Report: Las Vegas–CA bullet train would generate $1B in annual revenue by 2035, updated 5/24/2017

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Dive Brief:

  • A San Bernardino, CA-based High Desert Corridor Joint Power Authority-commissioned study has found that a high-speed train between Las Vegas and Southern California would draw 11 million riders and $1 billion in annual revenue by 2035, according to the Las Vegas Review-Journal.
  • The JPA used the stalled $8 billion XpressWest line between Las Vegas and Palmdale, CA, for its analysis, which would connect riders to the California high-speed bullet train now under construction. The Las Vegas line is expected to serve 3 million riders and generate $300 million in yearly revenue when complete in 2021.
  • In June, XpressWest terminated a partnership with a Chinese backer, reportedly because the company could not secure approvals for its Chinese-made trains to be used in the U.S. Xpress hasn’t indicated whether it has a found a replacement investor

Dive Insight:

XpressWest’s original timeline had construction starting in fall of 2016, but the company pushed it back to early this year. Building has not yet begun, and XpressWest has not yet issued a revision to its schedule. The JPA based its findings on the ability of XpressWest to have the Las Vegas-Southern California rail system fully operational by 2035.

China Railway International originally intended to contribute $100 million to the rail project, reportedly in an effort to expand its operations outside of China as the market growth for high-speed rail in that country has slowed. However, XpressWest said last year that even though the U.S. requires trains to be domestically manufactured in order to obtain regulatory approval for rail lines, “there are no high-speed trains manufactured in the United States.” The company cited that hurdle as a major impediment to the progress of high-speed rail development in the U.S.

High-speed rail has been slow to pick up steam in the U.S. for several reasons, as experts point to Buy America and a general cultural resistance from Americans who still rely on automobiles for the majority of their transportation needs.

The JPA study is also contingent on the California High Speed Rail Authority getting its system up and running as planned. That rail project, however, has encountered more than its share of logistical, scheduling, cost and public relations problems as it tries to build up momentum. In fact, it postponed construction for its Southern California route in favor of an inaugural northern route so that it could expedite completion. The latest roadblock is a lawsuit targeting the project’s funding procedures.

Critics of the rail line argue that the CHSRA is using bond money for work that was not detailed in the voter-approved financing measure. This work includes electrification of an existing line that the bullet train will eventually share. In addition to the lawsuit, funding for the rail has been delayed, putting matching federal dollars at risk.

Source: constructiondive.com, AUTHOR Kim Slowey

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