Pacific Imperial Railroad

Pacific Imperial Railroad

Company type	Private
Industry	Railroad transportation
Founded	October 1, 2011 (2011-10-01) in Delaware, United States
Fate	Filed for Chapter 11 bankruptcy in October 2016; assets sold in March 2017
Headquarters	United States
Area served	Southern California, Cali-Baja region
Key people	Arturo Alemany Salazar (CEO and president from October 2015)
Products	Rail freight services on the Desert Line

The Pacific Imperial Railroad (reporting mark PIR) held control over the SD&AE Desert Line right of way in Southern California, commonly referred to as the Desert Line. This rail corridor extends 70.1 miles from the U.S.-Mexico border near Campo, where it connects with the Baja California Railroad in Mexico, traversing the Jacumba Mountains to reach El Centro. At El Centro, it links with the Union Pacific Railroad. This route serves as an alternative rail pathway supporting distribution and supply chain activities within the Cali-Baja region.

History

Established in Delaware in October 2011 and authorized to operate in California by April 2012, PIR's objective was to lease, refurbish, and manage the Desert Line stretching from the border to Plaster City. In December 2012, PIR entered into a 99-year lease agreement with the San Diego and Arizona Eastern Railway (SD&AE) and the San Diego Metropolitan Transit System (MTS), who own the Desert Line.

After assuming operations from prior operators, PIR encountered operational difficulties and was subject to investor disagreements in early 2014, although company representatives refuted these claims. By late 2014, discussions with Baja California Railroad (BJRR) regarding freight rights across Mexico had reached an impasse but showed progress by mid-2015. This improvement led to a memorandum of understanding focused on developing a binational rail system and revising lease milestones with MTS.

Ownership of PIR shifted predominantly in 2015, and Arturo Alemany Salazar was named CEO and president in October of that year. In June 2016, PIR and BJRR agreed to divide rehabilitation duties: BJRR took responsibility for the segment from Campo to Coyote Wells through a sublease, while PIR managed operations from Coyote Wells to Plaster City. BJRR anticipated commencing restoration efforts in summer 2016.

In October 2016, PIR filed for Chapter 11 bankruptcy protection to attract strategic investment aimed at asset development and resolving creditor claims. CEO Alemany highlighted that this step would enable capital raising and optimize asset value amid previous financial challenges caused by outstanding claims.

On March 10, 2017, a U.S. Bankruptcy Court authorized the sale of PIR's Desert Line leases and development rights to a Nevada-based company affiliated with Baja California Railroad. The bankruptcy proceedings remained active as creditor payments were processed and investor litigation continued.

Operations

In June 2013, PIR collaborated with J.L. Patterson & Associates, Inc. to conduct inspections on bridges, tunnels, tracks, and rails along the Desert Line. By October of the same year, a comprehensive report detailing the condition of the bridges was finalized. Initial maintenance by J.L. Patterson included removing sand from the right-of-way and employing specialized technology to detect defects in the track infrastructure.

By July 1, 2015, PIR had remitted $2.5 million in lease payments to MTS, the proprietor of the Desert Line right-of-way. On June 9, 2016, PIR revealed a cross-border agreement with Mexican stakeholders focused on rebuilding the Desert Line. This initiative was designed to provide affordable shipping solutions for international companies transporting goods such as vehicles from Mexico to the U.S. East Coast.

Projects

PIR concentrates on serving the maquiladora sector by facilitating interchange connections with Baja California Railroad at the Mexico–US border point (Division/Lindero) and with Union Pacific Railroad located in Plaster City, California. The firm intends to fund the development of the "El Lindero" customs facility, intermodal interchange, and an adjacent industrial park near the border area.

Rehabilitation work on the Desert Line commenced in August 2013. To support these upgrades, GATX removed 49 empty boxcars from the inactive track in August 2015.