Other Voices

Is rail company lying about building Texas bullet train without subsidies?

Bullet trains like those used in Japan soon could be used on route between Houston and Dallas.
Bullet trains like those used in Japan soon could be used on route between Houston and Dallas.

Many people in Texas oppose Texas Central Railway’s $10 billion to $12 billion “privately funded” bullet train from Houston to Dallas.

I interviewed three highly regarded, published industry experts who all agreed the project would likely become yet another unprofitable, taxpayer-subsidized train system.

Stanford University economics professor Alain Enthoven, who has studied high-speed rail (HSR) systems worldwide, explained:

“Dallas to Houston is a particularly bad venue for a HSR. Contrary to London or Paris, which have well developed public transportation to link passengers to the train station, making it easy to get to the train, in Dallas, there is ‘no there there,’ no downtown urban center that would aggregate passengers. Dallas and Houston are very spread out. Many people would find it better to drive their own cars so they do not have to rent a car when they get there … I don’t believe Texas Central’s assertion that they won’t need a subsidy.”

The assistant director of transportation policy for the Reason Foundation, Baruch Feigenbaum, concurred that the route faces “several challenges in Texas, including but not limited to: low-density of Houston and Dallas, lack of heavy/light-commuter rail transit systems, high car ownership, low costs of gas taxes, and the convenience of both Houston Hobby and Dallas Love airports to downtown.”

Gerard Llobet, associate professor of economics at Centro de Estudios Monetarios y Financieros (CEMFI) in Spain, said, “There are very few HSR lines that are considered profitable. Essentially, these are the Tokyo-Osaka line, the Paris-Lyon one and the line in China (Beijing to Shanghai).”

Texas Central, which has partnered with Japanese firm Central Japan Railway, has filed a petition before the Surface Transportation Board acknowledging it would use eminent domain even for parcels that ultimately aren’t needed for the train’s route.

Texans Against High Speed Rail is a group of citizens, private and business property owners and elected officials who oppose Texas Central’s use of eminent domain for private use and any taxpayer subsidies.

Texas Central says it will not take “any taxpayer grants or public money to subsidize its operations.”

“Eminent domain is a subsidy,” Enthoven said.

In its Hill blog, Texas Central asserted: “All the risk falls to private investors in this project, not the state or taxpayers.”

Feigenbaum said he doesn’t think that’s true, “especially with the significant amount of loans Texas Central would need. Texas Central will almost certainly need federal Railroad Rehabilitation and Improvement Financing (RRIF) loans.”

In a November 2015 Dallas Morning News interview, former Dallas mayor Ron Kirk, who works as a senior adviser on the train project “said that Texas Central will likely seek federal loans to partially finance the $10 billion project if such funds are available.”

“We will aggressively pursue those,” Kirk told the paper.

Crystal Wright is a public relations strategist in Washington, D.C., and editor of the Conservative Black Chick blog.