California Approves $3.2 Billion Bond For High Speed Train To Nowhere
The high speed train is dead, long live the high speed train.
Less than a year after California Gov. Gavin Newsom brought California's dreams for a LA to San Fran bullet tra…
California Approves $3.2 Billion Bond For High Speed Train To Nowhere
The high speed train is dead, long live the high speed train.
Less than a year after California Gov. Gavin Newsom brought California's dreams for a LA to San Fran bullet train crashing down, when he said in February that he is ending the state’s hugely expensive and hopelessly quixotic high-speed rail line fiasco (which would have been completed in 2033 at a staggering cost of $77 billion), California is about to unleash another high speed train project, and this one is even more idiotic.
The California Infrastructure and Economic Development Bank (IBank) has authorized a $3.2 billion tax-exempt, fixed-rate revenue bond issuance to help DesertXpress Enterprises, an affiliate of Virgin Trains USA, build a high-speed train from Victorville, California, to Las Vegas. The new XpressWest service, at speeds of up to 180 miles per hour, will take about 90 minutes one way.
There is just one problem: Victorville, located in SoCal's high desert, is quite literally in the middle of nowhere.
More on that in a second.
DesertXpress will be able to use the money to pay for the 135 miles of the project located within the state of California. This, according to ConstructionDrive, includes the costs of design, development, construction, operation and maintenance of the rail system itself; a passenger station; a maintenance facility; train cars; and electrification infrastructure. DesertXpress will also be able to use the bonds, which are sponsored by the California county of San Bernardino, to establish a debt service reserve fund, as well as pay for interest and other bond-related expenses. While total spending is listed at around $4.8 billion, "hard construction costs" are $3.6 billion.
Construction, which is expected to begin in the second half of 2020 and wrap up in 2023, according to an IBank staff report, will generate more than 15,800 temporary construction jobs.
That's the good news. The bad news is... what the hell are they thinking?
In theory, it's not a terrible idea: California has for decades sought to find a fast path between Los Angleles and Las Vegas. In practice, the fact that the train runs to Victorville assures that the project is DOA.
The XpressWest between California and Las Vegas, according to the IBank staff report, will take about half the time of a car trip, but Randal O'Toole, a senior fellow at the Cato Institute, thinks that there simply won't be enough potential passengers — at least enough to make the new bullet train a success.
"If you're driving from Los Angeles to Victorville, by the time you get there, you're pretty much halfway to Vegas," O'Toole said, "so why would you stop and leave your car somewhere and take a train and then have to walk to wherever your destination is — or take a cab or an Uber or Lyft — when you can just drive your car there?"
Click the link below for the full article from ZeroHedge.
https://www.zerohedge.com/markets/california-approves-32-billion-bond-high-speed-train-nowhere
