Federal funds to revive the Texas Bullet Train?
Long ago, when Texas Central first formulated its plans to build a high-speed rail line that would carry passengers between Houston and Dallas in just 90 minutes, company officials made waves and broadsides. promises that they would not seek any federal funding to build the Shinkansen Railway. .
However, it is a claim that the folks at Central Texas have steadily moved away from the situation over the past decade, as the company has been successful in securing regulatory permits and support that have brought the project closer to its reality, as we noted in our story in 2017.
So, it shouldn’t come as a surprise now that Texas Central recently announced that it is currently seeking $ 12 billion in federal loans to help fund the project’s estimated cost of around $ 20 billion. If the loan is successful, it will be the largest in the history of the railway rehabilitation and improvement fund, swallowing more than a third of the $ 35 billion debt limit that Congress has set in the funds.
Of course, politicians who have lobbied against the construction of the railway line since the announcement of the Japanese bullet train construction project began circulating in 2015 were quick to criticize Central Texas. for attacking federal funds. U.S. Representative Kevin Brady, a Republican representing The Woodlands, spoke out against the move, which makes sense since some of the landowners who most vehemently oppose the high-speed rail line are in rural areas of the State located between the limits of Houston and Dallas. .
“Texas Central Railroad has broken its promise again after years of swearing not to seek federal funding for its bullet train project,” Brady said in a letter to Department of Transportation Secretary Pete Buttigieg. “Taxpayers should not be left behind for wasteful plans that never materialize. I will always fight to protect federal taxpayers – not only in my district, but across America – to make sure our constituents aren’t stuck holding the sack when rail projects fail to pay off their loans.
But on closer inspection, the federal loan program that Texas Central hopes to tap is potentially one of the best chances the company will have of securing enough financing to finally begin construction. (At the end of 2019, Texas Central had announced plans to start construction in 2020, but that was all derailed, so to speak, by the COVID-19 pandemic which saw the company endure layoffs and cutbacks. ‘effective instead.)
If the company is approved for the loan program – a program that was created in 1998 specifically to incentivize companies other than freight trains to build or modernize their railways, according to a 2018 report released to Congress by the Congressional Research Service – it will simply access funds that will need to be repaid at an interest rate of 0.5%. The entire program is designed to help improve our rail infrastructure, allowing less profitable railways that do not operate freight lines to loan at no cost to the federal government.
So if Texas Central manages to secure that loan, the groundbreaking that city dwellers and rail enthusiasts have been waiting for could finally happen, marking the start of construction.
Texas Central appears confident despite delays related to the pandemic. This summer, the company signed a $ 16 billion deal with an Italian firm to build the line, and it was recently reported that investors had purchased properties south of downtown Dallas with the intention of install a station there.
If things go as planned, the Houston-Dallas line could be operational by 2028. Of course, so far, little has gone as planned, and rural Texas landowners who haven’t signed agreements with the company because the right of way is always opposed to the whole. (The Texas Supreme Court recently heard a prominent estate case from a Leon County landowner v. Central Texas.) But who knows, maybe this will really become a reality. The only thing that is certain is that if the company gets that federal loan, it will be much more likely.