Waste of the Day: ‘Infeasible’ Private Texas High-Speed Rail Collects $500K Grant, Seeks More
Topline: A long-delayed and over-budget proposed high speed rail between Houston and Dallas/Fort Worth pitched as a wholly private enterprise, has now received $500,000 from the Federal Railroad Administration for a study, even as the company planning it is being run by another company.
Key Facts: Launched in 2015 as a private venture by Texas Central Railway, the planned 240-mile high-speed rail line, was anticipated to run at 200 MPH+ between Houston and Dallas/Fort Worth with a travel time of less than 90 minutes.
Initially estimated to cost $10 billion, by 2020 it became a $30 billion project. Texas Central Railway also committed to constructing and operating the proposed system without public funding, and received tens of millions of dollars in financing from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development.
But the company and Amtrak have since partnered to apply for government grants, including the $500,000 it received from the Federal Railroad Administration for a study.
Texas Republican Reps. Jake Ellzey and Michael McCaul wrote a September letter to the Federal Railroad Administration to oppose the grant applications.
“By partnering with Texas Central, organized as a private limited liability corporation, Amtrak will funnel federal taxpayer money to a private corporation for what was initially proposed as an exclusively privately funded venture,” they wrote. “The project has received fierce pushback from rural landowners as well as county and local governments along the proposed route.”
Background: Texas Central Railway’s C-suite resigned, beginning with its CEO in 2022. The company is now being managed by FTI Consulting, which specializes in “liquidity forecast development, business plan development and analyses, collateral evaluations and recovery assessment and contingency planning,” according to the company biography.
Texas Central Railway still has its name on the project, has tried to buy private property from landowners and has had multiple legal battles with landowners and Grimes County, who refuse to sell land.
In June 2022, the Supreme Court of Texas ruled that the company has eminent domain authority on land that is needed to build the rail line.
While the company said the project would create 17,000 jobs and have an economic impact of $36 billion, landowners raised concerns about the abuse of eminent domain and questioned how many passengers would use the train.
Re-Route the Route, an advocacy group supportive of moving the rail alignment to a safer location, has opposed it.
Critical Quote: “If approved, these applications will result in taxpayer money being used by a private company to take private land from landowners through eminent domain,” Reps. Jake Ellzey and Michael McCaul wrote in their letter to the FRA. “Landowners deserve to have their land rights protected against the unrealistic and financially infeasible rail project proposed to be funded through these applications.”
Summary: Not only shouldn’t a private train line receive federal funds, but taxpayer dollars especially shouldn’t be pumped into a project that appears dead in the water, one whose price tag almost doubled and whose leaders jumped ship.
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