Brightline SoCal rail project still on track despite financing, cost issues

Dive Brief:

Despite a financing hiccup and rising costs, construction on Brightline West's high-speed train between Southern California and Las Vegas is set to break ground in the second quarter of this year, according to a letter from the rail company to the Nevada High-Speed Rail Authority. Previous estimates had the cost of the rail at almost $5 billion, but the most recent estimates have jumped to $8 billion.
After owner Fortress Investment Group failed to sell enough bonds by a Dec. 1, 2020 deadline, Sarah Watterson, president of Brightline West affiliate DesertXpress Enterprises, said the rail company will initiate another bond sale this year and provide more equity for the project as the economy recovers from the COVID-19 pandemic.
Despite the failed bond sale, the Brightline project, according to Watterson, achieved several milestones last year, including execution of primary right-of-way; design and construction agreements with Caltrans and the Nevada DOT; and a contract with Siemens Mobility to supply Velaro trainsets, as well as for the design and construction of the signaling, communications, and electrification systems.

Dive Insight:

Brightline West is the most recent iteration of what was previously known as Virgin Trains USA, which was backed by billionaire investor Richard Branson’s Virgin Group Ltd. He exited the project in 2020, and the current re-branding is aimed at associating the enterprise with the Florida Brightline route between Miami and West Palm Beach.

Brightline West is targeting the passengers who make 50 million trips between Los Angeles and Las Vegas each year.

Brightline West's most recent route information has the primary 169 miles connecting Victor Valley, California, and Las Vegas. The rail company will also connect Victor Valley southwest to Rancho Cucamonga, California, via a 90-mile line and northwest to Palmdale, California, via a 65-mile line. Both Palmdale and Rancho Cucamonga have links to Los Angeles Union Station.

In the letter to the Nevada authority, Watterson mentioned that Brightline in Florida completed a successful $950 million bond sale in December 2020 and said this was indicative of an interest in intercity passenger rail and "improving market conditions," factors that seem to bolster Brightline West's expectations of a successful sale for the Las Vegas line.

In addition to taking advantage of the post-pandemic recovery, construction of the line would also contribute to that recovery if Brightline West's numbers are correct. The rail company estimates that the project will: