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Fast Company
20-05-2025
- Business
- Fast Company
High-speed rail is on life support in Texas. Can a hedge fund save it?
Dallas and Houston are just 250 miles apart, but a train trip between the two cities currently takes more than 23 hours, including a seven-hour stopover in San Antonio's Amtrak station. The Texas Central high-speed rail project aims to change that. The proposed project would cut the travel time down between the nation's fourth- and fifth-largest metro areas to 90 minutes, using Japanese technology to propel the trains 200-plus mph. It also would include a stop in the Brazos Valley. Former President Joe Biden's Department of Transportation was eager to help advance the project. Amtrak came aboard in August 2023 to determine if it was viable. The DOT also issued a $63.9 million planning grant last year. But the DOT under President Donald Trump quickly reversed course. Last month, the department announced that it had rescinded the grant and that Amtrak would no longer be involved in the project. 'If the private sector believes this project is feasible, they should carry the preconstruction work forward, rather than relying on Amtrak and the American taxpayer to bail them out,' Transportation Secretary Sean Duffy stated in the news release announcing that the department was canceling the $63.9 million grant. The move comes as the U.S. continues to lag behind other wealthy countries in its pursuit of high-speed rail—a mode of transport that's safer, more efficient, and more sustainable than traveling by car. High-speed trains can cover the 820 miles between Beijing and Shanghai in a little over four hours. In Europe, a new high-speed train connecting Paris and Berlin launched in December. Even though it's a red state, Texas has recently been pursuing high speed rail—and it could certainly use it. For example, Houston ranks among the 10 most congested cities in the country and among the 10 most polluted. The state of Texas hasn't gone a day without a death on its roads since November 7, 2000. High-speed rail in a pro-car administration The Trump administration's early actions show that the next four years are likely to be challenging for high-speed rail projects. The DOT has set its sights on two of the country's three most advanced high-speed rail projects. In February, it announced a review of a high-speed rail project in California—another state with air quality and congestion issues—that would connect San Francisco and Anaheim. Eric Goldwyn, an assistant professor at New York University's Marron Institute of Urban Management, said it's not a great moment to be working on a high-speed rail project—particularly one that needs public funding. That said, it's not totally clear how the Trump administration will come down on projects that rely on private financing. 'Right now, it sort of has the feeling of dramatic statements coming from USDOT and dramatic gestures, but less substantive actions,' Goldwyn said. Trump's DOT seems to favor privately funded projects. In the announcement about the California High Speed Rail probe, the department praised Brightline, a private company that operates a rail line between Orlando and Miami and plans to open another line between the Los Angeles area and Las Vegas in 2028. Even those projects require public support, including a $3 billion grant for Brightline West—of which the company has spent $98 million thus far. The San Bernardino County Transportation Authority also received $25 million from the federal government for Brightline West stations in Hesperia and Victor Valley, California. The long and winding history of Texas Central The Texas Central project has seen many iterations since it first kicked off in 2014. In fact, the state's efforts to build high-speed rail go back to 1989 when it created the Texas High Speed Rail Authority. As for Texas Central, it appeared to be dead when transportation projects nationwide slowed to a halt during the pandemic, but the partnership with Amtrak helped to revive it. Peter LeCody has been advocating for high-speed rail in Texas since the early 2000s and has watched the entire Texas Central battle play out. LeCody, who's the president of the Texas Rail Advocates, sees a line between the two cities as a no-brainer. 