My reaction to this was “bad”, but I might be wrong.
President Donald Trump’s administration on Monday terminated a federal grant to help fund a long-sought high-speed rail line between Dallas and Houston — saying that if the embattled project moves forward, it will have to do so without federal help at this stage.
The U.S. Department of Transportation nixed a $63.9 million planning grant for the proposed Texas Central route under an agreement between the Federal Railroad Administration and Amtrak. Transportation Secretary Sean Duffy said the two agencies “are in agreement that underwriting this project is a waste of taxpayer funds and a distraction from Amtrak’s core mission of improving its existing subpar services.”
“The Texas Central Railway project was proposed as a private venture,” Duffy said. “If the private sector believes this project is feasible, they should carry the pre-construction work forward, rather than relying on Amtrak and the American taxpayer to bail them out.”
Kleinheinz Capital Partners, the lead investor in Texas Central, said Monday’s announcement is “good news for the overall project.”
“We agree with Secretary Duffy that this project should be led by the private sector, and we will be proud to take it forward,” the company said in a statement. “This project is shovel-ready and will create significant new jobs and economic growth for Texas as part of President Trump’s efforts to boost the U.S. economy.”
[…]
Texas Central had shown signs of life in recent years when Amtrak revived the project following a leadership exodus.
The company bought its Japanese investors out of the project in January, Andy Jent, a Texas Central representative, told state lawmakers in March. Fort Worth investor John Kleinheinz is now the lead investor in the project, Jent said. Texas Central has acquired about 25% of the parcels needed to build the route, he said.
Peter LeCody, who heads the organization Texas Rail Advocates, was optimistic that the project would move forward despite the lost federal funds.
“Can the private sector do this? Probably,” LeCody said. “Will it need help from any other source? Maybe.”
See here for the previous update. Kleinheinz Capital’s reaction makes me gag – and I have to admit, that’s a new name to me – but whatever. Finance bros gonna finance bro. If this doesn’t derail things – yeah, I said it – then I don’t care if they kiss Trump’s ass. We’ll see if they can live up to their words. The Chron and the Fort Worth Report, which has more on Kleinhenz Capital, have more.
UPDATE: Those Kleinheinz Capital guys sure are sure of themselves.
Texans could ride high-speed rail from Houston to Dallas as soon as 2032.
The new investors behind Texas Central offered that positive outlook to state lawmakers on Thursday, saying the beleaguered bullet train is still viable and shovel-ready even after the Trump administration pulled a $64 million grant this week and cancelled a partnership with Amtrak.
John Kleinheinz, the CEO of Fort-Worth based Kleinheinz Capital Partners that recently assumed a controlling interest in the project, cast the latest developments as a good thing.
“Amtrak has been trying to get control of our deal and it would have been terrible for Texas,” Kleinheinz said in an interview. “ It would’ve been terrible for us because government procurement rules make it so expensive to do a project like this.”
Kleinheinz said he believes the Trump administration is “interested in this deal” if it comes from the private sector.
On Wednesday, U.S. Transportation Secretary Sean Duffy appeared to agree.
“I love high-speed rail,” he told Fox News. “Let’s try to find projects in America where we can build high-speed rail but do it efficiently and bring in the private sector to make those investments, not the taxpayer.”
[…]
Peter LeCody, the president of Texas Rail Advocates, a nonprofit dedicated to developing rail service across the state, said Kleinheinz’s involvement puts “the high-speed rail project back in the game again. They’re down to the 10-yard line.”
The last play of that game, LeCody said, is securing financing for the project — last estimated at $30 billion — and getting final approval from the federal Surface Transportation Board. The project already has completed a full environmental review, required by federal law.
Kleinheinz said he intended to follow in the model of Brightline, a private company that recently launched a high-speed rail line between Miami and Orlando and is pursuing a second project between Los Angeles and Las Vegas. The Florida project was largely funded through private investments.
Texas Central owns about 25% of the right-of-way needed to construct the project. Kleinheinz said eminent domain would be required for only “four or five percent” of the land that still needs to be acquired.
“Seventy percent of this route is underneath high voltage utility lines,” he said. “People don’t live underneath high-voltage utility lines.”
[…]
On Thursday, state Rep. Dennis Paul, a Houston Republican, asked Andy Jent, an investment adviser at the firm, if the project had a schedule. Jent said the company wasn’t ready “to say go,” but when it did, he anticipated six months to finalize planning and secure financing, and another 80 to 86 months — roughly seven years — for construction.
There was a time when this kind of confident talk would have thrilled me. Now, let’s just say I’m a bit more circumspect. Let’s see where they are in that six month time frame for planning and funding.