Reality:  A  Texas-­‐Based  Company        A  misconception  has  emerged  that  Texas  Central  Partners  (TCP)  is  foreign-­‐owned.  The  “foreign,”  in  the  context  of  business  filings  with  the  Texas  Secretary  of  State,  simply  means  TCP  was  incorporated  in  another  state  —in  our  case  Delaware—not  another  country.    We  originally  incorporated  TCP  in  Delaware  because  it  offers  a  jurisdiction  that  is  respected  by  entrepreneurs,  executives  and  investors  for  its  well-­‐established  business  statutes  and  case  law,  knowledgeable  judges  and  efficient  courts.  

It  is  estimated  that  nearly  half  the  companies  traded  on  the  New  York  Stock  Exchange  are  incorporated  in  Delaware.    Other  Texas  companies  that  the  Texas  Secretary  of  State  considers  “foreign”  entities  authorized  to  do  business  in  Texas  include  American  Airlines,  Blue  Bell  Creameries,  Boots  &  Coots,  Brookshire  Brothers,  the  Dallas  Morning  News,  Dell  Inc.,  Dr.  Pepper,  Exxon  Mobil,  Frito  Lay,  Halliburton,  the  Houston  Chronicle,  Hunt  Oil,  Luby’s,  Neiman  Marcus,  and  Texas  Instruments.    TCP  is  a  wholly  owned  U.S.  business.  

TCP  is  a  Texas-­‐based  company  that  exists  for  the  sole  purpose  of  developing  a  privately  financed,    for-­‐profit  high-­‐speed  rail  system  in  Texas  between  Dallas  and  Houston.    We  have  offices  and  employees  in  both  Dallas  and  Houston,  and  the  railway’s  headquarters  will  be  based  in  Texas,  where  it  will  employ  Texans  and  pay  state  franchise  taxes  in  Texas.  

We  also  have  an  office  in  Washington,  DC—not  because  we  want  to,  but  because  that  is  where  the  agencies  of  the  federal  government  that  regulate  this  project  are  located.    

TCP  is—and  the  system  that  will  be  built  will  always  remain—a  domestic,  American-­‐run  corporation.  

We  are  cooperating  to  make  this  project  a  success,  but  Texas  Central  Partners  and  Japan  Central  Railway  Company  are  two  separate,  independent,  and  unaffiliated  entities.    JRC  does  not  have  a  financial  interest  in  TCP  and  will  not  be  the  operator  of  the  railway.  

A  wide  variety  of  investors  will  finance  the  construction  of  the  system.    Many  will  be  from  Texas  or  other  parts  of  the  United  States.    We  also  expect  billions  of  dollars  in  capital  investment  from  around  the  world—including  Japan—to  flow  into  the  Lone  Star  State.  

This  project  will  pump  billions  of  dollars  in  outside  investment  into  the  Texas  economy.    We  see  that  as  a  good  thing—good  for  Texas,  and  good  for  Texans.    Creating  thousands  of  good-­‐paying  construction  jobs  and  ongoing  maintenance  and  operation  careers,  while  providing  a  safe,  affordable  and  sophisticated  travel  alternative  for  Texans  crowded  into  increasingly  congested  roadways  and  airports—all  paid  for  by  private  investors  rather  than  taxpayers—sounds  like  a  winning  proposition.  

Once  construction  and  testing  is  complete,  the  railway  will  be  owned  and  operated  as  an  American  corporation  with  an  executive  leadership  team  based  in  Texas.  

   

 

2    

Reality:  Reducing  Noise        The  Japanese  Shinkansen  bullet-­‐train  that  will  be  used  by  this  project  is  incredibly  quiet.    The  Japanese  designed  the  system  in  their  country  to  operate  in  harmony  and  in  close  proximity  to  homes  and  businesses  along  the  corridor;  i.e.,  it’s  designed  with  reducing  sound  levels  as  a  priority.  

We  can  achieve  further  significant  sound  reducations  along  the  corridor  by  incorporating  measures  ranging  from  sophisticated  and  attractively-­‐designed  sound  shields,  to  earthen  berms,  to  the  extensive  planting  of  trees,  bushes  and  other  vegetation.  

TCP  is  working  to  develop  precise  sound  and  vibration  calculations  representing  Shinkansen  operations  in  a  broad  sampling  of  environmental  conditions  (e.g.,  urban,  suburban,  rural,  etc.),  and  will  make  the  results  of  those  studies  available  to  the  general  public  as  soon  as  they  are  available.      However,  what  we  can  say  with  great  certainty  based  on  years  of  experience  is  that  the  notion  that  this  system  –  as  some  have  claimed  -­‐-­‐  would  sound  anything  at  all  like  a  jet  airplane  (or  even  a  freight  train)  is  simply  not  based  on  fact.  