'You've got two of the largest population areas in the country that really don't have much of a transportation system, unless A. you want to drive, or B. you want to fly,' he said. Now, he said the project is on the '10-yard line,' because of the regulatory hurdles it has cleared. The FRA approved the route in 2020. The Texas Supreme Court ruled that the Texas Central project had eminent domain authority in 2022. The preference for privately backed rail projects could portend well for the Texas project. As Amtrak exits the project, Texas Central has turned to the private sector. Kleinheinz Capital Partners, a Fort Worth-based hedge fund, became the lead investor on the project earlier this year, although they declined to share specifics about how much they had invested so far. (Kleinheinz Capital did not respond to a request for an interview but in a statement said the project was 'shovel ready' and would create new jobs in Texas. 'We agree with Secretary Duffy that this project should be led by the private sector, and we will be proud to take it forward.') A representative from Texas Central told Texas legislators the project could be completed in 80 to 86 months during an April 17 hearing. John Kleinheinz, the company's CEO, told the Houston Chronicle that he believes the Trump administration is 'interested in this deal' if it comes from the private sector. Kleinheinz, a longtime Republican donor, will likely be looking to bring aboard additional investors to push the project across the finish line. The DOT news release stated that the project cost is $40 billion. A project with bipartisan support—kind of Despite having some bipartisan support, skeptics and opponents remain. In November, State Representative Brian Harrison filed a bill seeking to strip Texas Central of its eminent domain authority. State Representative Cody Harris filed a bill that would bar the state from spending on a high-speed rail project operated by a private entity. It also would forbid the state from spending money to alter the roadway for high-speed rail. 'For years, I've led the fight to expose the truth about Texas Central and protect our landowners from an overreaching, taxpayer-funded boondoggle,' Harris said in a statement. At the time of publication, neither Harrison's nor Harris's bills have been voted on by the Texas House of Representatives. ReRoute the Route is one of the groups opposed to the project. While they aren't opposed to high speed rail in theory, the group says it wants the rail's alignment moved from its currently proposed route to run alongside I-45—the highway that connects Houston and Dallas—instead. ReRoute the Route spokesperson Jennifer Stevens said the organization wants the project to proceed without 'taxpayer dollars,' but said she isn't confident Kleinheinz is the right person to lead the project. 'We've had a lot of discussion about his overall lack of knowledge or experience in the rail industry,' she said. Stevens added that her group has not met with Kleinheinz, who has been an investor in the project for 10 years. Jim Mathews, president and CEO of the Rail Passengers Association, said high-speed rail projects should be seen as an enticing investment for private entities. 'All these rail investments, they're very capital-intensive, but they return enormous, enormous multiples on what you put into them,' he said. 'When you put the money in, you get alongside it mixed-use, retail, condo buildings, high-rises. . . . That, in turn, generates additional economic activities.' He added that the DOT's decision to rescind the grant isn't necessarily a death blow to the project, but he said government money is typically needed for well-run high-speed rail systems. High-speed rail doesn't exist yet in the U.S., Mathews said. In fact, it's so unique that the FRA needed to create a special set of rules for the Texas Central project. But he and other advocates say high-speed rail is attractive to Americans. A 2015 APTA survey found that 63% of Americans said they were likely to use high-speed rail if it were available to them. 'From a policy and a psychology standpoint, we tie bricks around our ankles and then we wonder why we can't run,' Mathews said. 'It gets done everywhere else. We're just uniquely bad at it. There's no reason we have to be.'
Newsweek
13-05-2025
- Business
- Newsweek
Why Is US High-Speed Rail Taking So Long?
