Laredo Secures US$58.5 Million for Santa Maria Rail Project

Laredo secured US$58.5 million from the Texas Transportation Commission for the Santa Maria Rail Grade Separation Project, the largest award in the state’s first round of rail-crossing grants. The project will separate trains from roadway traffic to improve safety, reduce congestion, and speed freight movement through a key border logistics corridor.

The City of Laredo won a major rail-and-road infrastructure boost after the Texas Transportation Commission awarded US$58.5 million for the Santa Maria Rail Grade Separation Project, the largest single allocation in the state’s first round of grants under a new rail grade-separation funding program.

City officials say the project will tackle one of Laredo’s most persistent bottlenecks: at-grade rail crossings where long freight trains and heavy vehicle traffic intersect at street level, creating safety risks, delays, and congestion along a key corridor into and around downtown.

The Santa Maria award is part of a US$160.4-million fund distributed across five projects statewide in the inaugural call of the Texas Off-System Rail Grade Separation State Fund Program, according to Texas Rail Advocates.

Laredo sits at the center of US–Mexico trade, and any disruption on its surface street network quickly ripples into cross-border logistics. The Santa Maria project aims to eliminate at-grade crossings by building a grade-separated structure, typically an overpass or underpass, so trains and vehicles no longer compete for the same intersection.

Local leaders say the impact will go beyond smoothing commutes. Officials and stakeholders cited four core outcomes:

• Improved safety by separating trains from cars and pedestrians

• Reduced traffic congestion caused by blocked crossings

• Faster freight movement by cutting delay time for trucks and local deliveries

• Potential progress toward quiet zones, which can limit routine locomotive horn use if upgraded safety criteria are met

Mayor of Laredo Victor Treviño says the funding arrived at a critical point for the city’s growth, while District VIII Councilmember Alyssa Cigarroa framed it as a long-overdue investment in one of the city’s oldest and most vital corridors into downtown.

The Santa Maria grant comes from a new state initiative created by Senate Bill 1555, which established the Texas Off-System Rail Grade Separation State Fund Program. TxDOT says the program is designed to support grade separation projects that improve public safety, support economic development, and reduce traffic congestion, especially where crossings are off the state highway system but still heavily used.

TxDOT notes that the Texas Legislature allocated US$250 million to the program through a supplemental appropriation.

A key feature is the local match requirement: eligible local entities must contribute at least 10% of total project costs to qualify for state funding.

Texas Rail Advocates report that, after awarding the first US$160.4 million, TxDOT plans to hold roughly US$90 million in reserve while it seeks to pair state dollars with matching federal funds, aiming to stretch the program for additional projects.

For Laredo, the award sets the stage for a more complex phase: advancing engineering, stakeholder coordination, and community engagement. Cigarroa says the city intends to host community meetings with neighborhoods directly affected as planning moves forward.

The Laredo Economic Development Corporation also highlights the project’s broader value proposition, reducing local traffic impacts while enabling freight efficiency and improving safety, pointing to the importance of public-private coordination in a corridor shaped by both community needs and cross-border trade flows.

Statewide, the Texas Transportation Commission’s first slate of awards signals a more aggressive push to remove chronic rail-crossing choke points in major freight metros and trade corridors. Besides Laredo, other beneficiaries in this first round include Amarillo (two projects), San Antonio, and Houston.