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Renfe’s Mega-Contract On Texas AVE Falters Due To Financing Problems

The high-speed project between Houston and Dallas is in the air and threatens to stagger Renfe’s first big step abroad after the AVE to Mecca. The Central Texas consortium , which is promoting the project, is encountering serious difficulties in obtaining the necessary financing for its development, which has already begun to cause a certain nervousness in the sector in the face of what they consider inevitable, a delay in the start of the works. .

The high-speed line that Renfe will operate through a contract of about 6,000 million dollars that was signed a few months ago, has as a key date for the start of operation and maintenance in 2026 , when the public company headed by Isaías Táboas expects to be employing 1,300 people in the country. But whether these deadlines are met depends, to a large extent, on the approval of the bipartisan infrastructure bill that must go forward in the House of Representatives during this month of September after the first approval of the US Senate. But this process does not seem easy .

It depends on him to unlock part of the financing that the project needs to get ahead. “The total cost of this project is around $ 24 billion. That is the cost of building it, installing and commissioning it, installing all the equipment and making sure it can get into business operations,” said the CEO. from Central Texas, Carlos Aguilar, on the Y’all-itics podcast this week.

The $ 24 billion needed is divided into two parts. The first 12,000 million, which would be provided through bank loans already committed , and the remaining 12,000 million, through other types of mechanisms directly linked to the bipartisan Infrastructure Law that must be approved in the coming weeks.

For all this, the work , which was planned to begin during this last semester of the year, will find it difficult to meet the deadlines . The executive director of Central Texas himself questioned this possibility and said that there is barely a 50% probability that it will start during this same fiscal year, “the schedule is fluid,” he added, noting that there is still only 40% of the necessary land. for the project.

Once funding is secured, construction will kick off with 50 miles of track from Dallas to the south to allow the first tests to take place. “The exact timing of execution will depend on how quickly formal commitments are secured,” Central Texas said just a few weeks ago.

75% of the flight price
Be that as it may, the project in which Renfe will act as operator has already set some of its key conditions, such as the price of tickets. It is planned that the 386-kilometer route that connects both cities will take about 90 minutes and that the ticket, according to Aguilar, will cost around 75% of what that same trip by plane represents today .

In his speech at Y’all-itics, the CEO of Central Texas put this cost at about $ 153 per passenger compared to just over $ 200 for an airplane seat.

For this, wagons inspired by the N700 Supreme used by Japan Central Rail’s shinkansen service will be used, which will begin to be assembled about 18 months before the train’s operations begin, planned, with the original deadlines, for 2026 .

Renfe will collaborate with Texas Central in the design and development of the operational and commercial aspects of the high-speed service that will connect Dallas with Houston with an intermediate station in Brazos Valley. All project stations will be connected to the highway network, public transport systems and large parking areas, according to Renfe itself. The project that threatens to suffer delays will mean the creation of some 10,000 direct jobs in the construction phase.

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