An urban-rural divide has developed over a private bullet-train project that would serve Dallas and Houston. Do you support or oppose this venture, and why?
Admittedly, I have not fully reviewed Texas Central Partners, LLC ventures plan for this bullet train, so ultimately my support or opposition to this plan will largely depend on a thorough evaluation of the project. However, I do think that as much as the private sector interests of this venture are pushing the independence of such a venture and a “no cost to the public” narrative, I find this argument highly suspect for a project of this scale. So in business, we hear terms like “win-win”, or we are provided with what we call “hockey stick” projections. These are projections that show flat profits in initial years and straight climbing projections in out years. All of these sentiments are usually presented on private projects, everything is blue skies, no downside risks. So the best way I can describe my evaluation of this project will be to present to you some baseline questions that I would like answered. The hope is that you will see, despite the claim that this is a “win-win” private sector project; the public sector’s responsibility for a project of this scale is to evaluate the impacts on the public sector, if for no other reason but to create avenues for the public sector to collect taxes or fees from the project to cover added costs on the public sector.
Some of my questions would be as follows: What are the optimistic and pessimistic ridership projections for the company? What is the specific breakdown of sources of funds specifically from public and private sources? What is the anticipated use of funds from the Transportation Infrastructure Finance and Innovation Act and Railroad Rehabilitation and Improvement Financing programs? What form will those funds take, debt or something else? What is the blended cost of capital for the funds to be used for the construction of the project, and over what term? What is the capacity for the line as well as the break-even level of ridership needed for the project to be viable? If the ridership does not meet the minimum expectations, what will the private entity do to increase ridership to make the project viable? If such a situation occurs, what private assets will be used as collateral to backstop any non-payment of public funds? If the project remains unviable, does the private company have funds in escrow to cover the liquidation of assets? What will be the impact to budgets of regional airports that currently serve the market? If airport traffic is reduced, what will be the impact to current sources of revenue to current airport facilities: parking fees, landing charges, hangar charges, passenger service charges, security charges, noise-related charges, emissions-related aircraft charges? Are these charges currently scaled properly, such that their reduction reflects an actual reduction in airport operational costs? What are the results of traffic studies for the areas where the train stations will be located? Will these projects require additional public infrastructure to area roads, bridges, access points? If so, how will these projects be funded? Will the funding source dictate which entity will have jurisdiction over the procurement process for these projects? Which entity will be responsible for the maintenance of these projects? Who will provide security for the entire line, as well as for the stations? If authority of the line falls under the Federal Railroad Administration, will that mean that the Transportation Security Administration will have ultimate control over the security of the line and stations? What are the threats from competing technologies such as self-driving automobiles which will be placed into production in the next three years? Will these technologies allow for the use of existing infrastructure and increase transportation speeds and capacity, while at the same time eliminating the need for station hubs? Do these competing technologies provide more flexibility, in that “line” stops can be expanded well beyond three stations? What is the statutory ability of the organization to acquire property? If eminent domain is available, will the organization have a legal fund available to defend the federal or state suits should they be named defendants? What are the environmental costs? Given the fact this is a bullet train that requires the assistance of government entities (eminent domain) to secure the land and we cannot provide for competition in this venture, will the private ventures accept a cap or ceiling on annual return or return on investment? Has the State evaluated anti-competitive business practice law in relation to this project and does it have a plan to regulate or overtake the venture should it be necessary? If that is a possibility, does the State have the responsibility to consider passenger pricing of the venture in terms of evaluating its long-term viability?