SAN ANTONIO – Union Pacific sent a letter to the Lone Star Rail District chairman on Tuesday terminating their nearly seven-year long agreement to work on feasibility studies for the Lone Star rail line. The plan would have run commuter trains on existing UP lines along with adding bypass freight rail lines between Taylor, Seguin and San Antonio.

“This announcement by UP was a surprise to me and I've talked to the Lone Star rail management and it was a surprise to them as well,” said San Antonio District 9 Councilman Joe Krier. “We've got to do this. We've got hundreds of thousands of people traveling on 35 every day and it is choked. In another 10 years it'll take longer to drive from San Antonio to Austin than it did before the interstate highway was built.”

Bexar County Judge Nelson Wolff believes a major issue that’s rarely discussed is the cost of added rail lines and who is going to pay for it.

“You've got to remember, this is almost 15 years later now, and we still don't have one nickel to build the train track with,” said Wolff. “It never was real clear from the very start whether Union Pacific was willing to pay for anything. It's a lot of talk but no definitive agreements.”

Wolff said one cost-saving solution is the right of way around SH 130, the toll road that has seen lower than expected use east of San Antonio and Austin. That right of way could save millions in a project he estimates will cost over $2 billion.

“I know they're doing a study with wide swaths of land and where it could go but now you're going to have to buy the right of way,” said Wolff. “That's a hell of a lot more expensive than being able to run on the Union Pacific track.”

“It would be a public-private partnership from the get go,” added Krier. “The challenge is how do you put together the recipe so you have a cake when you pull it out of the oven?”

Lone Star Rail officials have asked for a meeting with UP executives but a date has not been set.