Proposal for proposed $6.9 billion high-speed rail project hits snag

WASHINGTON — Plans for a high-speed train connecting Las Vegas and Southern California have hit a money snag, Sen. Harry Reid said Tuesday.

Reid, D-Nev., said backers of the XPressWest project are struggling to come up with funding to enable approval of a $5 billion government loan. Federal backing would make up the bulk of the $6.9 billion rail plan.

“We’ve had a few setbacks. We are still working hard on it,” Reid told reporters when asked about the status of the project after a meeting of Nevada’s members of Congress.

The Federal Railroad Administration has been weighing an application for a
$5.5 billion loan since December 2010, when the project was known as Desert XPress.

Since then, the project has been rebranded to reflect its investors’ desire to stretch high-speed rail to other Western cities. XPressWest signed an agreement in June with the Southern California transit authority that would extend the western end of the line from Victorville to Palmdale, about 50 miles closer to Los Angeles.

The principal developer of XPressWest is Tony Marnell, chairman of the Marnell Companies, a design and contracting firm that helped build such Strip resorts as The Mirage, Bellagio, Treasure Island and Wynn.

In a statement late Tuesday, XPressWest said the project “meets the requirements for and fulfills the objectives of the loan program.”

“Because our privately owned railroad is a first of its kind, we understand and expect that the federal government needs to perform a thorough analysis of our project and the loan request,” the company said. “We are committed to continuing to cooperate with federal authorities through the conclusion of the review process.”

Reid, the Senate majority leader, who has been the project’s most powerful booster, said the Federal Railroad Administration has agreed to a loan of almost $5 billion.

“It’s a big project,” he said, adding “the developer is trying to come up with enough money to make the project feasible, and he is struggling to do that.”

Reid said he spoke with Transportation Secretary Ray Lahood several weeks ago, and “there is light on the horizon, so we are still working on it.” He did not elaborate.

XPressWest envisions laying 185 miles of track between Las Vegas and Victorville, along which electric trains would whisk travelers at speeds up to 150 mph to and from Southern Nevada.

Boosters say train ridership would relieve traffic pressure along Interstate 15 connecting Las Vegas and Southern California, in turn encouraging more truck commerce on the highway.

Along the way, they say the project as envisioned would create thousands of jobs and $7.8 billion in economic benefits to the region.

Reid and Sen. Dean Heller, R-Nev., with Marnell, fought off criticism last month that a multibillion-dollar government loan to XPressWest might turn into a bad gamble.

Sen. Jeff Sessions of Alabama and Rep. Paul Ryan of Wisconsin, two Republicans who are senior members of congressional budget committees, urged LaHood to reject the loan application.

“The risks to the taxpayers from financing this project are untenable,” they said in a letter to the Transportation secretary.

The GOP lawmakers cited a report from the Congressional Research Service that said “few if any” high-speed rail projects have earned enough money to cover costs.

Another report they cited, from the libertarian-leaning Reason Foundation, questioned whether the rail line could generate enough fares and other revenue to cover construction and operating expenses.

Marnell said the Reason Foundation report was faulty and politically biased against the project. Reid blamed “Tea Party-driven ideology” for trying to limit federal investments in infrastructure.

Contact Stephens Washington Bureau Chief Steve Tetreault at or 202-783-1760. Follow him on Twitter @STetreaultDC.

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