Texas Central Project

[BigFootsSocks]

Unfortunately it feels like they’re not losing, even when they should be. TAHSR’s claims are wildly overstated and grossly untrue but all you have to do is spread fear and propaganda and you can convince anyone

[gmac]

16 minutes ago, BigFootsSocks said:

Unfortunately it feels like they’re not losing, even when they should be. TAHSR’s claims are wildly overstated and grossly untrue but all you have to do is spread fear and propaganda and you can convince anyone

 

I think you meant to say that the high-speed rail folks have made wildly overstated claims that are grossly untrue. Their numbers were pulled out of something rather less savory than a hat.

 

I get that some of you want a magic train. Problem is, the money is just not there to either build it, or keep it operating, without huge public subsidies.

[UtterlyUrban]

5 hours ago, gmac said:

 

I think you meant to say that the high-speed rail folks have made wildly overstated claims that are grossly untrue. Their numbers were pulled out of something rather less savory than a hat.

 

I get that some of you want a magic train. Problem is, the money is just not there to either build it, or keep it operating, without huge public subsidies.

I am a simple man.  Math can be a challenge for me.  However.......

 

$15b to build it.  Some of that will be debt and some will be equity.  However, if it were all debt, interest rates are rising right now - let’s say that they could get 3%.  That’s $450m in interest only per year.  Take the average ticket.....say $300 round trip..... that’s 1.5m round trips per year just to pay the interest.  Forget about operating costs, etc.  That’s only the interest.  My numbers are wrong, I am certain , as they will assuredly not finance this 100% debt..  The point is that this project at 15b isn’t going to be simple to finance.

 

there is a reason why government normally pays for infrastructure projects.... roads, bridges, airports, etc.   

[ADCS]

10 hours ago, BigFootsSocks said:

Unfortunately it feels like they’re not losing, even when they should be. TAHSR’s claims are wildly overstated and grossly untrue but all you have to do is spread fear and propaganda and you can convince anyone

 

TAHSR is loud, but they haven't been effective. Houston and DFW interests are too strongly behind the project, and you don't have airlines seeking to torpedo the thing like before.

 

One thing to remember - all the top executives are high-level Republicans and donors, many of them Bush allies.

[Nate99]

8 hours ago, UtterlyUrban said:

I am a simple man.  Math can be a challenge for me.  However.......

 

$15b to build it.  Some of that will be debt and some will be equity.  However, if it were all debt, interest rates are rising right now - let’s say that they could get 3%.  That’s $450m in interest only per year.  Take the average ticket.....say $300 round trip..... that’s 1.5m round trips per year just to pay the interest.  Forget about operating costs, etc.  That’s only the interest.  My numbers are wrong, I am certain , as they will assuredly not finance this 100% debt..  The point is that this project at 15b isn’t going to be simple to finance.

 

there is a reason why government normally pays for infrastructure projects.... roads, bridges, airports, etc.   

 

They would need a heck of a guarantee from some deep pockets to get 3% on any significant fraction of that $15 bn.  Airlines can't get that kind of rate on debt that is completely secured by aircraft used as collateral.

 

I've said it before, I'd love to see the business model here.  

[Houston19514]

11 hours ago, UtterlyUrban said:

I am a simple man.  Math can be a challenge for me.  However.......

 

$15b to build it.  Some of that will be debt and some will be equity.  However, if it were all debt, interest rates are rising right now - let’s say that they could get 3%.  That’s $450m in interest only per year.  Take the average ticket.....say $300 round trip..... that’s 1.5m round trips per year just to pay the interest.  Forget about operating costs, etc.  That’s only the interest.  My numbers are wrong, I am certain , as they will assuredly not finance this 100% debt..  The point is that this project at 15b isn’t going to be simple to finance.

 

there is a reason why government normally pays for infrastructure projects.... roads, bridges, airports, etc.   

 

Bullet Train ridership is anticipated to ramp up to 5 million journeys by the mid 2020’s, and 10 million journeys by 2050.  That’s 30% of the anticipated number of long-distance trips between North Texas and The Greater Houston Metro Area.