TCP  is  committed  to  working  with  Texans  who  will  live  and  work  near  our  corridor,  and  whose  land  the  system  will  traverse,  to  identify  and  implement  design  and  mitigation  measures  that  will  reduce  any  noise  impacts  of  the  system.    

There  have  been  statements  about  videos  on  social  media  channels  that  portray  bullet-­‐trains  as  “really  loud.”  Not  everything  on  the  Internet  is  always  true  or  can  be  taken  at  face  value.  

For  example,  online  videos  are  often  recorded  with  camera  microphones  that  amplify  and  distort  the  sound  of  a  Shinkansen.    More  importantly,    Japanese  technology  is  much  quieter  than  high  speed  rail  systems  in  many  other  countries,  so  data  gathered  elsewhere  is  not  a  valid  comparison.  

We’ve  also  found  that  some  who  ascribe  to  this  rumor  have  based  their  opinion  on  sound  and  vibration  reports  completed  in  the  early  days  of  the  Shinkansen  system,  which  first  began  operating  in  1964.    Japanese  high-­‐speed  rail  operators  addressed  those  concerns  with  comprehensive  reforms  in  1974,  and  these  trains  now  operate  harmoniously  in  dense  urban  environments  and  pristine  rural  areas  of  Japan—a  nation  with  sound  and  vibration  laws  that  are  much  stricter  than  many  here  in  the  United  States.  

The  Shinkansen  is  not—as  some  people  have  assummed  mistakenly—an  outdated,  50  year  old  technology.    This  system  has  evolved  over  decades  of  operation.    The  current  version  of  the  Shinkansen,  the  N700,  went  into  service  in  2007  and  is  the  most  technologically  advanced  high-­‐speed  rail  technology  in  the  world  today.    The  Texas  system,  which  will  incorporate  the  N700  technology,  will  be  a  state-­‐of-­‐the-­‐art  high  speed  railway  based  on  cutting-­‐edge  technology  that  has  been  continually  pushed  towards  perfection  in  real-­‐world  settings.  

Think  of  the  improvements  that  have  been  made  since  1964  in  the  fuel  efficiency  of  cars  and  trucks,  or  the  processing  power  of  computers.      That  is  the  sort  of  advancement  the  Japanese  have  made  with  its  5th  generation  Shinkansen  bullet-­‐trains  that  we  will  use  in  the  system  we  are  proposing.  

   

 

3    

Reality:  Fairness  for  Land  &  Landowners      

We  understand  the  anxiety  those  affected  by  our  corridor  are  experiencing  in  regard  to  the  project’s  effects  on  their  land.    However,  rumors  that  this  project  will  require  massive  rights  of  way  and  split  counties  in  half  are  completely  unjustified.    

The  entire  Shinkansen  system  requires  a  width  of  about  100  feet  of  right  of  way—often  less.    This  100  feet  includes  north  and  south  bound  tracks,  electrical  components,  security  fencing,  and  crew  access.  

That  is  about  the  ROW  width  of  a  typical    two-­‐lane  farm  to  market  road.  

By  way  of  contrast,  the  TransTexas  Corridor,  which  the  high-­‐speed  rail  project  is  sometimes  compared  to,    would  have  been  over  three  football  fields  wide.    The  width  of  our  corridor  is  not  in  any  way  comparable  to  the  TransTexas  Corridor.  

We  have  also  heard  comparisons  of  the  Texas  project  to  government  projects  in  California.  We  don’t  know  exactly  what  has  or  has  not  happened  on  the  West  Coast,  but  here  is  a  good  rule  of  thumb—  

For  everything  you  hear  about  California’s  government-­‐directed  project,  you  can  assume  that  our  private-­‐sector  proposal  is  taking  a  

completely  different  approach.  

Texas  allows,  but  significantly  limits,  the  use  of  eminent  domain  proceedings  for  infrastructure  projects.    The  alternative  to  having  an  infrastructure  project  funded  by  private  investment  using  eminent  domain  in  limited  cases,  is  having  taxpayers  pay  for  and  the  government  control  every  electric  or  water  line,  oil  or  gas  pipeline,  and  freight  or  passenger  railroad  in  the  state—with  eminent  domain  still  being  used!  

