A Texas high-speed rail project may still be eligible for federal funds from the Infrastructure Investment and Jobs Act, despite its use of foreign contracts.
According to Ronald Batory, administrator for the Federal Railroad Administration (FRA), the $20 billion Texas Central Partners (TCP) project to connect Dallas to Houston can qualify for “Buy American” funds only with Congress’ approval.
In his State of the Union address, President Joe Biden spoke about the Bipartisan Infrastructure Bill, saying, “It is going to transform America and put us on a path to win the economic competition of the 21st century.”
Biden highlighted one of the provisions in the bill that he said would support American jobs.
According to the President, the “Buy American” requirement for all infrastructure projects funded by the bill would “make sure American taxpayers’ dollars support American jobs and businesses.”
However, TCP’s proposed high-speed rail project plans to use Japanese technology based on Japan’s Tokaido Shinkansen train system. It has also signed a design-build contract with an Italian firm and has named a Spanish company as the rail operator.
TCP has additionally contracted with a French company for $16 million to assist in studying the effects of the extension from Dallas to Houston.
Still, Vance Ginn, chief economist at the Texas Public Policy Foundation, told The Texan that the “Buy American” provision does not prohibit projects from receiving federal funds if they contract with foreign companies. However, that is only if the iron, steel, and other supplies are manufactured in the United States.
The infrastructure bill’s “Buy American” provision states that Congress can waive the requirement if “domestic procurement” would be inconsistent with the public interest; if the types of iron, steel, or other manufactured products are not sufficiently available domestically; or if the use of the domestically produced products would increase the cost by more than 25%.
The planned Texas high-speed rail would add to the projects already eligible for federal funding under President Biden’s infrastructure bill. Earlier this month, the president designated $85 billion for thirty-one different passenger rail projects.
The project has yet to be approved by the Federal Railroad Administration (FRA). Still, it has made a significant advancement in its plans with the Surface Transportation Board affirming the right of the TCP to use eminent domain powers to build the high-speed rail.
Over the past month, the FRA has been seeking comments from the public about “how the Program should be implemented to best facilitate the development of intercity passenger rail corridors.”
The City of Dallas filed a public comment urging the FRA to support the Dallas to Houston high-speed rail project. The city said it is “critical to mobility, economic development, and sustainability, with recent growth in Texas cities and metropolitan areas.”
In contrast, William Scofield, president of Bud Adams Ranches, Inc., expressed concerns about the project. His ranch lies along the proposed route and will be impacted if the high-speed rail is built.
In a letter to the Washington Times, Scofield argued that the high-speed rail project does not comply with the “Buy American” requirements.
In the letter, he proposed that projects be given a numbered grade based on criteria “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.”
Scofield said he does not believe that TCP’s high-speed rail project would pass according to such standards.