One of the TCR’s big selling points of their proposed high speed rail line is that it will be privately financed and require no taxpayer subsidies for its operation. However, a recent study entitled, “Texas High Speed Rail: Caution Ahead” by Baruch Feigenbaum, the assistant director of transportation policy at the Reason Foundation, concludes that this will not be the case – the high speed rail project could end up costing Texas taxpayers over $500 million a year.
“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,” writes Feigenbaum. “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.”
The Numbers Don’t Add Up
Feigenbaum compared TCR’s proposed project to earlier Texas high-speed rail plans, higher speed rail lines in the Northeast corridor, and high-speed rail around the world, examining corridor density, corridor air service, corridor growth, corridor transit service and central city density. “Our analysis raises many questions and concerns regarding Texas Central’s project,” writes Feigenbaum.
Feigenbaum’s main concerns have to do with the enormous amount of capital needed to get the project off the ground (which the Texas Department of Transportation estimates to be about $18.3 billion) and TCR’s projected ridership numbers (which he says display “optimism bias”) that will not generate enough income to cover the railroad’s operating costs.
Taxpayer Subsidies May Be Inevitable
TCR executives were not pleased by the report’s findings, especially since Reason Foundation had previously expressed general support for the project, believing private high-speed rail to be an intriguing idea. One of their biggest complaints about this latest report was that the data Reason used in its analysis was outdated. Feigenbaum said the TCR would not share the most current data because he refused to sign a non-disclosure agreement.
“As it stands,” concludes Feigenbaum, “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.”
You can read the “Texas High Speed Rail: Caution Ahead” policy brief here.
Speak With an Experienced Texas Eminent Domain Attorney
The Texas eminent domain attorneys at Dawson & Sodd have been protecting the rights of Texas land owners for over a century. If you are a property owner who has been contacted by Texas Central Railway or other entity about acquiring your property, you should speak with one of our Texas property rights lawyers before agreeing to anything. Contact the law firm of Dawson & Sodd to schedule a confidential consultation with one of our Texas high speed rail lawyers.