XpressWest, the private company proposing to build a high-speed rail line between Las Vegas and Los Angeles, announced June 8 that it had terminated its joint venture with China Railway International, less than nine months after the deal was announced.
Las Vegas-based XpressWest said the decision to terminate its relationship with the consortium of Chinese firms stemmed from problems with “timely performance” and challenges that China Railway faced “obtaining required authority to proceed with required development activities.”
Privately financed XpressWest was started by Las Vegas developer Marnell Companies. It formed the joint venture last September, infusing $100 million into the project. XpressWest had expected to break ground as soon as this year.
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The announcement is a blow to China, which has built the world’s largest high-speed rail network in less than a decade. The XpressWest project was seen as a foothold into a burgeoning US high-speed rail market and an opportunity to showcase China’s technology. XpressWest’s chief executive, Tony Marnell, said in a statement that his company’s “ambitions outpace CRI’s ability to move the project forward timely and efficiently.” The company will now aggressively pursue other development partnerships and options. Marnell said the company’s biggest challenge has been a federal funding requirement that high-speed trains be manufactured in the US, even though no such trains are produced in the country.
“This inflexible requirement has been a fundamental barrier to financing high-speed rail in our country,” Marnell said. “Is our leadership going to force projects throughout the United States to seek financial support for infrastructure in our country from foreign governments?” XpressWest said it was anticipating the completion of environment work to develop the Southern California portion of the rail line, with environmental approvals expected by September.
XpressWest is one of at least three privately financed high-speed trains proposed to be built in the US over the next few years. Companies in Texas and Minnesota also plan to tap private cash from investors globally, with help from foreign train makers and governments eager to export train technology.
The projects rely primarily on partnerships with Japanese or Chinese firms that face saturated train markets at home.