Texas Central Picks Two Companies to Do Design Work for Houston-to-Dallas Bullet Train

Texas Central Partners has taken another step toward getting the Houston-to-Dallas bullet train project off the ground. On Tuesday morning, company officials announced that they've selected two firms, Archer Western Construction and Ferrovial Agroman US Corp., to do about $130 million of engineering and pre-construction work on the project.

If things go according to plan, Texas Central officials say, actual construction will start by 2017 and by 2021, they will have invested more than $10 billion to construct a Houston-to-Dallas bullet train line (Japan Central's N700 Shinkansen) that will be toting passengers between the two cities at speeds of up to 200 mph within 90 minutes. Critics of the project insist that the high-speed rail line will only benefit people living in Houston and Dallas while those in the rural counties will have to give up their land without getting anything out of it, as we wrote in our August cover story "On the Line."

The two companies tapped for the gig with Texas Central have combined to create Dallas to Houston Constructors. But the intriguing angle in this development is that the joint venture, Dallas to Houston Constructors, isn't requiring any upfront payment from Texas Central.

That's right. They're basically initially doing the work for free, at least at first, in what Texas Central in a press release called the nascent construction venture's "in-kind commitment" to the project.  

Which, considering both companies have a decent amount of rail construction experience, could very well make this an important development for Texas Central. Archer Western Construction is a member of the Walsh Group, a collection of companies with experience in the construction business dating back to 1898, according to Forbes. The Walsh Group is the largest bridge builder and the fourth-largest domestic transportation contractor in the United States, according to the release. Archer Western has about a decade of rail project experience, and the company managed about 200 subcontractors for the DART Green Line light rail and DCTA commuter rail expansions in North Texas. 

Ferrovial Agroman US Corp. is an Austin-based company that constructed 25 percent of the Spanish high-speed rail network. The company also completed the LBJ Express managed lanes project in the Dallas metroplex and the North Tarrant Express Segments 1 and 2. Both projects were done ahead of schedule, according to Texas Central. 

The combo created by these two companies, Dallas to Houston Constructors, has no equity or ownership stake in the project. The company will handle engineering, cost estimation and construction, but it won't be handling land acquisitions or be acting as the project developer. 

Texas Central heard from more than a dozen design and construction firms, but went with Dallas to Houston Constructors because that firm has experience in designing, constructing and maintaining high-speed rail. Plus it has experience doing construction in Texas. Of course, we're betting the whole "in-kind" commitment of $130 million worth of work probably helped put Dallas to Houston Constructors over the top with Texas Central. The company is working without getting a cent from Texas Central for its efforts upfront.

Texas Central officials, never ones to miss a chance to try and spin the situation to make the project look both good and viable, crowed in the release that the commitment of "in-kind" work that Texas Central values at $130 million means the company is already more than halfway to its goal. Texas Central has to raise $400 million in investments to get to the final construction phase (where the actual building happens) for the high-speed rail line.

Back in July, company officials announced that Texas investors had kicked in about $75 million toward the project. According to the Texas Central way of doing the math, the Dallas to Houston Constructors work commitment, valued at $130 million by Texas Central, means the company has raised about $205 million so far. Now there's only $195 million to go before construction actually starts. 

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