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. High-speed rail has been touted as one of the top priorities by many politicians in the U.S., but despite almost two decades of talk, the country's top projects are barely taking off. In the past 20 years, in which countries like China have laid more than 25,000 miles of high-speed rail track, the top U.S. projects have barely gotten started, causing the technology's top proponents to ask the big question: What's taking so long? All Aboard In America The largest high-speed rail project being worked on is in California, where 500 miles of track are planned to connect San Francisco, Sacramento, Los Angeles and San Diego. Originally approved by voters in 2008, the project is only ready to start laying track this year, after costs spiraled from $40 billion to as high as $128 billion. The smaller-scale Texas high-speed rail project, which would connect Dallas with Houston over 240 miles, was first proposed in the 2000s but has yet to break ground, despite partnerships with investors from Japan who have a proven track record with bullet trains. On their current timelines, neither project is set to become fully operational before 2030, meaning from beginning to end, their planning and construction will take more than two decades, assuming there are no further delays. Federal And Local Opposition One of the biggest barriers the projects face is political opposition. Infrastructure projects are costly, take a long time to yield any benefit, and the nature of high-speed rail means that a lot of stakeholders in a variety of locations need to be on board. In the U.S., that consensus does not exist. The California high-speed rail system has faced repeated attempts from local legislators to shut it down, with many California Republicans fearing that the project is a money pit with no end. As recently as this February, state legislators have called on Governor Gavin Newsom and President Donald Trump to put a stop to the project, with an open letter condemning high-speed rail reading: "Promised to be completed by 2020 with a price tag of $34 billion, HSRA's projected budget ballooned to over $128 billion. "Voters were told that more than 20 percent of the project would be privately funded. Instead, taxpayers face the reality of single-handedly funding massively inflated costs for a project that many will never use or see completed. By all metrics, the High-Speed Rail is a colossal failure." A map of the Houston-Dallas high-speed rail system, designed by Texas Central. A map of the Houston-Dallas high-speed rail system, designed by Texas Central. Texas Central Texas' project faces a similar issue, with the state Legislature having misgivings over the transparency of Texas Central Rail, the company spearheading the Houston-Dallas line. In April, the state's transportation committee held multiple meetings on the project's finances while the wider Legislature debated whether or not funding should be revoked. On top of that, the projects have to deal with the position of the federal government, which, for the last eight years, has see-sawed between support and hostility. During his first administration, Trump branded high-speed rail as a "green disaster" and a "waste" and demanded that California return $3.5 billion in federal funding allocated for its project. The Biden administration reversed the approach in 2020, only for Trump to then reverse it back this year, cutting off all future federal funding and prompting Transportation Secretary Sean Duffy to initiate a review into whether the project complied with funding requirements. The impact of the legislative hurdles is being felt at the construction site. Why Is U.S High-Speed Rail Taking So Long? Why Is U.S High-Speed Rail Taking So Long? Newsweek illustration/ Getty Images "The [California] project has faced many challenges, including right-of-way acquisition, pre-construction activities like third party agreements to relocate utilities in the system's path, various permitting requirements under state and federal law, time consuming and redundant state and federal environmental review processes, legal challenges related to those reviews, and a lack of full project funding which has resulted in costly delays and inefficient delivery," a spokesperson for the California High-Speed Rail Authority told Newsweek. "The Authority has taken measures to mitigate schedule related to right-of-way acquisition based on lessons learned, including staged delivery process where major construction begins only after right-of-way has been acquired." The Lay Of The Land One of the other biggest delays facing U.S. high-speed rail is the very ground it's being built on. Before shovels can even touch the soil, landowners, environmental agencies and local authorities need to be consulted and convinced that the project can go ahead, and for such long-term and complex constructions, that can be a tough sell. "High-speed rail is extraordinarily complicated to engineer for and severely disrupts the terrain upon which it operates," John Sitilides, a federal affairs adviser to ReRoute the Route, the business and civic coalition opposing the current Texas project model, told Newsweek. "It has a profoundly detrimental effect on the environment and as such often requires a dense and lengthy federal regulatory NEPA review to protect the public. "Also, private project backers often try to value-engineer the route and project to save money, even when this approach may not result in