Project Management Institute

Full Speed Ahead

Can Private-Sector Sponsors Help High-Speed Rail Finally Gain Ground in the U.S.?

High-speed rail has long had trouble leaving the station in the United States. Building a new rail network is a high-risk endeavor—as public-sector project sponsors have learned. The State of California's beleaguered US$65 billion high-speed project, which got the green light a decade ago, has become a kind of parable for how difficult it can be to square innovative transit plans with regulatory requirements, local stakeholder opposition and a polarized political environment.

Two private-sector sponsors seem to be making steady headway, however. All Aboard Florida completed the first construction phase of its Brightline rail line in January, connecting West Palm Beach and Fort Lauderdale, with extension to Miami scheduled for later this year. And the Texas Central high-speed rail project, which aims to first connect Houston and Dallas, is chugging along; the team expects to break ground as early as late 2018.

“The Texas bullet train is a perfect example of a new business model for delivering infrastructure improvements,” says Mike Bobinecz, PMP, lead project manager and vice president of design-build, Texas Central, Dallas, Texas, USA. “This project is entirely investor-owned and won't rely on state or federal grants for its construction or operation.”

That private financing will cover the project's US$15 billion budget, which includes all-electric technology—the same as in Japan's Shinkansen bullet train system—that can power trains up to 200 miles (322 kilometers) per hour. The Texas team chose the technology after carefully considering existing options and conditions along the 240-mile (386-kilometer) route, Mr. Bobinecz says. “The Shinkansen N700 is the best available choice for Texas because the lightweight train sets are better for the tough soil conditions here.”

Beware Slow Zones

Even with private funding, the Texas Central project team still has to jump through regulatory hoops. The project is moving forward with newly selected engineering, design-build and project management firms that are coordinating with the Federal Railroad Administration (FRA) on operating rules and environmental impact. In December, the FRA released its Draft Environmental Impact Statement on the project, which outlined a preferred route, identified passenger station locations and recognized the train system's low-impact design and construction principles. It was a big step forward for Mr. Bobinecz and other project managers, who will use the information to chart project planning and budgets.

The FRA also held public meetings earlier this year in the 10 counties containing the Texas Central route to take comments on the environmental report. Supporters showed up at these events, but so did ranchers and farm owners who voiced concerns about eminent domain. Plenty vowed to fight against any rail route plans that sliced through their property. Texas Central officials countered by arguing that the project will deliver 10,000 jobs each year of construction and contribute more than US$36 billion to the state and local economies over the next 25 years.

Support for the bullet train project continues to grow, says Mr. Bobinecz. “Texas will be leading the way, seeding a domestic manufacturing industry for similar high-speed projects throughout the rest of the country.”

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“Texas will be leading the way, seeding a domestic manufacturing industry for similar high-speed projects throughout the rest of the country.”

—Mike Bobinecz, PMP, Texas Central, Dallas, Texas, USA

Winning Over Neighbors

Meanwhile, the Brightline project in Florida has successfully overcome local stakeholder opposition—thus far, at least. County governments in the region north of West Palm Beach, through which All Aboard Florida plans to extend Brightline, sued the organization in 2015, claiming that the federal government unlawfully issued bonds to help finance the US$3 billion project. A judge dismissed the suit in May 2017. But in February of this year, the counties sued the U.S. Department of Transportation and the FRA, alleging the agencies didn't properly vet the project's public safety, environmental and traffic impacts. The suit's supporters are hoping to stop Brightline from extending northward. Meanwhile, construction for phase two, which will extend the line north to Orlando, is expected to start this year and last 24 to 30 months.

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A Brightline train in Florida, USA. At left, a rendering of the Texas Central project in Texas, USA

Leaders of ambitious projects know to expect pushback from stakeholders who would rather stick with the status quo, says Patrick Goddard, president and COO, Brightline, Miami, Florida, USA.

But the Brightline team hasn't dismissed concerns. Instead, the project team met multiple times with local residents to hear their concerns and make revisions to the project plan. It also hosted training workshops to educate first responders and school districts on rail safety. Since regular operations began in mid-January, Brightline trains have hit four people, killing two. Local authorities said people have been trying to go around crossing barriers. In response to the incidents, some Florida lawmakers have sought to more tightly regulate high-speed rail companies.

Yet Mr. Goddard remains bullish on high-speed rail in the state. To cater to its fast-growing population and bolster the project's business case, All Aboard Florida is building mixed-use developments around Brightline stations to drive revenues beyond ticket sales. MiamiCentral, the Miami station, is itself a megaproject, Mr. Goddard says, spanning six blocks and 11 acres (4.5 hectares). The station's scope includes a food hall and 130,000 square feet (12,077 square meters) of retail.

“[T]he transportation service itself rarely makes a profit,” John Renne, of Florida Atlantic University, told National Public Radio. “But when you combine the real estate and development opportunities … [you can] actually get to a very profitable outcome.” —Kate Rockwood

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

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