A French-led consortium chosen to build a high-speed rail system in Texas is facing criticism for lobbying Congress to authorize up to $4 billion of tax-exempt bonds to finance the project.

Texas Railroad Commissioner Bob Krueger, who serves on the state's High-Speed Rail Authority Board, last week accused Texas TGV of backing away from an earlier pledge to build the project with private money.

"If you have one set of statements in courtship and another after marriage, it's likely to guarantee either divorce or conflict," Mr. Krueger. "If [Texas TGV] is trying to back off from what they said early on, it seems to me they'll try to back off something in writing when we do have a signed agreement."

However, officials of the consortium, which was chosen in May to build the $5.7 billion bullet train, said they agreed not to use state funds for the project. Earlier this year, The Bond Buyer reported that the group was lobbying Congress to lift the private-activity bond limits that curb the amount of tax-exempt financing that can be used for the project.

"I believe that before this project is completed we'll see some federal help," said William Agee, chairman of Morrison-Knudsen Corp. of Boise, Idaho, which is heading Texas TGV. "The climate is right."

The consortium has also approached Texas cities about aiding the project with land grants or by using locally issued tax-exempt bonds to finance facilities such as passenger stations for the system.

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