Texas High-Speed Rail Planners Wants Congressional OK To Sell Tax- Free Bonds
DALLAS (AP) _ A French-North American consortium that won a franchise to build the nation’s first ″bullet″ train system says it must now win a tax exemption before raising the billions of dollars the system will cost.
″Certainly it’s the largest privately funded infrastructure project in the United States,″ said William Agee, chief executive of Morrison Knudsen Corp., managing partner of the consortium. ″We have a big task ahead.″
Texas TGV, named after the 10-year-old Train a Grande Vitesse system in France, on Tuesday won the 50-year franchise to build a $5.5 billion line linking Dallas, Houston, Austin and San Antonio.
The group includes Paris-based GEC Alsthom, which developed the TGV, and Bombardier Inc. of Montreal, which holds the North American licensing rights.
Agee said the consortium will raise money by selling bonds to pension funds, insurance companies and other institutional investors, but it wants Congress to make them tax-free.
″Both the Senate and House need to, in effect, put high-speed rail financing on a level playing field with airports,″ he said.
Bonds for airports already are tax exempt, but those for railroads are only 75 percent tax-free, Agee said Wednesday.
By 1997, the consortium is to begin building a system similar to France’s TGV, which links 84 French cities. The trains will travel at speeds of up to 200 mph.
The consortium, which said it could build the system without public funds, must come up with $170 million by the end of next year or risk losing the franchise.
Its competitor for the franchise, German-backed Texas FasTrac Inc., had said it might need up to $1.7 billion in public money to build the railroad.
Texas FasTrac has 20 days to appeal the Texas High Speed Rail Authority’s franchise decision.
″We’re still sifting through the ashes and keeping all of our options open,″ said Rick Wheeler, director of infrastructure for Texas FasTrac. ″But we have not made a final decision.″
Both groups paid $500,000 fees to bid for the project. Together, they have spent more than $14 million on ridership analyses, environmental impact studies and preliminary engineering plans.