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Blessing or Boondoggle? Texas Bullet Train

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For years, Texans have been hearing about a proposed high-speed “bullet” train to link Dallas and Houston.

The company in charge of this project is Texas Central Partners, and they have claimed they can get passengers between the two cities in just 90 minutes. That’s considerably less time than the 4-5 hour drive on I-45.

They have also promised they can and will build the railroad without any tax dollars.

Free-market, venture capitalist Republicans should love what they’ve heard.



But not all are on board. Are they just stubborn, or are TCP’s claims too good to be true?

According to opponents – most living in solid Republican districts – there are some major concerns with the project, namely: property rights and funding.

Property Rights

The proposed route is 240 miles long.

It has proven difficult for Texas Central Partners to acquire the needed property along the route. Many land-owners are either disinterested in moving, or are dissatisfied with the compensation they’re being offered.

In some cases, land owners refused to allow surveyors onto their properties at all. Texas Central Partners responded to these refusals by taking the land owners to court. As far as we can tell, however, those cases were all dropped when TCP realized they could not win.

But TCP is now threatening to use eminent domain power to require land owners to sell.

Texas law allows railroads to seize property through eminent domain. It’s a practice that began in the days when trains were the main and most advanced form of long-distance transportation.

TCP will make this argument in court in July.

Funding

Assuming Texas Central Partners is able to acquire the land one way or another, the cost of construction and maintenance could end up being much higher than anticipated.

TCP estimates the project to cost $12 billion.

TxDOT (Texas Department of Transportation) calculated $18 billion.

But a recent study conducted by the Reason Foundation, a free-market think tank, estimated it at $21.5 billion.

Specifically, the foundation believes the company has exaggerated their ridership projections and underestimated their maintenance costs.

There is a great fear that TCP will go the way of the now-infamous and disastrous California rail project. High-speed rail in that state seems to be a money-pit as construction has faced huge delays and its budget has doubled. It has relied on billions in public funding and consumed much-needed resources to deal with failing dams and flooding. That project is not expected to be completed for at least 10 more years.

TCP has now hired a lobbyist in Washington, D.C. whose job is to get green lights from the Trump administration.  But since Trump has promised a $2 trillion infrastructure program, it certainly raises suspicion that TCP is after another kind of green.

If TCP intends to build this rail without public funding, as they have asserted, they will need to do what all private companies do – make a profit. But scholars, journalists, activists, and lawmakers have all raised doubts that the company will be able to do so.

It really boils down to whether or not people will actually ride this train. And ridership will depend on a couple major factors: cost of a ticket, and available transportation within the destination city.

According to Google, a flight between the two cities is about an hour. When you add getting to the airport at least an hour early, de-boarding, and baggage claim, its about two and a half hours.

So if it only takes 90 minutes on the train, TCP believes passengers will be incentivized to choose rail. To further incentivize it, they believe they can beat airline prices.

Texas Central has estimated between 4 and 5 million passengers per year.

Rep. Cecil Bell reports on his website that TxDot estimates there are 3.3 million frequent flyers between the two cities per year.

According to Reason, there are only 2 high speed rail systems in the entire Westernized world which turn a profit – Paris to Lyon, and Tokyo to Osaka. Here’s how those scenarios compare to Dallas to Houston route:

Texans drive a lot more than the French and Japanese

Texans are more spread out than the French and Japanese.

The numbers outlined by Reason could forecast a serious shortfall against the ridership numbers being projected by TCP.

Low ridership means bankruptcy. And bankruptcy can lead to taxpayer-funded bailouts.

Bell has a calculator on his website that allows you to calculate ridership and ticket costs yourself and see what it would take for the project to succeed financially. He has filed legislation targeting the project.

Opposition in the Texas Legislature

Larry Korkmas with Texans Against High Speed Rail spoke to us by phone. According to him, there are at least 20 bills in the legislature to place protections on private property and restrictions on the use of public funds.

Rep. Byron Cook has complained that TCP isn’t even a railroad company because they have no stock in railroads, and no prior experience ever building railroads. Thus, he argues, they cannot use eminent domain.

In a recent budget hearing, Senators voted 14-1 to approve language that would prevent the Department of Transportation from expending any taxpayer resources on “funding, planning, construction, maintenance, security or operation of high-speed rail.”

Though Texas Central Partners maintains they will not ask for public funding, they did come out in opposition to the Senate measure, calling it unnecessary.

A major recent development could help shape the debate in the legislature. The powerful Texas Association of Business just named Jeff Moseley as its head. Moseley is also the Vice President of Texas Central Partners. If Moseley is able to wield the power of the TAB effectively, he could rally big-business urban legislators to kill some of the more substantive anti-rail bills.

Texas Central Partners says it wants to start laying track in 2018. What happens in the next two months of this session could significantly alter that plan – or effectively green light it.



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