[UtterlyUrban]

1 minute ago, Houston19514 said:

 

Bullet Train ridership is anticipated to ramp up to 5 million journeys by the mid 2020’s, and 10 million journeys by 2050.  That’s 30% of the anticipated number of long-distance trips between North Texas and The Greater Houston Metro Area.

Ok, so, if you believe that number, that is 2.5m round trips.  Of which, 1.5m of them will pay for INTEREST only (not even principal and certainly not operating expenses).  Do notice however that they expect a RAMP to that during likely a 5 year period after they commence operation.  It is therefore possible that they will lose Billions in aggregate during that 5 years from when they start taking passengers to the point that they breakeven.  That negative cash-flow will mean even more cash needs.

 

oh, and by 2050, nearly TWO GENERATIONS from now,  anyone’s “forecast” is worth exactly zero.

[UtterlyUrban]

2 hours ago, Nate99 said:

 

They would need a heck of a guarantee from some deep pockets to get 3% on any significant fraction of that $15 bn.  Airlines can't get that kind of rate on debt that is completely secured by aircraft used as collateral.

 

I've said it before, I'd love to see the business model here.  

I was thinking “tax exempt debt” — the vehicles that sewer treatment works, garbage dumps, etc use to finance as a “public infrastructure” project.  I have zero idea if this project qualifies however.

 

 

[Houston19514]

And I think the cost estimate is $12 Billion, not 15

[Houston19514]

And I believe they have said the project relies on the real estate development at the stations.

[UtterlyUrban]

For clarity, I want this project to be built.  I am a supporter.  BUT, at $15b with NO government subsidy, I strain to see how it will be viable.  Smarter minds than me may show me wrong.  

 

Question, has there ever been a $15b privately financed (zero taxpayer support) transportation project in the US?  I don’t recall anything.  Projects this size, it seems to me, are government financed...... for a reason.......

[UtterlyUrban]

6 minutes ago, Houston19514 said:

And I think the cost estimate is $12 Billion, not 15

Ok, article said $15b.

 

 

[Houston19514]

The attacks and questioning of this project seem odd, but I guess they are perfectly in line with the general negativity of this board.  But, let's say the naysayers are right.  So what?  What's the worst result?  

 

Some seem to be implying there is something nefarious afoot.  What is the supposed ulterior motive of these people/companies who have already spent millions of (their own) dollars pursuing this project?

[BeerNut]

3 hours ago, UtterlyUrban said:

For clarity, I want this project to be built.  I am a supporter.  BUT, at $15b with NO government subsidy, I strain to see how it will be viable.  Smarter minds than me may show me wrong.  

 

Question, has there ever been a $15b privately financed (zero taxpayer support) transportation project in the US?  I don’t recall anything.  Projects this size, it seems to me, are government financed...... for a reason.......

 

I'm sure the Japanese government will chip in a significant amount once all the legal and land acquisition uncertainties are determined.  For reference they plan to loan India almost 14 billion at .1% with 50 year repayment.  https://www.forbes.com/sites/wadeshepard/2017/09/14/japan-propels-india-into-the-age-of-high-speed-rail-china-stands-by-watching/#3f3484a31a9e

 

And the insert link button isn't working...

[UtterlyUrban]

10 hours ago, BeerNut said:

 

I'm sure the Japanese government will chip in a significant amount once all the legal and land acquisition uncertainties are determined.  For reference they plan to loan India almost 14 billion at .1% with 50 year repayment.  https://www.forbes.com/sites/wadeshepard/2017/09/14/japan-propels-india-into-the-age-of-high-speed-rail-china-stands-by-watching/#3f3484a31a9e

 

And the insert link button isn't working...

This is an excellent point.  I was unaware of this and, you may be correct.  

 

I just read the Texas Central website again.  They specifically say that they will:

 

“not seek grants from the US Government or the State of Texas, nor any operational subsidy once operation begins. The project will be financed with a blend of debt and equity.”

