Updated 

Prospects dim for high-speed rail link for L.A., Vegas


The romance of the rails has been knocked off the tracks by reality.

Since Amtrak halted its Desert Wind passenger train to Los Angeles in 1997, different groups have floated replacement proposals that tourists in Las Vegas’ biggest market would find attractive compared with flying or driving Interstate 15.

Even before then, several ideas cropped up to improve Amtrak’s chronically late and sparsely used trains.

But when outgoing Transportation Secretary Ray LaHood pulled the plug on the $5.5 billion federal loan application on XpressWest, the bullet train planned to run between Las Vegas and Victorville, Calif., the vision of any passenger service went with it.

On June 28, La Hood sent a letter to Anthony Marnell II, chairman of DesertXpress Enterprises, saying the company had not complied with the Buy America provisions necessary to secure the taxpayer loan to build its XpressWest train.

“After several years of engagement with no resolution to the threshold issues addressed in this letter and the significant uncertainties still surrounding this project, we have decided to suspend further consideration of XpressWest’s loan application,” LaHood wrote.

However, XpressWest kept the rejection quiet until congressional opponents of taxpayer financing made it public. According spokeswoman Catherine Levy, XpressWest somehow interpreted LaHood’s words to mean that the loan application was still alive. Then again, when concerned about potential unfavorable publicity early this year, Levy said XpressWest executives had just attended meetings in Washington, D.C., that left them encouraged about the loan’s prospects.

For its part, XpressWest has kept up a brave front, hoping that new Secretary Anthony Foxx will see things differently. In a July 17 statement, it proposed some sleight-of-hand accounting that would spend the loan money only on American-made materials, while reserving private investor money, estimated at $1.4 billion, for things made overseas.

Further, the statement said that XpressWest would “continue to work with” an international group of companies “expert at developing, constructing, operating and financing high-speed rail projects.” Who they are, what they would do and the sources of the all-important money remain mysteries.

That sounded amazingly similar to defiant statements four years ago that emanated from a group promoting a magnetic levitation train from here to Los Angeles. At that time, Sen. Harry Reid had switched his support from it to XpressWest and cut off federal funding. The mag-lev has since all but disappeared.

Even if the Buy America obstacle is somehow finessed away, the much more intractable financing issues remain. For starters, the price tag for XpressWest has doubled in the past five years to $6.9 billion at last count, and that was before even one spike had been purchased.

Further, bullet trains have an international history of not generating enough revenue to pay for construction, as detailed in the Las Vegas Review-Journal in February 2012. A subsequent report by the Congressional Research Service came to the same conclusion, a not-so-trivial detail considering that XpressWest wants a loan, not a grant.

Reid had said before the rejection that the federal government wanted to trim the size of the loan, but that XpressWest was having trouble coming up with more private financing to fill the gap. Of course, XpressWest never publicly identified who would come up with the announced $1.4 billion, which would have amounted to a blank check because so many of the terms — such as length, interest rate and repayment priority — were blank.

Over the past year, XpressWest has tried some PR fixes, such as adopting that name to convey the impression that it was a key link in a Western rail system rather than a stand-alone tourist train. The company executives also obtained support from the Los Angeles Metropolitan Transit Authority to build a link from Victorville to a different line going to downtown Los Angeles, termed a “game changer” by cheerleaders masquerading as journalists.

But nothing could detract from numbers that simply don’t work, never mind the questionable assumption that millions of people a year would get off I-15 mid-trip to board a train.

In that regard, XpressWest joins Amtrak, the mag-lev, a different concept to run bullet trains south from Las Vegas to a desert juncture that would go to either Phoenix or Los Angeles and a company touting premium-service conventional trains as producing nothing that anyone can ride.

The latter proposal even reached a $56 million agreement with Union Pacific to rework its freight tracks to accommodate passenger trains and eliminate the bottlenecks that plagued Amtrak on half the route. Unfortunately, Las Vegas Railway Express, the company pushing the idea, has never accomplished anything except to put out announcements that might move its penny stock and miss proposed start dates.

In sum, the only viable solution to congestion that occasionally afflicts stretches of I-15 through the desert is to widen it.

 

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