Texas High-Speed Rail Requires Caution
ID 87272147 © Vlad Salikhov | Dreamstime.com

Issue Brief

Texas High-Speed Rail Requires Caution

Texas Central’s project would be the first privately constructed high-speed rail line in the United States.

Copyright Texas CentralTexas Central’s project would be the first high-speed rail line in the United States, and the first privately constructed high-speed rail line in the world; a careful examination is vital.

Among other topics, this report examines the following:

  • The feasibility of constructing Texas Central’s proposed high-speed rail line between Dallas and Houston;
  • The cost of building a line along the 240-mile proposed route;
  • Ridership trends and projections in the Dallas to Houston corridor, which is well-served by the aviation and bus industries;
  • Travel trends, central city density, car ownership levels and spatial structure of the corridor endpoints; and
  • Traits specific to the Dallas to Houston corridor as compared to those of successful high-speed rail corridors in the U.S. and around the world.

While we strongly support privately constructed high-speed rail, particularly in the Northeast, we cannot support Texas Central’s proposed Dallas to Houston project. In spite of their large and growing populations, Dallas and Houston are poster children for big cities where high-speed rail has no chance of succeeding without public funding unless land use and transit patterns change dramatically.

We truly hope that high-speed rail becomes a reality in the United States, and we would prefer that it be developed and implemented by the private sector. However, based on our experience and analysis we are concerned that Texas Central’s project will fail so spectacularly that privately financed U.S. high-speed rail lines may never be given a second chance.

Perhaps there are some hidden sources of funding of which we are not aware. But as it stands, Texas elected officials, lenders, investors and taxpayers should demand full disclosure and pay close attention to the details because we do not believe that Texas Central can build the rail line without significant public subsidies. We believe that loans could default and we are particularly concerned that Texas Central may receive an RRIF loan that lacks stringent taxpayer protections. While Texas Central may not be intending to take any public funding, we believe that if construction starts, the project will inevitably have to be bailed out by the taxpayers of Texas, which is unacceptable.

A detailed analysis of the project is available here.


Full Brief: Texas High-Speed Rail Requires Caution