 

if one thinks of those words closely, it absolutely leaves open the idea that they WILL take government money — just from another government other than the two listed.

 

I also find the word “grant” interesting.  A “grant” is not a “loan”.  So, I assume that they would take, should one become available, a “low interest loan” from Texas or the Feds?  The word “seek” is also interesting.  If they truly do not intend to take government money, why not just say “we will not accept any money from the State of Texas or the US government for construction or operations......”

 

anyway, I hope that it does get financed, built, and becomes operational, quickly.

 

 

 

 

[mollusk]

Let's not forget the equity side of things.  Companies don't offer stock (or other fractional ownership interests) because they feel lonely if they don't belong to enough people. 

 

(edit:  I see the emoticons are still borked)

Edited July 4, 2018 by mollusk

[BigFootsSocks]

On 7/2/2018 at 11:11 PM, gmac said:

 

I think you meant to say that the high-speed rail folks have made wildly overstated claims that are grossly untrue. Their numbers were pulled out of something rather less savory than a hat.

 

I get that some of you want a magic train. Problem is, the money is just not there to either build it, or keep it operating, without huge public subsidies.

Yeah obviously that’s what I meant to say; idk why I wrote my post in the exact opposite tone as your correction and with the completely opposite viewpoint, but hey thanks for fixing that for me and trivializing it in a totally non passive aggressive way. 

[ADCS]

On 7/4/2018 at 7:24 AM, UtterlyUrban said:

This is an excellent point.  I was unaware of this and, you may be correct.  

 

I just read the Texas Central website again.  They specifically say that they will:

 

“not seek grants from the US Government or the State of Texas, nor any operational subsidy once operation begins. The project will be financed with a blend of debt and equity.”

 

if one thinks of those words closely, it absolutely leaves open the idea that they WILL take government money — just from another government other than the two listed.

 

I also find the word “grant” interesting.  A “grant” is not a “loan”.  So, I assume that they would take, should one become available, a “low interest loan” from Texas or the Feds?  The word “seek” is also interesting.  If they truly do not intend to take government money, why not just say “we will not accept any money from the State of Texas or the US government for construction or operations......”

 

anyway, I hope that it does get financed, built, and becomes operational, quickly.

 

 

 

 

As I've understood it, the whole project will be heavily subsidized by JR and the Japanese government as a proof of concept for Shinkansen technology in the US. If they can show that it will work between Houston and Dallas, then they can start selling to the more expensive, but potentially more lucrative routes in the Northeast Corridor and Midwest.

[cspwal]

Sees HSR thread has updates

Gets excited and clicks

Goes to hospital for burns from the restarted flame war

[samagon]

On 7/3/2018 at 4:53 AM, UtterlyUrban said:

I am a simple man.  Math can be a challenge for me.  However.......

 

$15b to build it.  Some of that will be debt and some will be equity.  However, if it were all debt, interest rates are rising right now - let’s say that they could get 3%.  That’s $450m in interest only per year.  Take the average ticket.....say $300 round trip..... that’s 1.5m round trips per year just to pay the interest.  Forget about operating costs, etc.  That’s only the interest.  My numbers are wrong, I am certain , as they will assuredly not finance this 100% debt..  The point is that this project at 15b isn’t going to be simple to finance.

 

there is a reason why government normally pays for infrastructure projects.... roads, bridges, airports, etc.   

 

hopefully they could wrangle some freight business as well. 

 

and I'd be happy with a government financed project, we subsidize every other form of transportation, is the ire here that it's specifically rail, or just that we have enough already? It really comes down, I guess, to whether you think we have enough diversity of transit options?

 

Personally, I am for it, subsidize away. Let me pay some extra taxes to fund this, and build one from Houston to San Antonio too, might as well go from San Antonio to Dallas while we're at it and complete the triangle.

[mollusk]

On 7/5/2018 at 3:47 PM, samagon said:

build one from Houston to San Antonio too, might as well go from San Antonio to Dallas while we're at it and complete the triangle.

 

Houston / San Antonio / Dallas triangle... too bad they can't call it the Southwest Railroad.

