OPINION:
The $130 billion California high-speed rail boondoggle is correctly viewed as one of the most mismanaged infrastructure projects in U.S. history. The proposed Texas high-speed rail project is a close second, estimated to cost more than $40 billion, or about $165 million per mile, to construct before eventual cost overruns are factored in.
The Texas project investors decided to slice through 240 miles of privately owned farm and ranch properties rather than building along or within existing rights of way, such as along the Dallas-Houston Interstate 45 highway. After more than a decade of effort, the Texas project still lacks 75% of the parcels needed to build the route and remains without a federal construction permit.
Even highly rated high-speed rail projects are under increased scrutiny as they join the line of “privately funded” projects that inevitably run to the federal taxpayer to finance. Japan’s high-speed rail systems were first financed in the 1960s with World Bank and Japanese government loans and required ongoing massive public taxpayer subsidies. Of the dozens of European high-speed rail lines, only one regularly operates in the black.
China’s most profitable high-speed rail system, connecting Beijing and Shanghai, reported a net operating profit of $1.78 billion in 2024, insufficient to repay the debt service on its $34 billion price tag. China’s national railway operator is nearing $1 trillion in high-speed rail debt and other liabilities in “a giant money pit” and struggles to pay its annual $25 billion debt service.
High-speed rail is the darling of climate activists, supposedly because of reduced carbon emissions from operations. Yet there is no evidence that high-speed rail has reduced net global emissions. The gargantuan carbon footprint associated with manufacturing high-speed rail rolling stock, equipment and tracks is rarely considered. This includes massive quantities of steel and concrete to build bridges and berms, vast quantities of natural gas and coal needed for heat-intensive blast furnaces to produce that steel and cement, and the diesel to power the trucks and earth movers preparing the ground under an alignment.
The high-voltage electricity needed to power high-speed rail cannot be sufficiently generated by weather-dependent, intermittent solar and wind farms. It requires a dependable, dense energy baseload available only from natural gas, coal or nuclear power. (Note that China’s 38,000 miles of high-speed rail operate in a country that produces and consumes half the world’s annual coal resources, alone emitting 30% to 35% of global carbon emissions.)
Other high-speed rail problems now afflict two favorably viewed U.S. projects. One connects Miami and Orlando in Florida, and another will connect Las Vegas, Nevada, and Rancho Cucamonga, California, 40 miles from downtown Los Angeles.
The second project was slated to cost $8 billion as a “free-market project” using only private investment and federally tax-exempt private activity bonds, with no direct taxpayer dollars. In December 2023, the Biden administration awarded the project a $3 billion grant under the Infrastructure Investment and Jobs Act. It is now estimated to cost more than $21 billion, nearly triple the original cost, and will need at least two more years to complete.
The project is now requesting another $6 billion as a federal taxpayer-backed Railroad Rehabilitation and Improvement Financing loan from the Department of Transportation’s Build America Bureau to help repay creditors. If approved, half the project’s cost to date will depend on taxpayer support. Oddly, the project received its Nevada construction permits before full financing was even in place, providing an important financial lesson for eager transit planners and burdened taxpayers.
This is just the latest Washington-as-usual story, wherein a project is touted as private and inexpensive, but once construction begins, more taxpayer support is continually required to keep it alive. The inherent problem in such public-private “blended finance” projects is that the costs of a project are socialized. Still, any potential profits accrue only to the private company, not the taxpayer.
Although Amtrak lost about $705 million in 2024, serving more than 500 stops, the Miami-Orlando line lost more than $500 million, serving just six stops. At the same time, its bonds have been downgraded several times this past year because of slower-than-expected ridership growth and higher-than-expected costs. The railroad is unable to forecast when, if ever, it will break even.
High-speed rail has long been considered a transportation sector of dubious value, especially within a vast American economy well-served by 45,000 daily rapid-connection flights across distant cities and 164,000 National Highway System miles connecting shorter distances. Burdened by perennial debt, persistent cost overruns, low ridership and repeated taxpayer bailouts, high-speed rail may finally be racing toward oblivion.
• John Sitilides, a federal government affairs and geopolitical risk specialist, advises landowners affected by the proposed route.
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