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June 2014
— by Julie Sneider, Associate Editor
While politicians and lawyers continue their high-profile brawl over California's attempt to build a San Francisco-to-Los Angeles bullet train by 2029, a group of Texas business executives — with help from Central Japan Railway (JR Central) — have been developing without much fanfare a plan to open a privately run, Dallas-to-Houston bullet train in just six years.
If the folks behind Texas Central Railway (TCR) succeed, the 200-plus-mph train will transport passengers on the 240-mile trip between the two cities in 90 minutes.
For the past four years, TCR has been researching, planning and preparing its proposal for the project, estimated by local news media to cost about $10 billion. Since passing a project milestone earlier this year — obtaining a memorandum of understanding with the Federal Railroad Administration (FRA) to begin environmental impact studies — TCR officials have been a bit more public about their plans. At the same time, the FRA and Texas Department of Transportation (TxDOT) are collaborating on an environmental impact analysis for a potential high-speed line between Dallas and Fort Worth — with a stop in Arlington — that could complement TCR’s Dallas-to-Houston’s service.
TCR officials insist their project will be a strictly private venture, a strategy they say will enable them to bypass the bureaucracy and complete the project much faster than if it were government funded.
Company execs also believe there’s money to be made in U.S. high-speed rail when service is offered in city-to-city markets that meet certain criteria. And in the Dallas-Houston corridor, TCR executives think they’ve found the right market to invest in what they believe will be a profitable rail service.
When the company's founders started exploring opportunities for a private, "true' high-speed rail service — defined as 200 mph or faster — in the United States in 2009, they determined the Dallas-Houston corridor was the optimal location for quickly deploying a profitable bullet-train. Why? The city-to-city travel distance was ideal for high-speed rail; the flat topography and rural landscape worked well from an engineering and design perspective; and the cities' size and future growth potential seemed picture perfect.
"All the criteria we established really brought home Dallas-Houston as the most desirable, executable and technically feasible location from a private-sector standpoint in all of North America," says TCR Chairman and Chief Executive Officer Richard Lawless. "The economic size of each of the metropolitan areas complements one another."
Both areas are among the United States' fastest-growing metropolitan regions: Today, the population of Dallas/Fort Worth is about 6.6 million people and is projected to increase to 12.6 million by 2035; Houston's population of 6.3 million is expected to reach 12 million by the same year. According to Forbes magazine's top 10 U.S. regions to watch for growth in 2014, Houston ranks No. 4, with GDP growth of 12.3 percent and population gain of 11.5 percent between 2007 to 2012, while Dallas comes in at No. 6, with GDP growth of 9.3 percent and population gain of 10.2 percent. (Also on the list: Austin and San Antonio, which rank first and second, respectively.)
With all that growth, the transportation system in the corridor is congested. By 2035, an automobile trip from Houston to Dallas is expected to take about 6.5 hours.
While the state continues to build new highways to accommodate the influx of automotive traffic, communities also are expanding their transit networks with light- and commuter-rail systems to give commuters a range of options. To some locals, adding a high-speed connection to close the travel-time gap — and alleviate some of the gridlock along Texas’ interstate system — seems to be a logical next step.
"Many countries already have highly developed high-speed rail systems that connect major cities. Now, it's our turn to explore whether we can productively develop a high-speed system," said Houston Mayor Annise Parker at a March 27 press conference, at which she and the mayors of Fort Worth and Dallas announced their endorsement of TCR's high-speed initiative. "Currently, there are more than 50,000 commuters who travel between Houston and Dallas more than once a week. There is your initial ridership base."
TCR officials believe that by working with JR Central, the Dallas-Houston service could offer the kind of fast, high-tech passenger-rail service that's now available in Japan and other parts of the world. JR Central's Tokaido Shinkansen high-speed rail line has been in operation for 47 years, during which time it has maintained a zero-fatality safety record, according to TCR. In Texas, JR Central would bring its energy-efficient N700-I Bullet train system — a fifth generation high-speed technology and one of the quietest trains in the world — to the Dallas-Houston corridor. The line would be entirely grade-separated, with trains designed to reduce noise. TCR expects to run an eight-car train that would carry about 500 passengers. The cost to travel would be about 80 percent of the cost of a commercial air ticket between the two cities.
The TCR team features some well-known players with a mix of public and private- sector experience. President Robert Eckels is a former Texas state lawmaker and former judge of Harris County, Texas. For a decade, he served as chair of the Houston-Galveston Area Transportation Policy Council, and has served on numerous state transportation finance and planning commissions and committees. He also was founding chairman of the Texas High-Speed Rail and Transportation Corp. from 2002 to 2010. CEO Lawless served the U.S. government for more than 20 years, most recently as deputy under secretary of defense for Asian and Pacific security affairs; senior adviser Tom Schieffer is former U.S. ambassador to Japan and Australia, and the former president of the Texas Rangers Baseball Club; and senior adviser Peter Cannito Sr. is former president of MTA Metro-North Railroad and a 40-year veteran of the railroad and transit industries.
In January, U.S. Transportation Secretary Anthony Foxx announced the MOU between TCR, TxDOT and the FRA to begin the environmental impact analysis of potential routes. A notice of intent for the environmental evaluation process could be filed in the Federal Register as soon as this month or next, according to Lawless. At least five corridors will be evaluated to determine the optimal Dallas-to-Houston route, he says.
