The bipartisan infrastructure bill passed by Congress and enacted by President Joe Biden in November 2021 offers our nation the opportunity to focus on meritorious projects that can and should be built. To do this right, and prevent wasting precious taxpayer dollars, it is important that federal, state and local governmental entities coordinate with key federal agencies such as the Department of Transportation, EPA, Army Corps of Engineers and the Federal Railroad Administration to devise a uniform scoring system for all proposed infrastructure projects.
The scoring criteria used should include commonsense categories such as the number of citizens served, the feasibility of financing construction, compliance with federal social justice and climate policy priorities, and full compliance with the National Environmental Protection Act and the Endangered Species Act. The Environmental Impact Statement for any new infrastructure project must openly share all information during the planning process to allow and ensure extensive public input so that projects can survive inevitable challenges in federal court. A failed infrastructure project in Texas makes clear why such a scoring system is essential to good governance.
Almost a decade ago, a group of investors without professional experience in launching or operating a railroad launched a private company, Texas Central Railways, to build and operate a proposed private high-speed rail project linking Dallas to Houston without government funds.
The FRA was tasked with supervising the preparation of an EIS to ensure the proposed project would comply with NEPA requirements, and to evaluate the project’s potential impacts on human safety and the natural environment. But the FRA reviewed the project’s draft EIS even though it was submitted prior to the catastrophic flooding in east Texas caused by Hurricane Harvey and Tropical Storm Imelda, and before the National Oceanic and Atmospheric Administration’s new Atlas 14 flood mitigation and control rules were issued.
In a sworn affidavit to force a Texas landowner to allow access for required environmental field studies, the investors stated their company would be unable to comply with the FRA’s EIS standards unless a Texas court ordered the landowner to open up his property. The affidavit states that “without examination and survey of the property, there will be no project.” Unable to access the property, the investors obtained FRA approval of “drive-by windshield surveys” and “aerial photography” along 40% of the proposed route, in place of actual scientific land surveys. But the FRA completed and approved the EIS which fails to properly and fully account for impacts on endangered and threatened species and their precious habitat across 750 square miles of impacted area. Nor has the FRA confirmed that the proposed project complies with the Bald and Golden Eagle Protection Act or with the Migratory Bird Treaty.
The investors have steadfastly refused to disclose to the public the consultant report it used for ambitious ridership and revenue generation projections, so Texans have no idea how credible those figures are. The Texas Department of Transportation and an independent think tank both assessed the investors’ projection and concluded the project could not generate sufficient ridership to justify construction and operation. In a post-COVID-19 pandemic society, many Americans are able to work from home on a full- or part-time basis, a social phenomenon expected to severely diminish mass transit demand in most large American cities. But the FRA completed and approved the project’s EIS early in the COVID-19 lockdowns before the impact of the pandemic on the frequency and preferred methods of travel of all Americans could be fully understood and assessed.
The investors capitalized their private project in 2015 with an initial $150 million investment and touted their aim to build it entirely with private money at a $10 billion cost. Unfortunately, neither the FRA nor any other agency questioned or researched the investors’ ability to complete all work necessary to realize the project and render it worthy of the government’s extensive investive efforts, at taxpayer cost. Now that the project is expected to cost at least $30 billion, according to the company’s chair, the investors are seeking federal taxpayer-backed loans of as much as $12 billion to start the project. They were informed in July 2020 to submit a federal construction permit application to the Surface Transportation Board. Twenty months later, they have failed to do so, nor have they disclosed requisite financial information to federal government agencies or to the public.
As a result of the FRA’s dereliction on NEPA requirements, flood resilience, scientific methodology, environment protection, rider and revenue-generating projections, and financial disclosure, the EIS is already outdated or woefully deficient, with critical aspects of the proposed project needing to be restudied and rescored. Under a proper uniform scoring system, this proposed project would never meet the qualifications for any federal railroad loans or merit any federal financial assistance. Without a scoring system, certain members of Congress are able to push for billions of taxpayer-backed bailout dollars for the failed project. That’s why some project opponents have hired attorneys to challenge the current EIS in federal court.
In his State of the Union address, President Biden declared that “when we use taxpayers’ dollars to rebuild America, we’re going to do it by buying American. Buy American products. Support American jobs.” The proposed high-speed rail project in Texas will use rail technology and equipment built in Japan, on a system designed by a company in Italy, to be built and operated by a company in Spain, with engineering support from a company in Canada. About the only thing American about the project is the land the investors hope to condemn under private eminent domain authority now being challenged in the Texas Supreme Court.
This Texas boondoggle, much like its California cousin, offers one of the clearest arguments for stronger and more responsible federal oversight of the $65 billion that Washington will be distributing nationwide for the next generation of infrastructure projects.
• Randy Scofield is president & CEO of KSA Industries Inc., a diversified holding company in Houston, including automobile dealerships, ranching operations and an NFL team.
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