Trump administration pulls grant for Texas high-speed rail

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DALLAS — President Donald Trump’s administration on Monday terminated a federal grant to help fund a long-sought high-speed rail line between Dallas and Houston — saying that if the embattled project moves forward, it will have to do so without federal help at this stage.

The U.S. Department of Transportation nixed a $63.9 million planning grant for the proposed Texas Central route under an agreement between the Federal Railroad Administration and Amtrak. Transportation Secretary Sean Duffy said the two agencies “are in agreement that underwriting this project is a waste of taxpayer funds and a distraction from Amtrak’s core mission of improving its existing subpar services.”

“The Texas Central Railway project was proposed as a private venture,” Duffy said. “If the private sector believes this project is feasible, they should carry the pre-construction work forward, rather than relying on Amtrak and the American taxpayer to bail them out.”

Kleinheinz Capital Partners, the lead investor in Texas Central, said Monday’s announcement is “good news for the overall project.”

“We agree with Secretary Duffy that this project should be led by the private sector, and we will be proud to take it forward,” the company said in a statement. “This project is shovel-ready and will create significant new jobs and economic growth for Texas as part of President Trump’s efforts to boost the U.S. economy.”

The Texas Central project — first pitched in 2009 as a way to ferry travelers between the state’s two largest urban areas within 90 minutes — has long faced stiff resistance from landowners along the route and state lawmakers who have sought to kill the project.

Texas legislators have filed bills aimed at thwarting the rail line. Meanwhile, the Texas House Transportation Committee subpoenaed Texas Central representatives for information about the company’s finances among other matters — and are set to hear from the company on Thursday.

The project has struggled to obtain the land necessary to build the line as the estimated cost ballooned past $30 billion from an earlier $12 billion estimate. The U.S. Department of Transportation on Monday put that cost north of $40 billion.

Texas Central had shown signs of life in recent years when Amtrak revived the project following a leadership exodus.

The company bought its Japanese investors out of the project in January, Andy Jent, a Texas Central representative, told state lawmakers in March. Fort Worth investor John Kleinheinz is now the lead investor in the project, Jent said. Texas Central has acquired about 25% of the parcels needed to build the route, he said.

Peter LeCody, who heads the organization Texas Rail Advocates, was optimistic that the project would move forward despite the lost federal funds.

“Can the private sector do this? Probably,” LeCody said. “Will it need help from any other source? Maybe.”

Disclosure: Texas Central has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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