Why you should care
A new model to finance high-speed train projects is drawing bipartisan support.
When California Gov. Gavin Newsom announced in February that the state was putting on hold plans for a high-speed rail system between Los Angeles and San Francisco, it seemed like the latest nail in the coffin for superfast trains in America. The country’s fastest train, Amtrak’s Acela Express, reaches 150 mph, well below the 160-mph mark at which trains are considered high-speed in Europe, Japan and China. But a project in Texas is offering an alternative model that’s at the heart of a quiet revival of high-speed rail plans.
The Texas Central Railway, a private firm, could as soon as later this year break ground on the nation’s first high-speed train, connecting Houston to Dallas — a route with similar population density to the Los Angeles–San Francisco corridor. The train, with a speed expected to top 200 mph, will cut travel time between the two cities to under 90 minutes, compared to the three-and-a-half-hour drive required today. What’s making supporters optimistic about success is that, unlike past efforts, the project is financed entirely by investors employing a market-led approach to infrastructure construction. No state or federal grants are involved.
That approach is inspiring other projects too. Last September, Virgin Trains announced the ownership of a federally approved rail corridor called “XpressWest” between Los Angeles and Las Vegas, where it plans to develop America’s second high-speed train line, Ben Porritt, the firm’s senior vice president for corporate affairs confirmed. The company is also actively exploring a dozen other routes across the nation, including St. Louis to Chicago and Charlotte, North Carolina, to Atlanta, contingent on the success of its upcoming project.
Because of the current political dynamic, we are in a sweet spot.
Holly Reed, managing director, Texas Central Railway
The model is catching on beyond what is strictly considered high-speed trains. Earlier this year, the Brightline, backed by Fortress Investment Group, launched between Miami and West Palm Beach in Florida, reducing a two-hour journey down to just one hour. The route will get an extension to Orlando and possibly to Tampa. While its maximum speed of 125 mph is below the 160 mph mark for high-speed trains, the Florida route is still the second fastest in the U.S. alongside three other lines in the Northeast.
This private funding strategy is attractive to fiscal conservatives who consistently advocate for less government intervention. At the same time, it’s appealing to liberals arguing for environmentally friendly transportation options. High-speed trains are a key component of the Green New Deal authored by New York Congresswoman Alexandria Ocasio-Cortez and her colleagues.
“High-speed train will be the best solution to meet the demands between these two cities,” says Holly Reed, managing director of external affairs for Texas Central Railway, speaking of the Houston-Dallas route. “Because of the current political dynamic, we are in a sweet spot to set the bar for what high-speed rail will look like in the United States for decades to come.”
To Noah Sayres, owner of the cannabis tech startup BudBuddy who often travels between Los Angeles and San Francisco, Newsom’s February announcement is illustrative of broader problems with California’s approach. With public-funded projects, every tiny town in the middle of a route like Los Angeles-San Francisco is able to lobby for a stop, hoping to generate economic activity for its residents. That, he says, makes the route “absurdly inefficient, to the point where it would take almost as long to drive as it would to take the train.” There’s also the question of public spending priorities — Newsom said the $77 billion line between Los Angeles and San Francisco would “cost too much” and “take too long.” It was estimated to be ready only by 2033, 13 years behind schedule. For now, California is continuing with the construction of a smaller 119 mile Merced-Fresno-Bakersfield stretch, says Melissa Figueroa, deputy secretary for communications and strategic planning at the California State Transportation Agency. The state, she says, is still trying to secure additional funding and clearances to support the entire 520 mile Los Angeles-San Francisco stretch.
The private firms leading the fresh charge on high-speed rails have learned from California. The Texas project, for instance, will include just one stop between Houston and Dallas, and will use Japan’s latest technology, the N700-I high-speed train system that runs between Tokyo and Osaka. The entire system will cost $12 billion and will connect at both ends with local train networks.
All previous high-speed rail projects in the U.S. have been led by government entities or public-private partnerships. This includes the Texas High-Speed Rail Authority, created by the state legislature in the 1990s to set up a system called the Texas TGV, which collapsed after failing to meet a financial deadline under pressure from both public and private entities. Conservative leaders ultimately prioritized roads over rail.
Nationally some Republicans continue to rally against high-speed rail projects. Florida Sen. Rick Scott has accused the Green New Deal’s focus on transportation alternatives as “working toward ending air travel” — a charge the deal’s proponents reject. As governor in 2010, Scott had rejected $2.4 billion in federal stimulus, shattering the hopes of connecting Miami, Orlando and Tampa via high-speed rail. Some private players developing these high-speed rail projects have also faced challenges. Virgin Trains was in 2018 rated the U.K.’s worst rail operator after recording more cancellations and serious delays than any other competitor. And Brightline’s inability to go faster than 125 mph in Florida points to the challenges of unleashing high-speed trains on infrastructure-dense routes: a factor that has also limited speeds in the northeast.
But the private model is drawing levels of bipartisan support previous high-speed rail projects couldn’t attract. In April, a bipartisan group of 10 members of Congress from Texas wrote letters of support for the state’s project to the U.S. Surface Transportation Board. The liberal municipal governments of Houston and Dallas have backed the initiative. Such trains can also prove remarkably energy-efficient. The Texas train will expend one-twelfth of the carbon dioxide as a Boeing 777-200 — while carrying roughly the same number of passengers. And “along with the benefits to the environment, you’d get to look at the countryside, which should appeal to any Texas patriot,” says environmentalist Bill McKibben, founder of environmental advocacy group 350.org.
Some airliners have long seen high-speed rail projects as potential partners rather than adversaries, say industry players. Both Continental Airlines — before its merger with United — and American Airlines were members of the Texas High-Speed Rail and Transportation Corp., a nonprofit that later morphed into Texas Central Railway. According to Jay Crossley, executive director of Farm & City, a sustainable development nonprofit, Continental hosted the first-ever meeting for the Texas project at its downtown Houston headquarters in the mid-2000s. Crossley, who attended the meeting, says the airline was exploring code-share relationships. “Today you can buy a ticket on Air France that takes you to Paris and then a high-speed rail train to wherever you’re going — and the airlines … would be happy to be in that business,” says Crossley. A code-share would allow the airline to earn revenue from ticket sales while freeing up gate space and aircraft for long-haul routes that make them more money. On the Dallas-Houston route, for instance, 90 percent of the 16 million annual trips are by road, not by plane.
This potential of the privately funded model to serve as a win-win option for high-speed rail networks in America is something Virgin Trains nodded to in February. The railroad company stepped back from a planned $538 million initial public offering, instead finding alternative private funding.
If this model of privately funded high-speed rail projects succeeds, it could set a template for other infrastructure projects trapped in wrangling over funding between liberals and conservatives. It could also show what bipartisan politics can really look like outside of the Beltway.