Carlos Aguilar is the CEO of Central Texas, a company that raises money to build a bullet train. This “new and innovative line of high-speed passenger trains … will connect the country’s fourth and fifth largest economies, North Texas and Greater Houston, in less than 90 minutes, with a stop in the valley of Arms “, announces the website.
To build this train, Central Texas has to raise tens of billions of dollars. Currently, the cost is “about $ 20 billion,” a basic price that includes “the construction of lines, tracks, viaducts, berms, maintenance facilities, electrical substations and three passenger stations,” although it is likely to be lower.
Aguilar told Y’all-itics, a podcast calling itself “the home of Texas cold beer and hot politics,” that fundraising for the train is likely to depend on the passage of the bill. of infrastructure financing in Congress.
“We are seeing what happens with the infrastructure package. Obviously, this is critical to what we do here. We have a base case that includes U.S. government funding. And this is due to the length of debt service that these funds provide. This is a criterion by which the other funds that would enter the project would follow. This is how it works in international finance. We need to close it all at once for everything to work together, ”the Texas Central CEO said.
The ABC subsidiary, WFAA, reported that Central Texas would ask the federal government for about $ 12 billion in loans for railroad rehabilitation and improvement, combined with an additional $ 12 billion in private funding from Japanese banks and Europeans, $ 4 billion over the current company. advertised cost.
This funding scenario left Marc Scribner, a policy analyst at the Reason Foundation, with a question.
“It is not clear what Mr. Aguilar means when he says that the infrastructure bill must go through to receive RRIF loans. RRIF loans already exist and the infrastructure bill does not increase lending capacity. The vast majority of the 35 billion dollars in RRIF loan authority are currently available for eligible projects, “Scribner told the Washington Examiner.
Scribner’s colleague Baruch Feigenbaum said he believes “Central Texas sees this as an opportunity to advertise their train.” But he added that “the infrastructure bill makes some minor changes that make it easier for Central Texas to get an RRIF loan.” He said he was concerned that “the RRIF program is so unsubscribed that [the Federal Railroad Administration] it will give Central Texas a massive loan that the company cannot repay. ”
In this default scenario, it could be the U.S. taxpayers who end up assuming the loss.
If the infrastructure bill goes through and Texas Central gets government funding, the bullet train will have passed about 15 years to complete construction. However, the company claims it will generate “17,000 jobs during construction and more than 1,500 permanent direct jobs when the train is operational.”
“All the main elements that we need to support the phase of execution are in place. We have passed regulatory approvals. This has happened through his course in DC. Those things have been approved. We have received cases in the Texas Supreme Court regarding our status as a railroad in Texas and, with it, eminent domain. This has been resolved in our favor, though. We respect all legal processes, so we don’t prevent any final decisions, but things are going very well, ”Aguilar said in the podcast.
One of the bullet train outlets had been that it would be “privately funded.” Federal funding news prompted one of the Y’all-itics hosts to ask, “Did anything change somewhere along the route? Because since it was announced many years ago, it was advertised as this option. “I was going to use private money. I didn’t need state money. I didn’t need federal government money.”
Aguilar replied: “No. I think there is a misunderstanding about what “private” means. Private means that it has been developed privately. We have not spent any federal or state funds to develop this project. We have over $ 700 million in funding, and none of that comes from either the state of Texas or the federal government. And that has allowed us to assemble a package that is ready for execution. “
That is, once the federal government opens the portfolio.
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Original author: Jeremy Lott
Original location: The general manager of the Texas bullet train wants to approve the infrastructure bill