The U.S. Department of Transportation announced that it is canceling $63,9 million in grant funding for the Texas high-speed rail project, citing unexpected increases in costs and the project's growing reliance on public funds.
Transportation Secretary Sean Duffy said the Dallas-Houston high-speed rail line, initially touted as a private sector initiative, no longer needs to be funded by taxpayer funds. Originally called the Texas Central Railway, the project was intended to connect the two major Texas cities for about 350 kilometers at 390 mph.
It was known that Texas Central had been collaborating with Amtrak since 2016. However, the ministry stated in a statement on April 14 that the project cost exceeded $40 billion and therefore became too risky for federal investment.
It was announced that the $63,9 million in grant funds that were canceled would be directed to other alternative railway development projects across the country. Despite this negative decision, Kleinheinz Capital Partners investor John Kleinheinz continues to believe in the project. Kleinheinz, who bought out the Japanese partners' shares, stated that he has not abandoned his plans to implement Japanese Shinkansen technology in the project.
In a statement to Texas Rail Advocates, Kleinheinz called the grant cancellation “good news,” arguing that the reduced federal involvement would reflect positively on the project. He reiterated his confidence in private sector leadership and said he expects the project to create significant jobs and support economic growth for Texas.
Texas Project Shifts Direction as Amtrak Focuses on Its Own Priorities
Secretary Duffy emphasized that Amtrak must address its own infrastructure issues before supporting external initiatives. He noted that while ridership is improving, Amtrak still faces significant challenges such as delays and equipment failures.
Duffy added that investing public funds in a project that was initially expected to be privately funded was a misuse of taxpayer money. “The private sector should be the ones carrying the financial burden of this project if they believe in its viability,” he said.
Federal Railroad Administration (FRA) General Counsel Kyle Fields acknowledged that connecting Dallas and Houston remains a promising opportunity, but he also acknowledged that the current Texas high-speed rail project proposal is no longer eligible for federal support.
The U.S. Department of Transportation (DOT) has confirmed its continued interest in new passenger rail projects. The department said it plans to continue collaborating with stakeholders on more fiscally sustainable alternatives. This creates uncertainty about the future of the Texas high-speed rail project, while the outcome of private sector efforts to bring the project to life remains to be seen.
