A commenter asked for my opinion on the Texas Central Railway proposal for high-speed rail, and the various challenges facing it. Thought it merited its own post. So, my thoughts.
My first feeling is skepticism. High speed rail pairs extremely low operating costs with extremely high up-front capital costs. Debt service thus becomes a huge determinant in whether or not a line can “break even.” A few basis points can make or break the entire system.
Privately-financed HSR infrastructure ends up costing a lot more because private borrowing costs are so much higher. True, a private system may see lower construction costs, by being exempted from federal contracting and prevailing wage requirements. But in a right-to-work state like Texas, the prevailing wage isn’t all that steep to begin with. And even states with a history of iffy finances (e.g., California) can issue bonds cheaper than most companies.
Even a system with good ridership can thus operate “in the red” if the banks are extracting too large of a cut. This happened in Taiwan. Three years after their HSR system opened, they were bleeding money in interest payments, and had to be refinanced with a new set of loans backstopped by the Bank of Taiwan.
There is a workaround – namely, the RRIF. RRIF lets private railroad entities get loans for whatever the going rate is on T-bills, thus avoiding a Taiwan scenario. As you might imagine, the Republican and Libertarian establishments hate this program. For instance, here’s Reason coming out against the Los Angeles-Las Vegas line, and here’s Heritage echoing the sentiment.
So my thoughts are, given that the exact same people who would oppose a publicly-financed and owned rail system are going to be just as opposed to a privately-financed and owned rail system with government loans, why not just go for the full enchilada? Build it with public funds and then let JR or First or Veolia contract out to run the trains.
Having expressed skepticism of the financing model, my second reaction is excitement. I’m a partisan. I want to see 700-series Shinkansen in Texas. The reason is loading gauge. Off-the-shelf Euro trainsets are built to Berne Gauge, which is a bit over 10′. Existing North American trainsets are built to Plate C, which is a bit wider. But Shinkansen uses its own loading gauge, explicitly designed for HSR.
So while the ICE-3 is 9’8″, Amfleet is 10’6″, and the “international” Velaro D is 10’8″, the N700 clocks in at 11’1″. Do you shop at Casual Male? Do you drive an SUV? This is the train for you. Of course, the Japan/Taiwan spec has 5-across seating in economy class. But I have to imagine that no US operator would be stupid enough to bring that here. And indeed, Texas Central’s website shows four-across “green car” seating. An all-Green Car Shinkansen would really be quite something.
Moreover, when it comes to the route structure, my attitude is one of endorsement. Texas Central proposes to put one station in downtown Dallas and one station on the northern outskirts of Houston. This makes sense when you consider demographics and airport location.
On the demographic side, HSR ridership skews toward a higher-income, service-sector crowd. Dallas’s office sprawl heads northward, which tends to funnel the Plano-Frisco-Galleria folk through downtown. By contrast, Houston’s office sprawl goes west, and Dallas-bound traffic utilizes any of several ring roads before finally coalescing somewhere in The Woodlands. This supports a Downtown Dallas station and a North Houston station.
On the airport side, Houstonians have to drive a ways out to reach the aeropuerto, regardless of what flight they’re taking. But Dallas folks have Love Field, which is just a couple miles from Downtown. An outer Houston rail station is thus competitive with air travel in a way that an outer Dallas one wouldn’t be.
As for the issue of stations in Fort Worth and DFW, my tone is one of exasperation. Direct DFW service is a great idea, but there is simply no cheap way to do it. You’re either tunneling under the runways (mega expensive) or extending the APM to Centreport. And since Skylink operates within the secure area, you’d need to construct a satellite terminal for check-in and baggage handling.
Personally, I’d go for a tunnel. It works at Narita, it works at CDG. But that’s some major capital outlay and it seems crazy to me to hang the success or failure of a Houston-Dallas train line on service to the airport. It also doesn’t escape my attention that, assuming the system is ultimately expanded to include the rest of the triangle and beyond, a direct DFW connection tends to advantage airlines with a DFW hub (e.g., AA) at the expense of those using IAH or Love (United, Southwest).
In summary, then, my short take on it is this: I hope they pull it off.