The  train  system  we  are  proposing  has  an  extremely  narrow  footprint  of  about  100  feet.    The  state  will  strictly  constrain  our  ability  to  resort  to  eminent  domain  activities  to  the  easements  necessary  to  construct  and  operate  the  railroad—not  for  real  estate  or  any  sort  of  economic  development  around  station  areas.  

And  unlike  government  agencies,  this  project  will  turn  to  eminent  domain  only  as  a  last  resort,  after  all  other  options  have  been  exhausted.    Because  it  is  privately  funded,  TCP  has  more  flexibility  to  come  to  mutually  agreeable  terms  with  landowners  than  if  this  were  a  government  funded  project.    TCP  pledges  to  acquire  the  needed  property  respectfully—always  negotiating  in  good  faith,  and  engaging  in  a  fair  and  transparent  land  acquisition  process  consistent  with  Texas  law.    

   

 

4    

Reality:  Frequent  &  Convenient  Access        Precisely  because  we  place  such  a  high  priority  on  minimizing  landowner  impacts,  to  the  greatest  extent  possible,  we  have  identified  alignments  for  this  project  within  or  adjacent  to  existing  infrastructure    rights-­‐of-­‐way.  

Whether  the  train  tracks  are  located  on  an  elevated  structure  or  built  “at  grade”  (i.e.,  at  ground  level),  TCP  engineers  will  work  hard  to  design  large,  frequent  and  conveniently  located  underpasses  or  overpasses  to  allow  for  the  free  movement  of  farm  equipment,  livestock,  wildlife  and  vehicle  traffic.      Much  of  the  system—at  least  40%  based  on  current  studies—will  need  to  be  elevated  for  environmental  reasons,  and  we  are  carefully  examining  the  possibility  of  elevating  additional  portions  (see  photos  on  page  8).    

Perhaps  most  importantly,  even  sections  that  are  built  “at  grade”  (i.e.,  at  ground  level)  will  be  on  a    “pass-­‐through  berm”.    

If  you  are  a  farmer  or  rancher,  this  system  will  be  built  in  a  way  that  that  will  facilitate  your  ability  to  quickly  and  conveniently  get  where  you  need  to  go.  

   

 

5    

Reality:  Enabling  Community  Access      

We  have  heard  concerns  that  “no  at-­‐grade  crossings”  means  the  project  will  block  roadways.  However,  the  phrase  “no  at-­‐grade  street  crossings”  does  not  mean  that  there  will  be  “no  street  crossings  at  all.”  

Let’s  try  saying  it  another  way—  

Overpasses  and  underpasses  will  provide  easy  and  convenient  roadway  access  along  the  entire  240-­‐mile  length  of  the  system.  

Traffic  flows  for  commuters  and  school  bus  routes  will  often  actually  improve.      

Police,  fire  and  EMS  will  always  have  quick  and  convenient  a  way  to  get  across,  and  will  never  have  to  “drive  10  miles  down  the  road  to  make  a  U-­‐turn  and  head  back”  to  respond  to  emergencies.  

 

   

   

 

6    

Reality:  Support  for  First  Responders      This  project  will  support  local  law  enforcement,  fire  departments  and  emergency  medical  systems  to  prepare  for  emergencies  –  without  burdening  local  taxpayers.  It’s  important  to  note  that  the  Shinkansen  has  an  astonishing,  actual,  real-­‐world  safety  record  of  over  50  years  of  operations  without  a  single  loss-­‐of-­‐life  accident.  

Nevertheless,  prudence  dictates  that  first-­‐responders  along  the  entire  route  be  fully  equipped  and  trained  to  world-­‐class  standards.  

The  railway,  not  taxpayers,  will  fund  all  of  this  “first  responder”  training  and  equipment.  

The  project’s  financial  model  includes  funding  for  just  this  purpose.    

Even  though  we  know  the  system  is  safe  and  it  will  be  rare  indeed  that  these  measures  will  ever  be  employed,  we  must  be  ready  for  any  eventuality.    Thus,  these  highly  trained  and  well-­‐equipped    first-­‐responders  will  always  be  capable  of  responding  in  the  event  of  an  emergency  along  the  rail  corridor.        Importantly,  these  assets  will  also  be  available  to  respond  to  all  incidents  in  the  area,  not  just  those  associated  with  rail  operations,  thereby  benefitting  local  residents  and  communities  along  the  entire  route,  365  days  a  year.  

   

 

7    

Reality:  Property  Values  &  Tax  Revenues      

We  have  received  many  questions  about  the  project’s  impact  on  land  values  and  property  tax  rates.  When  evaluating  these  concerns,  there  is  already  a  wealth  of  information  about  land  values  near  high-­‐speed  rail  corridors  that  reflect  the  experience  of  high-­‐speed  rail  operating  in  the  real  world  today.    We  do  not  have  to  rely  on  conjecture  or  supposition.  

