Dive Brief:
- Officials of a planned Los Angeles-Las Vegas high-speed rail system have announced that they have abandoned a deal with Chinese partner and financial backer, China Railway International, because the foreign rail company could not overcome the requirement that high-speed trains be manufactured in the U.S., The Los Angeles Times reported.
- XpressWest said CRI was set to provide capital of $100 million for the 185-mile route as part of its push to expand outside of China.
- Officials from the private U.S. company said they will "aggressively pursue" other partners to make the route happen and are even considering expanding the system to include two additional stops.
Dive Insight:
XpressWest pointed out that while the U.S. requires domestically manufactured trains in order to gain regulatory approvals, "there are no high-speed trains manufactured in the United States." Therefore, the company said, the "inflexible requirement" has proven to be a major obstacle to the implementation of light rail in this country.
Last month, Reuters reported that U.S. high speed and light rail developers were increasingly seeking private investors to back their projects because government funding came with too many strings attached, from financial oversight to the potential fallout of unreliable political winds. Reuters also said that developers in Minnesota, Texas and Nevada are forming partnerships with Japanese and Chinese train manufacturers.
The planned Los Angeles-Las Vegas rail project isn't the only high-profile rail plan to face obstacles recently. The state of California invested $10 billion in a $64 billion bullet train project and has been putting pressure on the authority ever since a Los Angeles Times investigation determined that it had not been completely upfront with legislators about the cost and feasibility of the project. Since The Times made the results of its inquiries public, the state Legislature has held several special hearings and inquiries into the system's operational capabilities.
