RUMOR: “The project is seeking federal loans, which means it is not private. If the project fails, taxpayers will still get stuck paying for a bail out.”
This project is a private venture with private investors putting their capital at risk—state or local officials in Texas, of all places, have no desire, incentive or legal standing to bail out a private company. That’s just not how Texas does business.
As for federal loans, the project will explore all forms of capital available to private companies to finance debt for the project, including federal loan programs like RRIF and TIFIA. These programs are specifically designed to promote private investment to improve and innovate US infrastructure. They are no different in principle than Perkins loans to help make college more affordable, SBA loans to encourage small business and mortgage-interest deductions to support home-ownership.
These loans are like private financing because loans made by these programs have terms very similar to a loan from a private bank or other entity—the principal must be paid back with interest, and in fact will be available to fund other infrastructure projects in the future.
BUSTING MYTHS AT HIGH SPEED!
Select another topic to see reality behind the rumors about high-speed trains in Texas.