Taxpayers Railroaded

Proposals for high-speed rail to carry tourists from Southern California to Las Vegas are not new, but XpressWest’s plan appears to be an especially risky gamble.

The company is looking for a $6.5 billion federal loan to build the rail line, the western end of which would be near Victorville, California, 80 miles from Los Angeles. Southern Californians would have to drive through a significant amount of traffic, covering a distance equal to one-third of the ride to Las Vegas, before parking and boarding the train.

An August report from the Reason Foundation (which publishes reason) noted that the market for such a train is extremely speculative and that the company’s study is years out of date, relying on tourist traffic estimates that turned out to be overly optimistic. XpressWest claims the train will divert 25 percent of the traffic from Interstate 15 between Victorville and Las Vegas. The study estimates that the train’s ridership will be 39 percent to 70 percent lower than XpressWest’s forecast, which would make a default on the federal loan likely.

In October the Reason Foundation published a follow-up analysis, examining typical holiday highway congestion during the Labor Day weekend. Even at peak congestion, it said, a would-be gambler probably would save less than an hour in transit.