Xpress West drops rail venture with China firm

XpressWest has terminated its joint venture with China Railway International USA Co Ltd (CRI) to build a high-speed passenger railroad connecting Los Angeles to Las Vegas, citing US government insistence that the train cars be manufactured in the United States.

In September 2015, XpressWest, a private company backed by hotel developer Marnell Cos of Las Vegas, and CRI announced a joint venture activities intended to advance the work already completed by XpressWest.

XpressWest selected CRI to assist developing, finance, building and potentially operating the XpressWest rail project connecting Las Vegas to Los Angeles (the "Southwest Rail Network"), with stations also in Victorville and Palmdale, California.

The statement said "the decision to end the relationship was based primarily upon difficulties associated with timely performance and CRI's challenges in obtaining required authority to proceed with required development activities."

"The team at XpressWest is optimistic CRI and its affiliates will one day succeed in establishing a viable presence in the United States rail market, however, our ambitions outpace CRI's ability to move the project forward timely and efficiently," XpressWest CEO Tony Marnell said in a statement.

"XpressWest is undeterred by this development and remains dedicated to completing its high-speed passenger rail project. XpressWest will now aggressively pursue other available development partnerships and options expected to result in a more efficient and cost-effective project implementation experience," he said.

XpressWest is anticipating the completion of the final environmental work required for the development of the line connecting the project to Los Angeles through Victorville and Palmdale.

The environmental approvals for the Victorville-Palmdale segment are expected by September.

XpressWest, the High Desert Corridor Joint Power Authority, California High Speed Rail Authority, San Bernardino County and Los Angeles County Metropolitan Transportation Authority also are expecting the completion of the jointly funded Southwest Rail Network ridership study no later than August.

The ridership study is a prerequisite for regulatory and financing activities.

"Our biggest challenge continues to be the federal government's requirement that high-speed trains must be manufactured in the United States. As everyone knows, there are no high-speed trains manufactured in the United States. This inflexible requirement has been a fundamental barrier to financing high-speed rail in our country," the statement said.

"For the past 10 years, we have patiently waited for policymakers to recognize high-speed rail in the United States as a new enterprise and that allowing trains from countries with decades of safe high-speed rail experience is needed to connect the Southwest region and start this new industry.

"After the environmental work connecting Palmdale to Victorville is completed, we intend to renew our request for support from the Federal Railroad Administration and are hopeful policymakers in Washington DC will allow the Federal Railroad Administration to adopt a more flexible and realistic approach to support high-speed rail.

"The bottom line is XpressWest is ready to go, and we are excited to bring true high-speed rail to our country. The real question is: Do those in Washington DC have the courage and vision to proceed, or is our leadership going to force projects throughout the United States to seek financial support for infrastructure in our country from foreign governments?"

XpressWest is one of at least three privately financed high-speed trains proposed to be built in the United States 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.

Reuters contributed to this story.

hengweili@chinadailyusa.com