A Nevada company that wants to build a multibillion-dollar high-speed passenger rail line between Las Vegas and southern California has broken ties with a Chinese firm that it had said would help.
XpressWest on Wednesday said in Las Vegas that it terminated a joint venture with China Railway International USA Co (CRI, 中鐵國際集團), a company formed in August last year for the effort, because CRI had trouble meeting performance deadlines and “obtaining required authority to proceed.”
“Our ambitions outpace CRI’s ability to move the project forward timely and efficiently,” XpressWest CEO Tony Marnell said in the statement.
Marnell, a Las Vegas-area developer, declared the company “undeterred by this development,” and dedicated after 10 years of work to completing the project.
“Our biggest challenge continues to be the federal government’s requirement that high-speed trains must be manufactured in the United States,” a company statement said. “As everyone knows, there are no high-speed trains manufactured in the United States.”
The Chinese consortium includes China Railway Corp (中國鐵路) and China Railway Engineering Corp (中國鐵路工程).
XpressWest is “precipitate and irresponsible” in making the statement while its talks with CRI were still ongoing, Xinhua news agency reported, citing a manager of the Chinese group responsible for the venture.
The unilateral announcement violated the cooperation framework agreement signed by the two sides, it cited the manager as saying.
Operating as DesertXpress, project backers appeared close in 2013 to receiving a US$5.5 billion federal loan before political opposition and the US-made requirement scuttled financing.
The project has not broken ground, but it has regulatory approval to cover about 306km from Las Vegas to the Mojave Desert city of Victorville, California.
Cost estimates have topped US$7 billion.
The firm said it expects to have ridership projections by August, to meet regulatory and financing requirements, and to obtain environmental approvals by September.
The project needs further government permission to connect with southern California’s population centers, including Los Angeles.
Additional reporting by Bloomberg
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