How private enterprise drives the trains

OPINION:

Texans are turning the tables on how to pay for nationally critical infrastructure projects, leading the way with a high-speed train project that relies on the expertise of private entrepreneurs instead of government money.

A private sector group is developing the passenger line to connect two of the nation’s top economic centers, Dallas and Houston, in a quick, 90-minute commute on trains running at more than 200 mph.

Driving this game-changing effort: Texas’ elected leadership has created a pro-business climate that attracts capital from all over the world, seeking to invest in new opportunities that put the state’s world-class labor force to work building the future economy.

Generally, the money used to plan and build America’s modern infrastructure comes from state and federal gas taxes and then distributed is based on formulas and restrictions politicians have put in place. In Texas, that means a constitutional prohibition against spending fuel-tax dollars on rail projects.

The project’s developers, Texas Central, backed by a group of primarily Texas-based investors, take it a step further by swearing off federal grants for construction or public subsidies for operation.

Its business model is rooted in creating an entirely new industry in the United States, a truly high-speed rail sector. As a private company, Texas Central is taxpayer, not a tax-taker.

All 10 counties, several cities, schools and other taxing districts touched by the North Texas-to-Houston route will share in the financial benefits, even before the trains begin operating. The economic activity will go far beyond the project’s footprint, thanks in part to private enterprise, including transit-oriented development around the stations spurred by the project.

A recent independent study confirmed the overall potential: a high-speed rail system linking Texas’ biggest metropolitan areas will produce more than $30 billion in economic benefits over the next 25 years.

Texas’ newest industry will create about 10,000 jobs during each year of construction of the 240-mile project and about 1,000 permanent jobs when operations commence, with an annual payroll of $80 million. In addition, estimated 4,000 ancillary jobs will be created by the economic activity of Texas Central and businesses working on the project.

Critics are making unfounded arguments to disrupt construction. But Texans are seeing through that clatter, recognizing the lasting economic benefits of a project that will offer a safe, reliable and productive alternative to the state’s growing transportation demands.

Texans also understand that high-speed rail will succeed because of the prosperity and economic potential unleashed by a free market, absent of political entanglements. Already, Texas Central has raised $75 million from Texas-based investors, including Fort Worth investor John Kleinheinz, Dallas developer Jack Matthews and former Houston Astros owner Drayton McLane Jr.

Simply put, government does not have all the answers. The private sector should be part of transportation solutions, and Texas Central can provide the pathway for similar projects in other states. Absent government interventionism that is uncharacteristic of Texas and other pro-growth states, high-speed trains will soon connect millions of Texans and generate additional tax revenue.

Call it infrastructure funding infrastructure. And Texas’ embrace of that entrepreneurial approach makes possible a system in which critical, innovative projects are built in months and years, not decades, and in a manner that doesn’t encourage wasteful spending.

• Tim Keith is CEO of Texas Central Partners, developers of Texas’ high-speed rail project.