Right  now,  already,  today:    

• Millions  of  people  choose  to  live,  work,  raise  families  and  enjoy  life,  all  while  purchasing,  owning  and  selling  valuable  residential  and  commercial  property  along  existing  corridors.    

• Major  corporations  choose  to  locate  their  corporate  headquarters  adjacent  to  and  in  proximity  to  high-­‐speed  rail  corridors,  precisely  because  of  the  increased  financial  benefit  it  brings  them.  

• A  full  spectrum  of  high-­‐quality  restaurants  and  hotels  choose  to  build  and  serve  a  diverse  domestic  and  international  customer  base  along  and  near  high-­‐speed  rail  corridors.  

In  rural  counties,  the  tax  benefits  that  the  presence  of  a  privately  funded  high-­‐speed  rail  corridor  will  bring  are  dramatic.    

• The  railway  will  pay  taxes  on  its  tracks,  maintenance  facilities,  substations  and  passenger  terminals.    

• The  system  will  become  a  significant  taxpayer  in  the  state,  with  substantial  tax  revenues  flowing  annually  to  benefit  the  state,  local  counties,  school  districts,  hospital  districts  and  other  taxing  entities.  

TCP  will  work  with  local  appraisers  in  both  the  government  and  the  private  sector  to  ensure  we  address  these  concerns  accurately.  

   

 

8    

Reality:  Reason  Report      A  report  by  the  Reason  Foundation—a  respected  free-­‐market  think  tank—is  often  cited  as  proof  that  a  national  high-­‐speed  rail  network  doesn’t  make  sense  in  America,  and  points  out  that  only  two  high-­‐speed  rail  systems  in  the  entire  world  actually  earn  a  profit.  Actually,  we  agree  with  the  Reason  Foundation  report!  

TCP…  

• does  not  believe  a  national  high-­‐speed  rail  system  makes  financial  sense;  

• is  not  part  of  any  plan  for  a  national  high-­‐speed  rail  system;  and    

• has  not  received,  does  not  want,  and  will  not  accept  any  of  the  $8  billion  dollars  the  Federal  Government  designated  for  high-­‐speed  rail  in  the  2009  “stimulus”  plan.  

We  are  confident  that  high-­‐speed  rail  offers  a  superior  travel  alternative  to  current  modes  of  transport  between  Dallas  and  Houston,  and  that  we  can  build  it  entirely  through  private  investment,  and  operate  it  at  a  profit  without  government  subsidy.  

This  project  is  about  connecting  Dallas  and  Houston  using  high-­‐speed  rail.    It  is  not  about  a  national    high-­‐speed  rail  network.  

     

 

9    

Reality:  Ridership  Analysis      Despite  frequent  claims  that  TCP’s  cost  estimates  are  too  low,  and  ridership  and  revenue  assumptions  are  too  high,  that  fact  is  that  TCP  has  never  released  its  estimates  of  construction  costs,  ridership  or  revenues.      That  data  is  proprietary  and  extremely  valuable  business  intelligence,  and  there  are  strict  Securities  &  Exchange  Commission  regulations  regarding  who  we  share  the  information  with  and  how.  

What  we  can  say  is  that  the  numbers  resulting  from  leading  industry  experts  that  have  studied  our  proposals  in  depth  are  conclusive—  

• Ridership  and  revenues  will  be  sufficient  to  finance  construction  and  operations  between  Dallas  and  Houston  from  Day  One  of  operations.    

• This  is  true  even  when  analytical  assumptions  are  subject  to  severe  “sensitivity”  tests,  including  historically  low  oil  prices  and/or  a  significant  reduction  in  either  long  term  population  or  economic  growth.    

• The  project  will  have  more  than  sufficient  ridership  to  cover  operations,  maintenance  and  debt  service  costs.  

 A  public  project,  or  a  public-­‐private  large-­‐scale  infrastructure  project  of  this  size,  would  typically  involve  grant  funding  or  fare  box  subsidy  guarantees  from  the  federal  and  state  governments.    However,  we  want  to  emphasize  that  TCP’s  high-­‐speed  passenger  rail  project  is  as  a  private  sector  endeavor.    As  such,  it  will  not  involve  such  taxpayer  guarantees  and  obligations.    TCP  will  establish,  prior  to  initiating  construction,  and  maintain  during  its  commercial  life  operation,  a  large  reserve  fund  to  address  any  and  all  shortfalls  in  operating  cash  flows  to  ensure  the  financial  sustainability  of  the  project.  

