Texas High-Speed Rail Project Future Uncertain After Latest Setback

Newsweek

a day ago

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The proposed Texas Central high-speed rail project suffered a fresh blow this week when Spanish rail operator Renfe decided to liquidate its U.S. subsidiary—Renfe of America—and write off its entire investment, as reported by Trenvista and El Economista.
The announcement followed recent setbacks, including the Trump administration's withdrawal of a $63.9 million federal grant and the quiet exit of Japanese investors from the $40 billion venture linking Dallas and Houston.
Renfe's withdrawal not only removed a leading international operator from the project but also highlighted the financial instability facing what is one of the nation's most ambitious transportation undertakings.
Newsweek reached out to Renfe and Texas Central for comment on Friday via email outside of regular office hours.
Why It Matters
The Texas Central high-speed rail line, envisioned as a transformative connection between Houston and Dallas, had promised to revolutionize mobility in the region and establish the United States as a player in high-speed rail. Its struggles bear implications for federal infrastructure policy, private-public investment risks, and the credibility of large-scale rail projects nationwide.
A range of high-speed rail projects has been proposed across the U.S. In May, former Obama-era Transportation Secretary Ray LaHood told Newsweek that he believed one successful high-speed line could unlock other projects across the country.
What To Know
Map of the proposed Dallas to Houston high-speed rail line produced by Texas Central.
Map of the proposed Dallas to Houston high-speed rail line produced by Texas Central.
Texas Central
Renfe Liquidates Its U.S. Subsidiary After Heavy Losses
Renfe, Spain's state railway operator, dissolved Renfe of America after recognizing accumulated losses of €4.5 million (approximately $5 million) and writing down all investment in the Texas Central project, as documented in its 2024 accounts.
This move followed more than five years of unsuccessful efforts to establish U.S. high-speed rail operations as a strategic partner for Texas Central. Renfe originally anticipated up to €5.3 billion in revenues through 2042, having won a contract to operate the proposed 386-kilometer Dallas–Houston line. However, the company declared the value of its U.S. investment at zero and publicly abandoned any hope of recovering debts dating back to 2019.
Federal Funding Pulled After Cost Overruns and Delays
The U.S. Department of Transportation withdrew a $63.9 million grant in April previously allocated to Amtrak for Texas Central, labeling the project "a risky venture for the taxpayer." Texas Central, which initially had a $10 billion budget estimate, saw its spending expectations balloon to over $40 billion, according to reports from the Reason Foundation and multiple financial outlets.
Key Investors and Stakeholders Exit
Renfe's departure followed the prior exit of major Japanese investors, who reportedly lost over $272 million in the venture. Fort Worth-based Kleinheinz Capital Partners took over as lead investor, acquiring significant stakes from Japanese shareholders.
Texas Central has acquired only about 25 percent of the land needed for the line, with outstanding construction permits and further land acquisition unresolved. The current combination of lost foreign expertise and evaporating funds has increased scrutiny from the Texas legislature, which is now demanding enhanced transparency and annual financial disclosures from project leaders.
Possible Silver Lining in Private Equity Approaches
Some industry observers suggested that private equity-led models, similar to those seen in Florida and Nevada, might offer a path forward. Robert Pearsall, Partnership Director at the US High Speed Rail Association (USHSR), told Railway-News the withdrawal of Amtrak and federal funds could help clear the path for private capital, pending state-level approvals. Yet, the pace of future development depends on clearing Texas's legislative barriers, securing financing, and restoring confidence among lenders and landowners.
What People Are Saying
Jennifer Stevens, from campaign group ReRoute the Route, which opposes the proposed Texas Central line, told The Texan: "This is a company that has been nearly broke for at least half a decade. Now because of this government filing we know Texas Central left a Spanish investor holding the bag on their $5 million investment. They are either unwilling or unable to pay for services rendered more than five years ago."
Former Transportation Secretary Ray LaHood told Newsweek in May: "If you build it they will come, if you build it, it will be successful and I think that will be the case with Brightline West, Las Vegas to L.A., and I think it will be true San Francisco to L.A. I think they will be wildly popular. I really believe at this point if you build it they will come and the proof of that is Europe and Asia—their trains are wildly popular."
What Happens Next
Texas Central leaders intend to continue seeking funding and regulatory approvals while preparing to rebid for lost operating contracts. However, the project's future will depend on whether additional private investors step forward and whether state and federal regulators support a new business model for high-speed rail between Dallas and Houston.