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Texas Central in trouble with Financing?

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Texas Central in trouble with Financing?
Posted by CMStPnP on Monday, October 4, 2021 11:46 PM

It has always bothered me why this company is so vague and secretive about it's financing package.    Recently a competing publication to Trains asked the CEO of Texas Central about when it would break ground.    His answer was 50-50 before the end of the year and he even felt that was an aggressive outlook.    When pushed for details he stated a lot depends on the Infrastructure Act before Congress and what is in it when it passes.     Turns out they are going to seek massive U.S. Government loans to help fund this project.     Other tidbits that came out as part of that interview are cause for concern.

1. Total cost of the project is now estimated to be $24 Billion, this is up from the $18 Billion that was floated earlier in the project and the initial $15 Billion when the project first was announced.     Not sure what is driving this price escalation.

2. Revealed that only approx 40% of the land needed has been acquired.   Again stated they are waiting on financing to conclude prices with people who are going to voluntarily give up land or be forced to do so via eminnent domain.     So not really 100% construction ready until you have all the route in place, IMO.

3. Revealed emphasis would be given on the first 20 miles from Dallas to a point 20 Miles south for testing.    What does that mean exactly?    Only a 20 mile test section will be initially built vs the whole route?    Rather a strange comment in my view to make publicly.

4. Revealed they are working on translating the verbal or written finance commitments made by other third parties into reality or cash in the bank.    Why would they or should they be having issues here this late in the game?

All rather strange in my view and to me points to the project being anything approaching a done deal yet and certainly still could fall apart.    They initially told  Texans this would be a 100% Privately run and financed operation so I am not sure how they can now say they are seeking government money in such a large sum.   We will see.    I would be curious if the money they seek is in direct competition with what Amtrak seeks or is a seperate pot.    Too vague for me to tell so far.

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Posted by BaltACD on Tuesday, October 5, 2021 9:59 PM

Follow the money - or the bribery.  I have no idea which is in play.

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Posted by BEAUSABRE on Tuesday, October 5, 2021 11:39 PM

Why spend your money when the floodgates are opening in DC?

Although remember the PRR's electrification to Harrisburg was built with Reconstruction Finance Corporation money and that turned out alright

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Posted by CSSHEGEWISCH on Wednesday, October 6, 2021 9:53 AM

The PRR electrification was financed in part by RFC loans, which were repaid.

The daily commute is part of everyday life but I get two rides a day out of it. Paul
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Posted by alphas on Wednesday, October 6, 2021 11:11 PM

I suspect if it had been RFC grants rather than loans, the electrification would have been started towards Altoona & Pittsburgh after it reached Harrisburg.    Per what was told me by a former PRR VP in early '60's, it was paused only because the Pennsy didn't want to take on any more major debt until it had paid off some of what it had accumulated.   The Great Depression was still raging--people today forget that 1937 was actually its 2nd worst year. 

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Posted by CMStPnP on Tuesday, November 9, 2021 2:25 PM

Another article indicating the emperor has no clothes when it comes to financing:

https://thetexan.news/dallas-to-houston-high-speed-rail-project-faces-legal-and-financing-obstacles-and-criticisms/

 

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Posted by CMStPnP on Thursday, November 11, 2021 8:47 AM

I am just curious.....

Anyone else getting the feeling or vibe the Japanese are upset they were not selected as the operator of the new line so they are making their financing more in doubt now as a result?    I always wondered about this as it did not make sense to select a Spanish company to operate Japanese trains it has no past experience with.   Wonder what is going on there.    Just seems strange the Japanese financing was secured and now they are not too sure.    Also strange they are giving estimates now above $30 Billion which is more than double what was originally estimated when this all first started.    There is no way you can convince me they will recover $30 Billion anytime in this century in payback from fare revenues for just the Dallas - Houston segment.

BTW, independent of this project DFW is working on a Dallas to Fort Worth high speed connector, they are moving on dual track for it to be 200 mph high speed rail or a hyperloop connector, they say it will parallel interstate 30 across DFW.   They stated they want to use this projects proposed Dallas station as a Dallas terminus and the Amtrak intermodal Fort Worth station as the other terminal.   So it is kind of dependent on the Dallas station being built by the Dallas to Houston segment.    However, I am not sure on that last point because Texas Central spun off station development and construction to be done by a seperate subsidiary that will finance and operate the stations independent of the railroad.    So possibly the Dallas HSR terminal could be built independently of the Dallas to Houston segment if Dallas to Fort Worth completes first.

Then there is the third question.   Why is Amtrak proposing it's own Dallas to Houston service as part of it's new map?

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Posted by Gramp on Thursday, November 11, 2021 10:22 AM

Don't know answers. I just have hoped that this would be the Japanese system with adjustments suited to American needs. The Japanese have the knowhow to create a truly safe service through time. That's big for me.  (US railroads don't know how to do that).

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