Especially  considering  the  state’s  substantial  population  growth,  we’re  confident  in  Texans’  preference  to:  

• pay  fares  competitive  with  an  airline  ticket;  • get  to  and  from  a  high-­‐end  and  attractively  designed  station  via  whatever  means  they  currently  

use  when  going  to  or  from  an  airport;  • have  flexibility  in  their  boarding  time;  e.g.,  board  at  9:30,  or  if  running  late  at  10:00,  or  if  plans  

change  10:30,  etc.;  • depart  and  arrive  on  time,  no  matter  what  the  weather  is  in  Chicago  or  elsewhere  in  the  national  

aviation  network;  • sit  back  and  devote  their  undivided  attention  to  work  or  relaxation  the  entire  trip;  • travel  without  the  hassle  and  indignities  of  airport  security  or  “middle  seats”;  • avoid  the  hazards  inherent  in  fast-­‐moving  congested  highway  travel;  • arrive  at  the  other  end  in  less  than  90  minutes;  and  • disembark  closer  to  their  final  outer-­‐loop  or  downtown  destination  than  they  would  by  air  travel  

today.    While  the  attraction  of  a  high-­‐speed  rail  system  is  intuitive,  over  four  years  of  studies  and  many  million  of  dollars  of  privately  funded  research  have  corroborated  that  there  is  a  substantial,  unmet,  and  increasing  consumer  demand  for  high-­‐speed  rail  as  a  travel  alternative  between  Dallas  and  Houston.      

Additionally,  according  to  the  Texas  State  Demographer,  populations  in  Dallas,  Houston,  and  along  the  corridor  in  between  are  set  to  double.    I-­‐45  will  NOT  double  in  capacity.    This  will  increase  congestion  dramatically,  along  with  the  risk  of  accidents  or  collisions.    

Perhaps  most  importantly,  project  investors  remain  convinced  of  the  viability  of  this  project.    They  have  seen  the  numbers  and  have  much  at  stake  in  getting  it  right.  

   

 

10    

Reality:  Taxpayer  Protections      Many  people  have  claimed  that  taxpayers  ultimately  will  be  required  to  subsidize  this  project.  The  truth  is  that  this  project  is  a  private  venture,  with  private  investors  putting  their  personal  private  capital  at  risk.  Those  who  invest  their  personal  wealth  don’t  do  so  cavalierly.    In  fact,  skeptical  teams  of  due  diligence  attorneys  and  subject-­‐matter  experts  hired  by  potential  investors  to  independently  analyze  our  findings  have  asked  detailed  and  probing  questions  about  the  project.    

The  result  of  these  “due  diligence”  activities  is  that  investors  continue  to  put  their  own  money  at  risk  because  they  have  seen  the  research  and  the  plan,  and  remain  convinced  that  TCP  can  build  and  operate  this  project  in  a  manner  that  will  provide  a  sufficiently  safe  and  steady  return  in  exchange  for  their  risk.    

The  “discipline  of  the  market”  has  been  and  will  continue  to  be  a  brutally  efficient  judge  of  whether  our  assumptions  are  too  optimistic.  

This  project  is  an  example  of  the  free-­‐market  creating  powerful  incentives  for  investors  to  assemble  accurate  information  to  allow  for  informed  decisions.  

In  the  unlikely  event  that  the  ridership  numbers  do  not  grow  at  the  conservatively  estimated  pace  we  have  assumed,  we  have  included  a  substantial  cash  reserve  fund  to  be  set  aside  prior  to  construction  to  cover  any  potential  operational  losses  during  the  project’s  first  years  of  operation.  

As  a  political  matter,  we  cannot  imagine  a  reasonably  possible  scenario  where  a  majority  of  elected  officials—at  either  the  federal,  state  or  local  level—decide  it  is  in  their  own  political  self-­‐interest  to  raise  taxes,  and  redirect  scarce  transportation  dollars  that  would  otherwise  be  spent  on  roadways,  just  to  rescue  an  unprofitable  high-­‐speed  railway  built  by  private  investors,  who  knew  and  accepted  the  risks  going  into  the  deal.    We  don’t  think  that  would  happen  anywhere  in  America—and  it  certainly  won’t  ever  happen  in  Texas.  

Everyone  involved  in  this  effort  understands  very  clearly  that  we  will  not  accept  taxpayer  subsidies  or  government  bailouts.    We  are  all  quite  comfortable  with  that  fact,  and  assure  Texans  that  this  will  not  change.