USDOT Suspends Review of Loan Request for High-Speed Rail Project

WASHINGTON — The U.S. Department of Transportation has suspended consideration of a $5.5 billion loan request for a high-speed rail project from Las Vegas to Southern California.

The XpressWest train would travel from Las Vegas to Victorville, Calif., in about 80 minutes. In a later phase of the project, the line could also be extended to Palmdale, Calif. to be connected to the Metrolink commuter rail system and the planned California high-speed rail system.

XpressWest, a private railroad company, estimates that it will cost about $6.9 billion to construct and implement the project. In December 2010, XpressWest had applied for a $5.5 billion loan under the Railroad Rehabilitation and Improvement Financing program - the largest such loan that the transportation department has been asked to consider. An additional $1.4 billion to fund the project is coming from private capital.

Since XpressWest applied for the RRIF loan, the transportation department has held numerous meetings and conferences with the company to address issues with their plan.

But in a letter to XpressWest Chairman Anthony Marnell, 2nd dated June 28, then-Transportation Secretary Ray LaHood wrote that "serious issues persist" with the company's loan request.

Recipients of RRIF loans are expected to buy goods such as steel and iron that are produced in the United States for their projects, but XpressWest was having trouble satisfying the domestic manufacturing requirements. And though a recent XpressWest submission to the government "identified project participants, and suggested a restructured corporate and contracting structure," it didn't provide related documentation, LaHood wrote.

XpressWest said in a statement Wednesday that there is no high-speed manufacturing base in the U. S. and that funds supplied by the transportation department would be used to buy domestically produced construction materials. The company said that it is looking forward to working with new U.S. Transportation Secretary Anthony Foxx and will continue to work with its international partners, who have expertise with high-speed rail.

The rail project has been supported by Sen. Majority Leader Harry Reid, D-Nev. Reid said he plans to discuss XpressWest's loan application with White House officials next week.

"I believe high-speed rail is an important aspect of Nevada and the country's future," Reid said. "In Las Vegas, I-15 to and from California is absolutely clogged and we must do everything we can to make it easy and safe for travelers to visit Las Vegas. But it's also vital we do this right. The Administration has not permanently foreclosed the possibility of such an investment and I remain committed to working with them and with Tony Marnell and XpressWest to secure this vital investment for Nevada."

The RRIF program has generally not been popular among state and local governments because its application process is cumbersome. At a congressional hearing earlier this month, lawmakers said that this program could be more widely used.

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Infrastructure Transportation industry Washington Nevada California
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