CEO: Efforts to curb Las Vegas high-speed rail project based on ‘faulty data’

Courtesy XpressWest

An artist’s rendering of a train on the XpressWest high-speed rail line.

The chief executive of the XpressWest high-speed rail project has responded to a letter from two congressional budget committee members calling for the rejection of a federal loan critical to the project, saying the information they have was “formulated using outdated information and faulty data from an organization with a clear bias.”

Anthony Marnell, founder and CEO of XpressWest, in a letter dated today, told House Budget Committee Chairman Paul Ryan and Senate Budget Committee member Jeff Sessions that “there is no more worthy rail transportation infrastructure project in the United States at this time.”

Ryan and Sessions, both Republicans, coauthored their letter March 6, stating that the proposed $5.5 billion loan through the Federal Railroad Administration’s Railroad Rehabilitation and Improvement Financing program is too risky for taxpayers. They called on Transportation Secretary Ray LaHood and the Obama administration to reject the loan.

“The Federal Railroad Administration has the benefit of current, factual information and analysis with which to make an informed decision on XpressWest,” Marnell said in his letter, which also outlined the benefits of the XpressWest project, from relieving traffic on Interstate 15 to providing 80,000 direct and indirect jobs.

Marnell also cited environmental benefits, connecting regional economic centers and laying the groundwork for a high-speed-rail network in the western United States. Marnell said all environmental approvals have been given and the project only awaits the RRIF loan to proceed.

The letter by Ryan and Sessions relies heavily on the analysis of a 70-page report issued last summer by the libertarian Reason Foundation, which said high-speed-rail systems worldwide have been “plagued by optimistic ridership and revenue forecasts, financial losses and capitol (sic) cost overruns.”

A risk analysis within the report says the XpressWest project “entails enormous risks for taxpayers” with “little or no prospect for (this) train to generate sufficient fares and commercial revenues to repay a federal loan of between $5.5 billion and $6.5 billion.”

The XpressWest project is a 185-mile, double-tracked passenger rail line between Las Vegas and Victorville, Calif.

Last year, the company began negotiations with the Los Angeles Metropolitan Transportation Authority to build a 50-mile track extension to Palmdale, Calif., where the line would join the proposed California High-Speed Rail line, effectively providing a high-speed line from Las Vegas to Los Angeles’ Union Station.

The company’s chief operating officer, Andrew Mack, appeared at a meeting of minority contractors last week and said there was no change in the status of the loan application, which was filed with the FRA in December 2010. Company officials have said the lengthy review process is a result of size of the project.

A source with knowledge of the process said the letter is indicative that the loan is close to approval and that it’s designed to become a political diversion to slow the administration’s efforts on high-speed rail. He said funding the project could become a bargaining chip in future budget negotiations.

“We are deeply troubled by the prospects of subsidizing another costly, wasteful and risky high-speed rail project, particularly when our nation is facing a debt crisis that threatens the well-being of the current and future generations of Americans,” the letter from Ryan and Sessions said.

“A nation that is borrowing 40 cents for every dollar it spends cannot afford to risk billions in taxpayer dollars on risky projects like XpressWest.”

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