the best outcome for transportation users, the environment, landowners or the general public. This cheap approach will often receive needed pushback from governing authorities, landowners, and other affected parties in the form of lawsuits and required changes. For example, the original backers of the proposed Texas project chose what they thought was the cheapest route to construct on, even though it did not best serve the public or advance the goal of transporting people efficiently and cost-effectively." For property owners along the route of any proposed rail network, their relationship with the construction project becomes antagonistic, as legislators are able to prevent private development in areas that the trains might need to pass through. In response, landowners dig in their heels and drag out the process as long as possible. A map showing California's proposed high-speed rail network from February 2021. The initial operating segment, between Merced and Bakersfield, is expected to begin services between 2030 and 2033. A map showing California's proposed high-speed rail network from February 2021. The initial operating segment, between Merced and Bakersfield, is expected to begin services between 2030 and 2033. California High Speed Rail Authority "High-speed rail destroys property, period," Sitilides said. "The only properties that benefit are terminal sites. Every other property is irreparably harmed by being bisected or severely impacted with no cross access. "Landowners who receive no benefit resist these takings of their property by inept project planners who have no clear path to financing their project, yet can thwart or prevent the use and development of private lands by landowners along the route for many years, as has occurred in Texas since 2015 with no end in sight. "Publishing a proposed 'route' harms property values along or adjacent to that route for hundreds of miles, whether in California or in Texas, even if the project ultimately is never built. It is similar to an inverse condemnation or a taking without an actual taking. "There will be natural resistance from landowners, taxpayers, and the general public in such scenarios that government bureaucrats easily neglect or dismiss, much to their eventual dismay and consternation." Future Of U.S. High-Speed Rail Despite the setbacks, the California and Texas projects maintain an optimistic outlook. "California's high-speed rail program continues to deliver on its promise to build a fully electrified, high-speed rail system between the Bay Area and Los Angeles—creating jobs and economic opportunity, supporting housing affordability, and laying the foundation for a modern, connected transportation network that serves all Californians," a spokesperson for the authority told Newsweek. Texas' project struck a similar tone when approached by Newsweek, thanking the first Trump administration for its original approval. A Texas Central spokesperson said: "No other state can match Texas' healthy, 'can-do' business environment—or better understands how to meet the needs of its people. The first Trump Administration gave this project the greenlight and, unfortunately, it got hung up in Biden Administration politics. "We're proud to once again be moving forward under President Trump," the spokesperson said. "Texas Central is shovel-ready. The project will improve mobility and safety for Texans, create significant new jobs, and accelerate economic growth in the Lone Star State." For both projects, construction is only just beginning, and the political opposition isn't going anywhere.
Yahoo
17-04-2025
- Business
- Yahoo
In 12 Years, This $40 Billion High-Speed Rail Line in Texas Has Not Laid a Single Foot of Track
The decade-plus battle to bring high-speed rail to Texas could soon be over. On Tuesday, Transportation Secretary Sean Duffy delivered a blow to the project, known as Texas Central Railway, by rescinding a $63.9 million federal grant. Duffy called the project "a waste of taxpayer funds." The Texas Central Railway was unveiled in 2013 as a fully privately funded high-speed rail project connecting Dallas and Houston. Originally estimated to cost $10 billion, the project would be able to shuttle passengers between the state's two largest cities in 90 minutes (versus nearly four hours in a car). Like other high-speed rail projects before it, Texas Central has run into project delays and cost overruns. By 2019, the project's investors updated their original cost estimates to $20 billion. In 2020, project estimates were updated again to $30 billion. A 2023 analysis by Baruch Feigenbaum, senior managing director of transportation policy at Reason Foundation (the nonprofit that publishes Reason), estimates that the project's operating and construction costs will be at least $41.6 billion. In September 2024, the Biden administration awarded Amtrak a $64 million grant to move the project forward. Despite this federal support, Japanese investors backed out of the project after claiming to have lost $272 million. Kleinheinz Capital Partners, an investment firm headed by Fort Worth businessman John Kleinheinz, "bought its Japanese investors out of the project in January," reports The Texas Tribune, to become the rail line's controlling interest. Andy Jent, a representative of Texas Central, told the Tribune that the project had acquired 25 percent of the land it needed to build the route. Despite Tuesday's announcement from the Transportation Department, which also directed Amtrak