High Speed Rail

Ailing China Set to Blow More Money on High-Speed Train to Vegas

Did they run out of overpriced, unnecessary projects in their own country?

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Somebody's about to lose all his chips.
XpressWest

Zombie Train! No, it's not a really bad SyFy network movie. Though it is apparently both a free online game and a Halloween "haunted house" concept in California.

The zombie train we're referring to, though, is the proposed high-speed rail line from Las Vegas to "Los Angeles" (scare quotes because it doesn't get anywhere near to Los Angeles, but we'll get to that).

Reason has previously written about this effort by XpressWest, a company owned by a Las Vegas hotel and casino developer, to build this train, paid for by a $6.5 billion federal loan. The Reason Foundation (the non-profit that publishes this site and Reason magazine) investigated the company's business model and blasted it for absurdly overoptimistic operation assumptions. In 2013, their federal loan submission was rejected (technically "suspended") and while the company promised to soldier on, that seemed to be the end of it.

The bad news is that it is now apparently back from the dead. Is there good news? Possibly. Apparently they've convinced the government of China to invest in building the train, saving American taxpayers from having to bankroll this boondoggle. From Bloomberg:

A China Railway Group-led consortium and XpressWest Enterprises LLC will form a joint venture to build a high-speed railway linking Las Vegas and Los Angeles, the first Chinese-made bullet-train project in the U.S. 

Construction of the 370-kilometer (230-mile) Southwest Rail Network will begin as soon as next September, according to a statement from Shu Guozeng, an official with the Communist Party's leading group on financial and economic affairs. The project comes after four years of negotiations and will be supported by $100 million in initial capital. The statement didn't specify the project's expected cost or completion date.

The agreement, signed days before President Xi Jinping's state visit to the U.S., is a milestone in China's efforts to market its high-speed rail technology in advanced economies. The country has been pushing the technology primarily in emerging markets—often with a sales pitch from Premier Li Keqiang– as a means to project political influence. A $567 million contract last October to supply trains for Boston's subway system was China's first rail-related deal in the U.S.

There's no byline on the Bloomberg piece, which suggests this is just information being passed along without any sort of analysis, or even so much as a Google search of the project's history. A writer over at Quartz looked at the Chinese media coverage of the announcement and noticed that the project was expected to cost $12.7 billion, which is almost double the price tag they had claimed when they were trying to get money from the United States.

Neither Quartz nor Bloomberg actually looked at train's plans of operation, simply repeating that it goes from Los Angeles to Las Vegas. It doesn't get anywhere near Los Angeles, actually, and that's one of the train's big problems. The California end of the line is outside of Victorville, an 80 mile drive from Los Angeles, a trip that can take 90 minutes or more, depending on traffic. In order to "save time" taking the 80-minute train to Las Vegas, Los Angeles residents would have to drive essentially a third of the way there in the first place, then transfer to a train. And the part of the trip SoCal residents would have to drive is the part with the worst traffic.

Remarkably, XpressWest claims this awkward system would reduce traffic from Interstate 15 (the highway between Los Angeles and Las Vegas) by 25 percent or more. Meaning one of out every four travelers would take their train instead. This is a crazy contention. As the Reason Foundation noted, such projections mean this tourist train would carry four times the number of passengers as the Amtrack's Acela trains between Washington, D.C., and New York City.   

But, hey, if the Chinese government is going to bankroll it, let them try. Maybe I'll end up eating crow, and people actually will use it. But don't expect me to go looking up recipes on Pinterest just yet. XpressWest hasn't updated its "milestones" section of the site in three years. But it does now have a button to translate the pages into Chinese!

But China is having some economic problems these days (which, weirdly, are also not mentioned in these stories). If this train does fail (as it likely will), it would be yet another example of the country blowing money on infrastructure needs that don't actually exist and have no demand, like its creepy ghost cities and malls.