who were brought on to raise capital and manage the rail line were ousted in early 2014, and have since accused some of the main PIR investors of fraud and financial mismanagement.


U-T San Diego