Not sure if this is open for general discussion about railroad projects and public-private relationships in such projects, but there is a related discussion going on in Colorado.

The historical railroad routes in the western U.S. were from east to west, because they were used to move manufactured goods to the undeveloped western areas (like Colorado) and raw materials and agricultural products to the big cites back east. Nowadays there is a huge amount of coal traffic ("death trains") that travel mostly from Wyoming to Texas.

A few lines ran north-south, primarily the old D&RG and UP lines that hug the front range of the Rocky Mountains in Colorado. They originally carried both passengers and freight. Nowadays there's no passenger traffic, and the freight trains carrying coal, chemicals, and general freight pass right through the middle of the big cites in Colorado, including Pueblo, Colorado Springs, Denver, and Fort Collins. Fort Collins is perhaps the worst case, because the city was literally built around the railroad line and the tracks still go right down main street.

Anyway, a proposal is out there to build some new tracks out on the dry, flat eastern Colorado prairie that would connect the required existing lines so that the freight traffic could be re-routed to avoid the front range cities. This would be good on several counts: Shorter freight trip, less hazard of accidents in populated areas, less noise, and the tracks through the cities would become available for passenger traffic.

The proposed financing system is to be a public-private arrangement. I can't judge whether this is good or bad in this case, but the real hangup is that the eastern farmers don't want to give up their land. Politically it's a mess. Here's a relevant website if anybody's interested...  :-)

http://www.dot.state.co.us/RailroadStudy/FAQ/default.asp