U.S. Department of Transportation Secretary Sean Duffy announced an agreement between the Federal Railroad Administration and Amtrak to terminate the $63.9 million grant awarded to Amtrak under the Corridor Identification and Development Program for the Amtrak Texas High-Speed Rail Corridor, previously known as the Texas Central Railway project.
This project was originally announced as a purely private venture. However, as the cost estimates dramatically ballooned, the Texas Central Railway proposal became dependent on Amtrak and federal dollars for development work.
The project capital cost is now believed to be over $40 billion.
While Amtrak ridership has recovered since the pandemic, it has struggled with significant operating deficits. In addition, Amtrak has had high-profile operational challenges, including delays on its own Northeast Corridor and the loss of its Horizon coach fleet to corrosion. Fixing these issues is a top priority for FRA.
Additionally, under the previous administration, Amtrak considered massive loans underwritten by the federal government, along with additional grants, the only way to spur construction activities. This arrangement is the antithesis of generating private investment in infrastructure because the American taxpayer ends up holding all the risk. Walking away from the Texas Central Railway project at this time will allow Amtrak to focus on necessary improvements to deliver more reliability to its current riders.
Federal officials said the announcement does not represent the end of FRA’s interest in new rail projects.
FRA has programs that can help develop new rail corridors, including high-speed rail routes, and will continue to work with stakeholders to develop cost-effective opportunities. FRA will be able to reallocate the roughly $60 million balance from the termination of this CID Program grant to other projects that support safe, efficient, and reliable rail transportation.
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