The Power of the Private Sector - Texas Scorecard

Another push for a high-speed train across Texas may soon be in the works, but it’s unlike your typical billion-dollar boondoggle proposal. This rail-line would be completely constructed and operated by a private company – without the use of tax dollars.

It almost sounds too good to be true.

Texas Central High-Speed Railway, a private company, is looking to have a high-speed rail-line operating between Dallas/Ft. Worth and Houston by as early at 2020 – and they don’t plan to use any state or federal money to subsidize the project.

As Robert Eckels, the company president told the Texas Tribune:

If we start taking the federal money, it takes twice as long, costs twice as much… My guess is we’d end up pulling the plug on it [if costs are greater than expected].

Obviously time will tell if Mr. Eckels and his company will attempt to keep taxpayers out of the development process. Keeping the government out of it will be the key to ensuring such a project doesn’t turn into a California-sized train-wreck (pardon the pun).

But assuming for the moment this investment does remain completely private, they still have an up-hill climb to achieve success.

Edwards L. Glaeser, a professor of economics at Harvard University, found that a high-speed rail from Houston to the Metroplex would likely end up running about $500 million in the red each year. Of course, his research focused on analyzing a tax-funded bullet train.

If the Texas Central High-Speed Railway is able to turn a profit, then more power to them. Such a capital-intensive investment is highly risky, but if they can make it work without tax dollars, they deserve the rewards that come with it.