A few weeks ago, the Antiplanner reviewed the proposed Texas Central high-speed rail line between Dallas and Houston and concluded it was not viable. Last week, the Reason Foundation released a much-more detailed review that reaches the same conclusion.
Reason’s report notes that Texas Central officials claim they won’t need any subsidies, but still plan to ask the federal government for government-guaranteed low-interest loans. While Reason joins with the Antiplanner in supporting private rail projects, the desire for government-backed loans, says Reason, makes it “critical to assess the viability of this project.”
Reason’s assessment concludes that Texas Central officials have overestimated ridership and underestimated costs. As a result, ticket revenues are likely to fall almost $100 million per year short of operations & maintenance costs. Of course, that means there would be nothing left over to repay the government-guaranteed loans, so lenders would be out about $18 billion. That’s based on a construction cost of at least $20 million per mile based on the fact that the only high-speed rail lines that have been built for less had cheap or free right of way. Since the line in Texas would go over mostly private land, the right of way isn’t likely to be cheap.
As it happens, the Antiplanner’s post was republished by the Houston Chronicle. In response, a member of Texas Central’s board of directors, Drayton McLane, wrote a fawning review of the project that the Chronicle also published.
McLane looks forward to the day when Dallas residents will be able to take a high-speed train to a Super Bowl the next time it happens to be in Houston. Never mind that the stadium is at least eight miles from where the train station is likely to be located. Never mind that one train full of people would only fill about one-tenth of one percent of the stadium, so it would take five hours to fill just 10 percent of the seats. Never mind that the last time they tried to use trains to get people to a super bowl, it was a disaster. Like so many rail advocates, McLane sees the train as something that would be convenient for him, so everyone else should take the company’s claims at face value.
Texas Central is backed by JR Central, one of the seven major railroads in Japan that came out of the 1987 breakup of the Japanese National Railways (JNR). That breakup took place because JNR had accumulated $350 billion in debts from trying to build high-speed rail throughout Japan. One of those lines built in 1964 was profitable, but most of the rest lost a lot of money.
The one profitable line connected three very densely populated urban areas housing about 30 million people in a country that, at the time, relied on rail for more than 70 percent of passenger travel. Thus, it succeeded by attracting people from low-speed trains onto high-speed trains. While that first high-speed rail line made money, it put the low-speed trains into the red, and construction of additional high-speed lines put both high- and low-speed lines in the red.
Dallas-Houston does not resemble 1964 Japan in any way. The two urban areas together have about 11 million people, a lot by American standards but not much compared with Tokyo-Osaka. Dallas & Houston densities are so low that far more people will be within easy reach of commercial airports than train stations. And right now the number of people taking low-speed trains between Dallas and Houston is precisely zero, so there is no pent-up market of train riders wanting faster trains.
JR Central is backing this project because it is eager to sell Japanese rail technology to the United States. But to sell it, it has to find a buyer. I doubt that anyone in Texas is interested putting up $18 billion towards this project, and taxpayers shouldn’t be expected to do so.