The case against high-speed rail in Texas

Photo by Norihiro Kataoka

In 1991, the Texas High-Speed Rail Authority awarded a 50-year rail franchise to the Texas TGV Corporation, an international consortium, to build a high-speed rail network connecting the “Texas Triangle” — Dallas/Fort Worth, Austin/San Antonio and Houston.

But because of opposition from landowners, local communities and airlines — plus challenges raising private capital — the proposal went nowhere.

Once again, high-speed rail is being championed by a private, for-profit company. This time it’s Texas Central Railway, which wants to build a bullet train connecting Dallas and Houston in 90 minutes. But this proposal, too, will not come to pass because the economics simply don’t work.

Texas Central Railway claims that the 240-mile project will satisfy a latent demand among business travelers for fast, convenient passenger service between the two metropolitan regions that will be competitive with air travel. The company says the alignment will be “designed with station locations driven by consumer demand,” but I doubt the railway has done extensive surveys to determine either the number of people who really want to travel by train between downtown Dallas and downtown Houston or where the specific stations should be located. Indeed, the company’s website includes a disclaimer that reads, “All claims and descriptions of the high-speed rail system’s operations … are solely suggestions of potentiality based on examples from other high-speed rail around the world and for promotional purposes only.”

Here’s the problem: Other high-speed rail systems are irrelevant. It’s true that the distance between Dallas and Houston is about the same as the distance between New York City and Washington, D.C., which are connected by Amtrak's high-speed Acela Express. But about 40 million people live between New York and D.C., and the Acela generates revenue by picking up and dropping off passengers in several sizable cities along the way, like Newark, Philadelphia and Baltimore.

About 6.5 million people live in the Dallas-Fort Worth area, and roughly the same number live in greater Houston. But few live in between, which would limit the amount of fare revenue that could be produced. What’s more, whereas each of the East Coast cities served by the Acela has a defined urban core with good public transit options connecting the city center to suburban business nodes, this is not the case in Dallas or Houston. Put differently: How many business people actually want to go from downtown Dallas to downtown Houston? In either direction, this would probably mean a commute by car to the train station, parking, riding the train and then renting another car at the other end of the journey.

And what about the cost? One-way fares on the Acela between Washington and New York range from about $150 to over $300. With a little planning, a one-way ticket between Dallas and Houston on Southwest Airlines can cost about as little as $80, or less than $30 on Megabus. What’s more, the Acela isn’t a “bullet train” like the one being proposed by Texas Central Railway: Its travel time between D.C. and New York is 2 hours, 45 minutes, and it’s often late. There may be a handful of business travelers willing to pay more than $600 for a day trip by rail to Houston or Dallas, but surely not enough to cover the system’s fixed and operational costs.

Though the proponents of the high-speed corridor between Dallas and Houston claim it will be financed and operated privately, it’s hard to imagine a system that doesn’t receive huge federal grants plus direct and indirect subsidies from the state of Texas. And in today’s tight fiscal environment, those are hard to come by. The plan may also require donations of rights-of-way, various state subsidies and local tax abatements.

I’ve ridden the bullet trains in Japan and France. They’re really neat, and they’re also state-owned and receive huge government subsidies. But this is Texas, not Japan or France.

Bernard L. Weinstein

Associate director of SMU's Maguire Energy Institute

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