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Texas rail advocates want state to fight for federal rail grants

‘We have a once-in-a-generation opportunity to seize the day’

Texas rail advocates want the state to apply for federal grants that would support rail-related projects. (Photo: Shutterstock/iofoto)

Texas short-line operators are urging the state to pursue federal funds that would help finance rail projects in the state.

They’re highlighting federal grants available from the Federal Railroad Administration, especially as the window to apply for grants is expected to open in May. They say Texas hasn’t ever participated in any FRA funding that assists and encourages short-line investment.

“We have a once-in-a-generation opportunity to seize the day and for once have Texas participate in a competitive grant program with other states … . There are many eligible projects in the TxDOT State Rail Plan that will never be completed if we don’t act on this soon,” Texas Rail Advocates (TRA) President Peter LeCody said. He added that if the state could match federal grants by just 20% to 30%, projects could be eligible for federal funding.

To be able to apply for federal grants, Texas rail advocates want Texas legislators to fund the Texas Rail Relocation and Improvement Fund. That funding could also help spur private-public partnerships supporting freight rail projects.

Paul Treangen, CEO of short-line operator TNW Corp. and president of the Texas Short Line and Regional Railroad Association, urged the Texas House of Representatives’ Transportation Committee in late April to provide support to this fund. The committee is conducting a study assessing current and future state transportation needs. 

“Our goal is to improve the freight rail network in Texas; assuring our short-line and Class 1 carriers operate seamlessly is critical to handling the growth being experienced in our state,” Treangen told FreightWaves. TNW Corp. operates three short-line railroads and logistics centers in Texas.

To move more freight to rail, Treangen and others advocate a two-pronged approach to existing gaps: federal infrastructure funding flowing through the state to local projects and state engagement through matching grants and investment tax credits. Both measures have been utilized in other states successfully, and these changes will encourage private capital investments to improve short-line infrastructure, Treangen told FreightWaves.

“The public benefits will include reduced highway congestion, supply chain improvement, emissions reduction, and assurance of rural and small project participation in economic growth,” Treangen said.

TRA suggested that Texas could join a rail compact with Oklahoma and Kansas to advocate for passenger rail service from Fort Worth northward. The state could also join the Southern Rail Commission and work with Louisiana, Mississippi and Alabama to support Gulf Coast passenger rail operations.

Federal grant opportunities will have billions available to states and localities over the next several years to fund projects that involve freight rail, including a railroad crossing elimination program, a corridor identification and development program that involves Amtrak and the consolidated infrastructure and safety improvements program, among others. 

The pursuit of federal funding comes as FRA announced Friday that the agency is establishing a “Corridor ID” program to create a pipeline of passenger rail projects ready for funding. The program is part of a broader effort, supported by the recently passed infrastructure bill, to promote intercity passenger rail. About $1.8 billion has been allocated for the program, and FRA will be soliciting proposals this year.

Over 40 short-line railroads are operating in Texas, sources said. Three Class I railroads operate in Texas, according to the Bureau of Labor Statistics: Union Pacific (NYSE: UNP), BNSF (NYSE: BRK.B) and Kansas City Southern, whose acquisition by Canadian Pacific (NYSE: CP) is being reviewed by federal regulators.

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The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.

Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.