Op-Ed: Texans should be wary of bullet train proposal

This opinion piece was written by Alain Leray, president and CEO of SNCF America Inc., which is France's national state-owned railway company. Read HBJ's latest coverage of the bullet train here.

Mar 22, 2018

By Alain Leray – Guest Contributor

As the proposal to build a high-speed rail line between Dallas and Houston makes its way through a federal regulatory approval process, Texans are asking important questions about its viability and impacts.

Although intriguing, Texas Central Rail’s proposal presents risks Texans should not underestimate because the TCR project has been designed around the best interest of a single company, not what is best for Texans or its rail transportation future.

The implications of TCR’s proposal are profound. In fact, as the Federal Railroad Administration evaluates the project, the very future of Texas passenger rail hangs in the balance. Here’s why:

TCR’s proposal is fundamentally flawed. Modern passenger rail services can only be successful if they are conceived and planned as networks. By focusing on a single Dallas-Houston line, rather than take a network approach that includes the I-35 corridor, serving multiple cities and far more riders, TCR is betting ridership along the I-45 corridor alone will be robust enough to operate at a profit. TCR is likely to lose this bet, especially since the line will not serve city centers, leaving others to pick up the tab.

Ridership from multiple cities is necessary for rail service to stand a chance of operating profitably, and ridership along the I-45 corridor is unlikely to keep pace with the debt service required for infrastructure built at $45 million per mile. This misstep would make it impossible to justify the construction of a similar line serving the I-35 corridor, leaving the cities of Waco, Temple, Georgetown, Austin, San Marcos and San Antonio without future rail options. TCR’s interest in serving only Dallas and Houston should not dictate the passenger rail futures of other cities.

In addition, TCR’s Dallas-Houston project could represent an enormous financial burden on taxpayers. Although TCR purports to use only private funds for route construction — while considering federally guaranteed loans and receiving capital infusions from a government-owned Japanese bank — nowhere in the world has high-speed rail been built without taxpayers shouldering at least 60 percent of the cost, and no country in the world operates a fully privately-funded high-speed rail infrastructure. The concept of private financing, while seductive, is virtually impossible because ridership is highly unlikely to cover debt payments on exorbitant infrastructure costs. This unreliable financing model will likely require a financial bailout.

Finally, while the Japanese Shinkansen train proposed by TCR is safe and reliable, its technology is incompatible with standards used in the U.S., the U.K. and the EU. Therefore, once the TCR line is constructed, Texas will be shutting its doors to competition and allowing the future of Texas high-speed rail to depend entirely on Japanese monopoly technology.

TCR should be given credit for recognizing the potential for passenger rail in Texas, as well as for developing a bold and enterprising project, but the entire state’s passenger rail future should not be dictated by monopoly technology, unproven private financing assumptions, and a two-city, exclusive route. Texans should be wary.

Alain Leray is president and CEO of SNCF America Inc., which is incorporated in Delaware and a division of SNCF, which is France's national state-owned railway company.

https://www.bizjournals.com/houston/news/2018/03/22/op-ed-texans-should-be-wary-of-bullet-train.html