[Nate99]

A $15 billion dollar loss leader proof of concept still doesn't sound plausible, but I'd welcome it if it were true.  

 

 

[102IAHexpress]

More power to Texas Central if they can build it without taxpayer funds. However, there are still two major concerns, or "attacks" as some call them:

 

1) Eminent domain has been used to acquire land. Fair enough, Texas statute allows TC to do that. However, if the project never materializes, then those homeowners got their property taken against their will and it wasn't even developed for the stated eminent domain claim. Incredibly inefficient.

 

2) Let say the project materializes. Great!. But then fails to sustain itself financially at some later point. Not to worry, taxpayers to the rescue.

 

The "questioning" of this project is not "odd" considering the potential pitfalls to Texas citizens. Again, if Texas central can get this launched and operational without taxpayer funds, then more power to them. 

[cspwal]

1. I believe they are trying only for easements that could only be used for a railroad - which would mean it's still their land unless the railroad is built, correct?
2. If the railroad does fail, and you don't want the government to bail it out, then tell your representatives not to bail it out.  If they do, either the public supports it or will vote them out.

[102IAHexpress]

Interesting documentary on Smithsonian Channel regarding the Japanese Shinkansen. Free to watch.

 

https://www.smithsonianchannel.com/videos/shinkansen/61264

 

Incredible amount of resources/money in order to maintain the train safe and operational. Much more than I would have thought. 

[102IAHexpress]

11 minutes ago, cspwal said:

1. I believe they are trying only for easements that could only be used for a railroad - which would mean it's still their land unless the railroad is built, correct?

 

No. They have the power of eminent domain. Now, it's true, Texas Central can first -ask- for an easement from the landowner. But if the landowner politely responds with, no thank you, Texas Central can then politely reply back with eminent domain proceedings. 

[Houston19514]

13 minutes ago, 102IAHexpress said:

 

No. They have the power of eminent domain. Now, it's true, Texas Central can first -ask- for an easement from the landowner. But if the landowner politely responds with, no thank you, Texas Central can then politely reply back with eminent domain proceedings. 

 

They would still only take an easement for railroad purposes. If the railroad is not built, it's status quo ante.

[Houston19514]

34 minutes ago, 102IAHexpress said:

More power to Texas Central if they can build it without taxpayer funds. However, there are still two major concerns, or "attacks" as some call them:

 

1) Eminent domain has been used to acquire land. Fair enough, Texas statute allows TC to do that. However, if the project never materializes, then those homeowners got their property taken against their will and it wasn't even developed for the stated eminent domain claim. Incredibly inefficient.

 

Do you have evidence that eminent domain has been used? I don't think they have gotten to that point and they have expressed any number of times that they intend/hope to acquire all of the right-of-way without resorting to eminent domain.

[Houston19514]

50 minutes ago, 102IAHexpress said:

More power to Texas Central if they can build it without taxpayer funds. However, there are still two major concerns, or "attacks" as some call them:

 

1) Eminent domain has been used to acquire land. Fair enough, Texas statute allows TC to do that. However, if the project never materializes, then those homeowners got their property taken against their will and it wasn't even developed for the stated eminent domain claim. Incredibly inefficient.

 

2) Let say the project materializes. Great!. But then fails to sustain itself financially at some later point. Not to worry, taxpayers to the rescue.

 

The "questioning" of this project is not "odd" considering the potential pitfalls to Texas citizens. Again, if Texas central can get this launched and operational without taxpayer funds, then more power to them. 

 

You have apparently been living in Illinois too long.  ;-)  The idea of the State of Texas bailing this out doesn't even pass the giggle test.    What are the pitfalls to Texas citizens?  Worst case scenario, the project fails and we get infrastructure paid for by unfortunate bondholders.

[102IAHexpress]

1 hour ago, Houston19514 said:

 

They would still only take an easement for railroad purposes. If the railroad is not built, it's status quo ante.

 

False. It is not status quo because the property is less valuable now, because it has now become incombered with an easement. Future buyers will want a discount on the property because the easement will likely run with the land.