to rescind project leadership, the project appears ready to forge ahead. "We agree with Secretary Duffy that this project should be led by the private sector, and we will be proud to take it forward," Kleinheinz Capital said in a statement. "Our interpretation of what the Department of Transportation released a couple of days ago is that number one, they don't want Amtrak leading this project," Jent told the Texas House of Representatives' Transportation Committee on Thursday. "We also don't believe that that's in the best interest of the state of Texas or in the best interest of this project." Despite the optimism, the project faces a long route to completion. The rail line has yet to lay a single foot of track or acquire the necessary permits to begin construction. In 2020, the Federal Railroad Administration issued a final environmental impact statement under the National Environmental Policy Act, which did "not grant any kind of construction approval or permit. Neither does this final rule, by itself, grant any permission or authority" for the company to operate. "The publication of this final rule is the beginning for [Texas Central Railroad], not the end, of its continuous obligation to demonstrate compliance with the regulation." As of January 2024, the project had not received the necessary permits from the federal Surface Transportation Board to begin construction. The city of Houston has not approved a terminal site for the train, but Dallas has spent $1.5 million on an economic feasibility study for the project, Dallas City Council member Omar Narvaez told KERA News. The project has also faced opposition from the state government. In 2017, Texas lawmakers passed a law prohibiting the Texas legislature from appropriating funds "related to the planning, facility construction or maintenance, security, or operation of a high-speed rail project operated by a private entity." In June 2022, the Texas Supreme Court ruled that Texas Central could use eminent domain for the rail line, which has been met with staunch opposition from Texas landowners. This legislative session, state Rep. Brian Harrison (R–Waxahachie) introduced a bill that would prevent a private entity that operates high-speed rail from using eminent domain. Lawmakers are also considering a bill sponsored by Rep. Cody Harris (R–Palestine), which would make it impossible for state funds to be used to pay for the alteration of roadway because of high-speed rail construction. Jent told lawmakers on Thursday that he still considers the project alive, but Kleinheinz is not, at this time, "proposing construction of the project." Once the developers give the green light, Jent expects that it will take six months to finalize project planning. During that time, Texas Central would secure more financing and submit a final permit to the Surface Transportation Board. Jent expects it would then take 80–86 months to complete construction of the project. This estimation is a bit ambitious, Feigenbaum tells Reason. With the project's cost ballooning from $10 billion to over $40 billion, "I don't see how they're going to come up with" the funding that's needed for the rail line, he says. In his testimony to lawmakers, Jent said that he expects the Japan Bank for International Cooperation to "provide some form of financing" in the future (although the bank is not funding the project right now). Feigenbaum says the project, which was essentially dormant before, will likely become dormant again. The post In 12 Years, This $40 Billion High-Speed Rail Line in Texas Has Not Laid a Single Foot of Track appeared first on
Yahoo
15-04-2025
- Business
- Yahoo
Trump admin cuts $60M for bullet train. Can railway from Dallas to Houston still happen?
Amid widespread federal funding cuts under President Donald Trump's administration — which include the elimination of hundreds of programs and thousands of job losses — the Department of Transportation has nixed $60 million in federal funding for the proposed high-speed rail project intended to connect Houston and Dallas in just 90 minutes, according to Texas Tribune. For nearly four decades, Texans have pushed for a bullet train to connect the state's largest cities. In late 2023, that vision appeared closer to reality when former President Joe Biden announced $8.2 billion in new grants as part of a broader nationwide rail initiative. Now that funding has been rescinded, and even before the reversal, the project faced mounting setbacks. The parent company recently reported ongoing struggles with land acquisition and changes in ownership. High-speed railway transportation, also known as bullet trains, can travel at speeds of up to 200 mph. In Texas, the initiative would connect the state's two largest cities, Dallas and Houston, shortening the travel time from hours to 90 minutes. Nearly 100,000 residents travel the 240-mile journey between the two cities each week — and some even more frequently, according to a 2012 study conducted by NYU's Rudin Center for Transportation. With stations planned at The Cedars neighborhood near Downtown Dallas and the Northwest Mall site in Houston, the train would depart every 30 minutes during peak periods each day and hourly during off-peak periods, according to Texas Central, a Dallas-based company that devised the plan. The train would also make one stop along the route in Grimes County. Even with federal support, the bullet train came with a hefty price tag — more than 560 times the funding allocated under the