CARSON CITY, Nev. — A project to link Las Vegas and Southern California with a high-speed train got a boost this week when the newly formed Nevada High-Speed Rail Authority approved an exclusive relationship with long-suffering XpressWest.
The panel's move Wednesday to select the company as a franchisee — and sideline other futuristic yet far-fetched transportation concepts floated to the group — adds a layer of government legitimacy to the endeavor that could help it attract investors and get closer to breaking ground. But with no state dollars attached, the decision doesn't directly address the project's most glaring missing link — billions of dollars.
"Obviously the biggest obstacle is still funding and this decision doesn't affect the funding," said Steve Hill, director of the Governor's Office of Economic Development.
Las Vegas-based XpressWest has been working since at least 2005 to secure the complicated government clearances it needs to build a 185-mile rail line between Sin City and Victorville, a city east of Los Angeles in California's high desert. The planned, zero-emissions train would at least halve the travel time between the two cities, down to 80 minutes, and would cost less than $100 round-trip.
Eventually, the line would extend 50 miles west to Palmdale, where it would connect with metro lines and the future California High-Speed Rail line stretching north to the Central Valley. Proponents say it could divert 25 percent of car traffic off Interstate 15 and onto the rails, potentially saving 8.5 million gallons of gas each year.
Efforts to finance the $8 billion endeavor suffered a major setback in 2013, when the government stopped considering a $5.5 billion loan to XpressWest. Part of the holdup was that the planned railroad didn't use enough American-made products — a difficult task because, generally, all bullet trains are made overseas.
Republicans in Congress also raised concerns that the train wouldn't make enough money to repay the loan.
Now, the stalled project could get new life through a partnership with a Chinese firm that was announced in September. While the company has said it has $100 million in initial capital, it's not clear how much money in total the partnership would bring, and officials at the railroad declined an interview request.
Getting the rail authority's blessing Wednesday can't hurt, especially among investors in China, where governmental approval carries even more weight.
"It sends a strong message to them that it's a serious project," said transportation strategy expert Tom Skancke.
Critics have been skeptical that Southern Californians would drive their cars to a station well outside Los Angeles, then take a train that leaves them car-less and cab-dependent in Las Vegas. But proponents believe it will open up a flow of tourism that's currently limited by bottlenecks on Interstate 15. They say people should take a long view on the project.
"It took 50 years to build the interstate highway system. It was built in segments and phases and miles," Skancke said. "It will go to L.A., but It won't go to L.A. in phase one."
XpressWest's project comes against the backdrop of a pricey and increasingly unpopular high-speed rail project in California, which is partly funded by $10 billion in bonds taxpayers approved in 2008. The project is facing lawsuits and is behind schedule, and the price tag has ballooned to $68 billion, driven by the complex task of boring tunnels through earthquake fault-laden mountains in Southern California.
But in Nevada, taxpayers will have no financial skin in the game if XpressWest's plan flops. The state's rail authority has no money to give, although it could help facilitate bonds if another government entity spearheads an effort.
XpressWest told lawmakers this spring that it wants to be a privately funded venture, meaning it won't have to convince the legislature or Congress. However, it will need to sell the dream of zipping through the desert at 150 mph to a wide-enough base of investors.
"I am optimistic. I do believe it's going to happen," said Tina Quigley, chief of the Regional Transportation Commission of Southern Nevada and a rail authority board member. "I can't stand to think that I-15 has no potential growth ... I have to believe it for the health of southern Nevada."