Addressing Texas High Speed Rail Concerns

The proposed new high-speed rail (HSR) project in Texas has become a lightning rod for criticism. While the project is different from the now cancelled publicly funded HSR projects in Florida, Michigan, and Ohio and the ongoing project in California, critics remain concerned.

The Texas project supported by Texas Central Railway (TCR) is fundamentally different from the U.S. public government approach in several ways. First, it focuses on one specific corridor (TCR chose one out of 97 it had identified). HSR succeeded in France and Japan because both countries build their first HSR lines on the most optimal corridor, not the most shovel-ready. Contrast that with the Obama Administration’s plans to give money to nearly 40 states. The TCR project is focused on true 200 mile-per-hour high-speed rail while the government program has a multitude of aims:

  • build HSR
  • improve existing rail
  • build political bridges
  • develop passenger rail

Second, the Texas developers are seeking advice and parts from the Japanese, who operate the most successful HSR line in the world. TCR plans to use higher-speed Japanese Shinkansen trains which will travel fast enough to offer 90-minute trip times. Many of the government-funded rail lines are upgrades of existing lines with top speeds of 110 miles per hour.

Third, TCR’s line will link two of the quickest growing metro areas in the country. The metro area populations of Dallas and Houston are expected to double. Contrast that with Los Angeles and San Francisco that are seeing little if any growth in population.

Fourth, both are privately funded. While TCR will not accept grants or subsidies, it will consider existing federal credit assistance such as Railroad Reinvestment and Financing (RRIF) or Transportation Infrastructure Finance and Innovation (TIFIA) loans. TIFIA financing requires an investment-grade rating while RRIF is being strengthened to include similar provisions. TCR might also seek DOT approval to issue tax-exempt private activity bonds (PABs), which are widely used on highway P3 concession projects. Such bonds are backed solely by project revenue. Taxpayers are not on the hook in case the project defaults; only the bond-buyers are.

Project opponents have raised legitimate concerns but none of them should delay the project. Some farmers and ranchers are concerned that their properties will be acquired through eminent domain. However, TRC only needs about 100 feet of eminent domain. Additionally, the agency plans to use eminent domain (as other private parties including pipelines companies and electric companies do) as a last resort and only after making market-value offers. Further, if there are abuses of the system, Texas has a detailed appeal system already used for the Keystone Pipeline.

Others are concerned that taxpayer subsidies will be required. Whether TCR can build its project within the budget estimated is an open question. Given the challenges of breaking even on HSR in a low-density state such as Texas, skepticism is appropriate. However, as long as taxpayer funds are not used, project sponsors should be allowed to try to build the train. If the project later requires taxpayer subsidies, Texas taxpayers should kill it. While the financial realities are a legitimate concern for those who invest equity in the program or buy bonds, the program should receive the same level of legal and regulatory scrutiny as any other private railroad project.

Comments (3)

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  1. Howard Robinson says:

    For those of you who don’t know, it is proposed to construct a high speed rail line between Houston and Dallas with trains running every 15 minutes from early morning till late at night at speeds in excess of 200 mph.

    The company promoting this venture is Texas Central Rail which is backed by a Japanese bank and the main spokesman is ex judge Robert Eckels who was chosen by the company for his name recognition and political connections.

    There are a number of routes under consideration and the final decision on which route has yet to be made by the Federal Railroad Authority. Whichever route is eventually decided upon, if indeed permission is in fact even granted, it will require the acquisition of private land by means of eminent domain. Eminent domain is only meant to be used for the public good and I will explain why this project does not meet that criteria later. It is completely wrong that private land that has been in the same family for generations should be taken to satisfy the needs of a Japanese company.

    Texas Central Rail and that man Eckels have constantly stated that this is a purely private venture and that no taxpayers money will be used or sought in the planning, construction or operation of the rail line. Tax payers money has already been used on this project in the form of environmental studies and other reports funded from the public purse. There is no high speed line in the world that is not heavily subsidized by the tax payer, and this ill conceived venture will be no different. You the tax payer will end up helping a foreign company make a profit off the backs of hard working Texans.

    If Texas Central Rail are so adamant that taxpayers money will not be used, why did they lobby so hard against a proposal in this years Texas Legislature that would prevent tax payers money being used in such a way? The only answer must be that they have a hidden agenda to apply for taxpayers money in the form of low cost loans or grants.

    Nine of the eleven Counties along the route have passed resolutions against the line and their wishes and the wishes of the people they represent should be honored.

    It has been stated by that man Eckels that the line will take traffic away from I 45 between the two cities and thus reduce congestion. This is a fallacy. The majority of traffic on I45 does not travel the whole route between Houston and Dallas but just uses it as an intermediate route. This will not change. Any people using the rail line will still need transport to the station and away from the station once they reach their destination. All the rail line does is move the traffic congestion off I45 and move it into the cities which are not equipped to cope with the extra demand.

    Goods traffic will not use the high speed rail so this will continue to use the highway system as always.

    The price of the rail fare will be comparable to the cost of flying. Both airports have the infrastructure in place to deal with the comparatively few travelers so why would people change to the train? Travel by vehicle will be considerably cheaper than both flying and the train, especially if a family is involved.

    It is in the DNA of Texans to drive, as this option gives them freedom of movement and the choice of routs, something that the rail line will not.

    The only people who will use the rail line are business executives and only then if their offices are situated in, or close to the respective stations. This is why the taking of land by eminent domain is not for the public good as it only benefits a few, and of course the foreign investors.

    The taking of land from farmers and ranches is not like the taking of land for the building of a pipeline. In that case the pipe line is buried and the landowner may continue to use the land above it. With the rail line, it will be fenced in for safety reasons thus preventing the rancher and farmer from having full use of their land. That man Eckels states that lengths of the track will be elevated or underpasses built beneath it in order that landowners may access all of their property. As this will considerably increase the cost involved and the Japanese company is only in this venture for profit, I do not expect this to happen.

    The above are just a few of the objections against this rail line which is unwanted, unrealistic and unworkable.

    Further information may be found at or or

  2. CRS says:

    I agree with Mr. Robinson – “The above are just a few of the objections against this rail line which is unwanted, unrealistic and unworkable.”

  3. Shelley Nygaard says:

    Liberty Minnesota Regional Center project & Joseph Wang

    Has anyone heard of an EB-5 (visa/citizenship for sale) connection as appears to be going on in the ZipRail proposal in Minnesota. Another unwanted, unrealistic and unworkable high speed rail line proposal.