March 5th, 2026 – The Texas Transportation Commission has awarded $160.4 million from a newly established state rail fund, with Laredo receiving the largest portion — $58.51 million — for a major transportation corridor improvement.
The funding represents the first round of the Texas Off-System Rail Grade Separation State Fund Program; a $250 million initiative created through Senate Bill 1555. The program is designed to improve rail crossings that are not part of the state highway system but are frequently blocked by long freight trains, creating traffic delays and safety concerns.
The largest award will support the Canadian Pacific Kansas City Limited (CPKC) rail grade separation and safety enhancement project at Santa Maria Boulevard in Laredo, according to reporting from Texas Rail Advocate and Progressive Railroading.
Local officials say the Santa Maria project will remove at-grade crossings along one of Laredo’s busiest transportation corridors. By separating CPKC freight train traffic from roadway vehicles, the project is expected to reduce congestion, improve safety and allow freight to move more efficiently through the region’s critical cross-border trade hub.
Laredo is already one of the busiest rail gateways for U.S.–Mexico trade. Data from the Laredo Economic Development Corp. shows that 213,008 rail cars entered the United States through Port Laredo from Mexico in 2025.
Federal transportation data also ranks Laredo among the top rail connection ports along the U.S.–Mexico border. While rail is not the primary mode of freight transport between the two countries, it still plays a significant role. In 2024, rail accounted for about 11.7% of the total value of cross-border freight between the United States and Mexico.
Trade volumes through Port Laredo continue to grow. Two-way trade reached $354 billion in 2025, up from $339 billion in 2024, according to U.S. Census Bureau data analyzed by WorldCity.
Five projects statewide
In total, the Texas Transportation Commission approved funding for five projects across Amarillo, Houston, Laredo and San Antonio during this initial round of awards.
The projects include:
- $40 million for the Griggs-Long-Mykawa grade separation project in Houston, which is tied to broader Texas Department of Transportation improvements along State Highway 35.
- $36.7 million for a BNSF Railway crossing improvement at South Georgia Street in Amarillo.
- $20.3 million for another BNSF crossing project at Northeast 24th Avenue in Amarillo.
- $5 million for a Union Pacific crossing at Zarzamora Street and Frio City Road in San Antonio.
The Texas Department of Transportation’s rail division presented the project recommendations to commissioners in Austin. Roughly $90 million of the program’s total $250 million budget is being held in reserve as the agency seeks additional federal matching funds to expand the impact of the state investment.
