If Texas Central Railway is not a railroad, then what is it?
February 15th, 2019
February 15, 2019 - Guest Column - Robert Leilich -
I am tired of seeing a vocal minority of people opposing high speed spend sizeable legal fees in an attempt to support exaggerated claims that it will destroy the bucolic setting of rural Texas, cut off property access, and create a noise and visual nuisance. A far larger (all too silent) majority support high speed rail.
If Texas Central Railway is not a railroad, then what is it? Does it need to lay a mile of track, buy a self-propelled passenger car and offer round trips for $1 to prove that it is a railroad? How many of these opponents have ever ridden a high speed train?
The unsupported claims that it will go bankrupt and put taxpayers on the hook is pure smoke. First,Senate Bill 977, passed in May 2017, prevents Texas from getting financially involved in any way with high speed rail. Second, one of Texas Central’s VP’s personally assured me that no Public Private Partnership is or will be involved. Third, Texas Central does not qualify for loans under the Railroad Rehabilitation and Investment Financing program since it will not meet Buy America requirements.
To my knowledge, the only loan program under which Texas Central might qualify is under the Transportation Infrastructure Finance and Innovation Act. In this case, the government may requires a borrower to pay a credit risk premium (insurance) in connection with any loan. It also may require that loans may not exceed the asset’s net salvage value. In short, I see no risk to either the state or Federal taxpayers, compared to the net government loss of $10.2 billion to salvage GM, GMAC, and Chrysler in 2011 – 2013.
If Texas Central were to go bankrupt it is true that it will be because of debt service (its largest expense). It would be private debtors and investors who are the losers. Then, other private money will pick up the pieces with a greatly lower investment and a much higher probability of making money. One only has to look at past airline bankruptcies to see how the private capital markets work.
Dayton McLane’s rebuttal of Jay Wall’s negative outlook on Texas Central is far more insightful and meaningful. Reducing injuries, deaths, and property damage on travels between Houston and Dallas will actually save money to Texas taxpayers which picks up many of the costs of the uninsured or under insured. Further. Texas Central property taxes will add millions to the State coffers each year. Texas Central will inspire induced travel between the two cities as people, like myself, will make many more trips between the two cities where driving is a dreadful experience and flying simply is not enjoyable. Where, again, is the loss to the taxpayers?
Robert Leilich
The Woodlands, TX 77380
I am tired of seeing a vocal minority of people opposing high speed spend sizeable legal fees in an attempt to support exaggerated claims that it will destroy the bucolic setting of rural Texas, cut off property access, and create a noise and visual nuisance. A far larger (all too silent) majority support high speed rail.
If Texas Central Railway is not a railroad, then what is it? Does it need to lay a mile of track, buy a self-propelled passenger car and offer round trips for $1 to prove that it is a railroad? How many of these opponents have ever ridden a high speed train?
The unsupported claims that it will go bankrupt and put taxpayers on the hook is pure smoke. First,Senate Bill 977, passed in May 2017, prevents Texas from getting financially involved in any way with high speed rail. Second, one of Texas Central’s VP’s personally assured me that no Public Private Partnership is or will be involved. Third, Texas Central does not qualify for loans under the Railroad Rehabilitation and Investment Financing program since it will not meet Buy America requirements.
To my knowledge, the only loan program under which Texas Central might qualify is under the Transportation Infrastructure Finance and Innovation Act. In this case, the government may requires a borrower to pay a credit risk premium (insurance) in connection with any loan. It also may require that loans may not exceed the asset’s net salvage value. In short, I see no risk to either the state or Federal taxpayers, compared to the net government loss of $10.2 billion to salvage GM, GMAC, and Chrysler in 2011 – 2013.
If Texas Central were to go bankrupt it is true that it will be because of debt service (its largest expense). It would be private debtors and investors who are the losers. Then, other private money will pick up the pieces with a greatly lower investment and a much higher probability of making money. One only has to look at past airline bankruptcies to see how the private capital markets work.
Dayton McLane’s rebuttal of Jay Wall’s negative outlook on Texas Central is far more insightful and meaningful. Reducing injuries, deaths, and property damage on travels between Houston and Dallas will actually save money to Texas taxpayers which picks up many of the costs of the uninsured or under insured. Further. Texas Central property taxes will add millions to the State coffers each year. Texas Central will inspire induced travel between the two cities as people, like myself, will make many more trips between the two cities where driving is a dreadful experience and flying simply is not enjoyable. Where, again, is the loss to the taxpayers?
Robert Leilich
The Woodlands, TX 77380