DOT saves taxpayers over $60M by terminating Texas high-speed rail contract
Transportation Secretary Sean Duffy made the announcement, saying an agreement between the Federal Railroad Administration (FRA) and Amtrak to terminate the $63.9 million grant had been reached.
The grant was awarded to Amtrak under the Corridor Identification and Development Program for the Amtrak Texas High-Speed Rail Corridor, previously known as the Texas Central Railway project.
"I am pleased to announce that FRA and Amtrak are in agreement that underwriting this project is a waste of taxpayer funds and a distraction from Amtrak's core mission of improving its existing subpar services," Duffy said. "If the private sector believes this project is feasible, they should carry the pre-construction work forward, rather than relying on Amtrak and the American taxpayer to bail them out. My department will continue to look for every opportunity to save federal dollars and prioritize efficiencies."
The Texas Central Railway project was originally announced as a private venture, but its cost estimates increased dramatically, and the project became dependent on federal dollars and Amtrak for its development.
DOT said the capital cost for the project is believed to be more than $40 billion, adding that the price makes construction unrealistic. The cost also makes the project a risky venture for taxpayers.
Amtrak has struggled with operating deficits, though ridership has recovered since the pandemic.
The main rail company in the U.S. has also experienced operational challenges, including the loss of its Horizon coach fleet to corrosion and delays in the Northeast Corridor.
FRA has made fixing Amtrak's issues a top priority.
Amtrak, under the Biden administration, considered massive loans underwritten by the U.S. government, as well as grants, to be able to take on construction activities, DOT said.
Walking away from the Texas project allows Amtrak to focus on much-needed improvements to be more reliable to its riders, according to the DOT.
"Connecting Dallas and Houston remains one of the more exciting opportunities for new passenger rail in the United States," FRA Chief Counsel Kyle Fields said. "Today's announcement reflects a recognition by Amtrak and FRA that federalizing the Texas Central Railway proposal is not the best use of taxpayer funding."
Amtrak did not respond to Fox News Digital's request for comment on the matter.
According to the DOT, the FRA will continue to seek out new rail projects.
The $60 million saved by terminating the project will be reallocated for other projects that "support safe, efficient, and reliable rail transportation," the DOT added.
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