Biden administration. The project is expected to cost at least $33.6 billion, according to an estimate from the Reason Foundation. Originally, the high-speed rail line between Houston and Dallas was pitched as a privately funded venture, led by Texas Central Railway. The plan relied on private investors, both domestic and international, to finance the bulk of the project with minimal public funding. But as costs soared, it became clear that private investment alone wouldn't be enough. The company eventually turned to the federal government, seeking grants and loans to help close the gap, which now seems to have been pried back open after the funding was rescinded. During a House committee hearing in March, Texas Central — the private company behind the high-speed rail project — confirmed it had bought out its Japanese investors. Company representative Andy Gent announced that the project is now backed by Texas investor John Kleinheinz. The hearing also revealed that Texas Central has secured only about one-quarter of the land needed for the 240-mile rail line. To date, the company has acquired roughly 1,600 land parcels, including around 500 single-family homes. The bullet train project has sparked debate for decades, with controversy following it from the beginning. In 2022, the Texas Supreme Court ruled that Texas Central qualifies as a public interurban electric railway company, granting it the power of eminent domain. This allows the company to acquire private land for construction, including residential properties, farms and ranches. One Dallas-area farmer told CNBC last year that he struggles to sleep at night, fearing the rail line could cut through his property. Despite the ongoing disputes, Gent attributed project delays to the COVID-19 pandemic. He also stated that Texas Central now needs more time "to figure out if we can put the bigger transaction together with the Trump administration and the state of Texas." Although the federal funding was rescinded — a move praised by many for relieving taxpayers — it wasn't the deciding factor in whether the railway would become a reality. For now, the project is likely to remain at a stalemate as the company continues its efforts to acquire more land and secure additional funding. This article originally appeared on Austin American-Statesman: Texas high-speed rail project loses over $60M in federal funding
Yahoo
03-04-2025
- Business
- Yahoo
Will high-speed bullet train between Dallas and Houston ever become reality?
For nearly four decades, Texans have pushed for a bullet train to connect the state's largest cities. With its vast size, traveling between Texas' major cities can take hours. Even the 35-mile drive from Dallas to Fort Worth can become a frustratingly long journey on its worst days. In late 2023, the dream of high-speed rail seemed closer to reality when former President Joe Biden announced $8.2 billion in new grants as part of a broader nationwide rail initiative. Now, however, that vision is facing major setbacks as the company behind the project reveals challenges with land acquisition and new ownership, reported. High-speed railway transportation, also known as bullet trains, can travel at speeds of up to 200 mph. In Texas, the initiative would connect the state's two largest cities, Dallas and Houston, shortening the travel time from hours to 90 minutes. Nearly 100,000 residents travel the 240-mile journey between the two cities each week — and some even more frequently, according to a 2012 study conducted by NYU's Rudin Center for Transportation. With stations planned at The Cedars neighborhood near Downtown Dallas and the Northwest Mall site in Houston, the train would depart every 30 minutes during peak periods each day and hourly during off-peak periods, according to Texas Central, a Dallas-based company that devised the plan. The train would also make one stop along the route in Grimes County. More: Travis County Judge wants Austin included in planned Houston-Dallas bullet train project According to an estimate from the Reason Foundation, the project is expected to cost at least $33.6 billion. During a House committee hearing this week, Texas Central — the private company behind the high-speed rail project — confirmed that it has bought out its Japanese investors. Company representative Andy Gent stated that Texas Central is now backed by Texas investor John Kleinheinz. The hearing also revealed that the company has secured only about one-quarter of the land needed for the 240-mile rail line, having acquired roughly 1,600 land parcels, including around 500 single-family homes. The bullet train project has been debated for decades, drawing controversy from the start. In 2022, the Texas Supreme Court ruled that Texas Central qualifies as a public interurban electric railway company, granting it the power of eminent domain. This ruling allows the company to acquire private land for construction, including residential properties, farms, and ranches. One Dallas-area farmer told CNBC last year that he struggles to sleep at night, fearing the high-speed rail could cut through his property. Despite the ongoing disputes, Gent attributed project delays to the COVID-19 pandemic. He also stated that Texas Central now needs more time 'to figure out if we can put the bigger transaction together with the Trump administration and the state of Texas.' This article originally appeared on Austin American-Statesman: Will Texas bullet train between Dallas and Houston ever come true?