At the same time he announced the TCR MOU, Foxx also announced a second MOU for a separate preliminary engineering and environmental impact study for a proposed high-speed rail link between Dallas and Fort Worth — with a stop in Arlington — that planners envision connecting with TCR’s service. TxDOT, in partnership with the FRA, is sponsoring the study for the so-called "three-station project." As of mid-May, TxDOT was negotiating a third-party contract for that study, with $15 million in federal funds available to help pay for it, TxDOT spokeswoman Becky Ozuna said in an email. Potential locations for the three-station rail line have not yet been determined, she added.
Eventually, the North Central Texas Council of Governments (NCTCOG) would like to see the creation of a "one-seat" rail service — preferably along the Interstate 30 corridor — that would transport passengers from Fort Worth to Dallas in less than 20 minutes, then on to Houston, says NCTCOG Transportation Director Michael Morris.
"We don't want two different technologies to be built … when there is a chance that a person could get on a train in Fort Worth, go to Dallas and then that train continues to Houston," Morris says.
So while TCR is pursuing its Dallas-to-Houston project, the NCTCOG is planning for the possibility that the two systems could connect, he says.
TxDOT hasn't yet developed a cost estimate or identified a funding source for the three-station project.
"We expect that the line would likely be privately operated, although we have not eliminated public sector options to operate the line. TxDOT would not operate the line," said Ozuna.
When it comes to funding its project, TCR has prepared a plan for private-sector financing, Lawless says, although he declined to cite specific plan details.
"Our goal is to complete the financing at some point when the project progresses a little bit further in the approvals process," he says. "We hope to be in a position where we would be under construction by late 2016 or early 2017, and that would allow us to complete and commission the system in a 2020-2021 period. So the big requirement for financing is going to be during that 2017 to 2020-2021 period."
Despite Texas news media reporting a $10 billion project, TCR hasn't publicly revealed a cost estimate, which according to Lawless won't be known until the environmental studies are completed and a final alignment is identified. However, the company to date has invested "several millions of dollars" to develop the project, he says.
Although the Dallas-to-Houston and three-station high-speed proposals are separate projects under discussion, the various parties involved are keeping each other informed about their progress. Lawless describes the three-station project as "complementary" to TCR's, and the company is committed to connectivity between the two.
Moreover, TCR officials have been in contact with transit agencies in Dallas/Fort Worth and Houston to ensure connectivity between their project and the transit systems. Officials at Dallas Area Rapid Transit (DART) and the Fort Worth Transportation Authority (The T) say they're closely following the high-speed rail discussions; officials at Metropolitan Transit Authority of Harris County in Houston did not respond to a request for comment.
For DART, a high-speed rail stop in Dallas would influence where the transit agency locates its second downtown Dallas rail alignment, says Steve Salin, DART's vice president of rail planning.
"The potential location of high-speed rail is a significant issue for us," he says. "We need to have our project done relatively soon so that we can continue to sustain our capacity and operational needs in the near- and long-term future. … But, we're not making a whole lot of substantial progress [on the second alignment] until we know more about their project."
DART officials hope to sync their downtown Dallas alignment with the high-speed rail connection "so that all these things can interface for a true, multi-modal complex in the downtown area," Salin adds.
Meanwhile, discussions over a possible high-speed rail connection in Fort Worth are proving to be "very timely" for The T, which is about to begin work on a new, five-year master plan, says President Paul Ballard.
"We assume that if [high-speed rail] is going to serve Fort Worth, it will serve the central business district or very close to it," he says. "We'll take that into consideration as we develop our master plan."
Ballard believes the Dallas/Fort Worth/Houston corridor is an ideal location for high-speed rail service. But the TCR project does have its skeptics, who argue such a project will never happen. As proof, they cite the failed attempt by a group of investors to build a Dallas-to-Houston bullet-train in the early 1990s. Known as Texas T.G.V., the group wanted eventually to extend high-speed service to Austin and San Antonio. Observers of the earlier effort say it was scuttled in part by Dallas-based Southwest Airlines, which lobbied against the project.
But TCR officials say times have changed. For one thing, Southwest Airlines' targeted market for passengers is much broader today and therefore less reliant on Texas’ city-to-city commuters. Second, the economic factors at play in Texas now speak even more to the need for a Dallas-Houston bullet train.
"High-speed rail made sense back then, it just didn't make as much sense as it does now," says Lawless. "You've had incredible economic growth in Texas, and all the indicators that drove that project 20 years ago more than drive it now. I don't think it was a bad idea then; I think it is a great idea now."
If TCR is successful in its Dallas-to-Houston endeavor, the project could help spark similar projects in other U.S. cities, says Andy Kunz, president and chief executive officer of the U.S. High Speed Rail Association. Community leaders in other locations will see the economic developments that typically evolve around passenger-rail stations and will want in on that business, he adds.
"Our government keeps sitting on its hands and making excuses for not investing in high-speed rail. If the private sector is stepping up to do it, that's great," Kunz says. "America needs high-speed rail. That's the bottom line."
Is TCR/JR Central interested in similar pursuits in other U.S. locations?
"That's beyond our ambition right now. We’re really focused on this [Dallas-Houston] project," says Lawless. "But I will say this: Assuming our project is successful on the Dallas-Houston corridor, and we can demonstrate that real high-speed rail can be a commercial, financial and technical success with the quality of customer experience that exists in other countries, we won’t be building the next true high-speed railroad in the United States, somebody else will."
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