Xpress West

[The Davy Crockett]

Have you checked out the Xpress West website recently? Looks nice, but it looks rather inactive in terms of updates. Unlike say, AAF, they do not have a 'Recent News & Posts" section. The only thing that looks new is the copyright date of 2013 at the bottom of the page.

 

[leemell]

They are mostly in a holding pattern waiting to see what the FRA is going to do with their loan request.

 

[Michelle]

How long does the FRA take to make a decision?

 

[The Davy Crockett]

From Xpress West's website:

In December 2010, XpressWest submitted its RRIF loan application, which is currently being reviewed by the FRA’s Independent Financial Advisor. On average, the Federal Government’s loan evaluation process for substantial projects can take an average of 19 months to review. The XpressWest is no exception to this rule and as a result, expects the Federal Government’s process to be complete some time this year.

So let's see.... 12/10 to 1/13 = 25 months So in theory there should be some news coming as the site says "some time this year."

Which would be true...

Only thing is, what year was this written? :huh:

 

[Anderson]

Per the other posts/threads on the matter, we were expecting a decision to be handed down back in August (once Congress adjourned, so as to avoid hand-wringing and grilling on that front). That didn't materialize (obviously), and we've been waiting with baited breath since then. I can see holding until after either the election or the fiscal cliff stuff being at issue, but I'm not sure what the actual cause of the delays has been.

 

[leemell]

Per the other posts/threads on the matter, we were expecting a decision to be handed down back in August (once Congress adjourned, so as to avoid hand-wringing and grilling on that front). That didn't materialize (obviously), and we've been waiting with baited breath since then. I can see holding until after either the election or the fiscal cliff stuff being at issue, but I'm not sure what the actual cause of the delays has been.

I remember reading, on their website I think, that there has been a continual back and forth, mostly FRA asking for more info.

 

[CHamilton]

Congressional Republicans Try to Block Federal Loan for Vegas HSR

XpressWest has been waiting to hear from the federal government about their $5.5 billion loan request to help construct the high speed rail project from Victorville to Las Vegas (eventually connecting to Los Angeles via Palmdale). If the lead Republican budget-writers have anything to say about it, however, that loan won’t ever be approved.

Last week Senator Jeff Sessions and Representative Paul Ryan wrote to Ray LaHood urging him to reject the XpressWest loan application. Sessions is the ranking Republican on the Senate Budget Committee, and Ryan is the chair of the House Budget Committee and former vice-presidential nominee. Both are strongly supportive of austerity, despite its colossal failure around the globe, and both oppose high speed rail.

 

[Ryan]

I would hope that Secretary LaHood will give the letter from these Republicans the due consideration that it deserves.

 

[Anderson]

I really have to wonder what there is to take this long to review in the loan process and how many RFIs the FRA must be making to drag things out for so long.

 

[afigg]

XpressWest has been waiting to hear from the federal government about their $5.5 billion loan request to help construct the high speed rail project from Victorville to Las Vegas (eventually connecting to Los Angeles via Palmdale). If the lead Republican budget-writers have anything to say about it, however, that loan wont ever be approved.
Last week Senator Jeff Sessions and Representative Paul Ryan wrote to Ray LaHood urging him to reject the XpressWest loan application.

Oh, good grief. Now the Republicans are trying to kill a private-public infrastructure project, which they are normally in favor of. The CA House Republicans representatives are trying to kill or stall the CA HSR project and now this. If it was a $5 billion loan to build a private toll road with the most dubious financial projections imaginable, Ryan and Sessions would not be doing this. LaHood should go ahead and approve the loan quickly before Ryan sticks language into an appropriations bills that undercuts the $35 billion RIFF loan program.

 

[me_little_me]

XpressWest has been waiting to hear from the federal government about their $5.5 billion loan request to help construct the high speed rail project from Victorville to Las Vegas (eventually connecting to Los Angeles via Palmdale). If the lead Republican budget-writers have anything to say about it, however, that loan wont ever be approved.
Last week Senator Jeff Sessions and Representative Paul Ryan wrote to Ray LaHood urging him to reject the XpressWest loan application.

Oh, good grief. Now the Republicans are trying to kill a private-public infrastructure project, which they are normally in favor of. The CA House Republicans representatives are trying to kill or stall the CA HSR project and now this. If it was a $5 billion loan to build a private toll road with the most dubious financial projections imaginable, Ryan and Sessions would not be doing this. LaHood should go ahead and approve the loan quickly before Ryan sticks language into an appropriations bills that undercuts the $35 billion RIFF loan program.

Possibly they are thinking of these?

Solyndra, which went bust after receiving a $535 million loan guarantee from the Energy Department in 2009.

Abound Solar announced plans Thursday to file for bankruptcy and suspend operations, becoming the industry's latest government-backed firm to close its doors. The solar-panel manufacturer was approved for a $400 million loan guarantee by the Department of Energy in 2010, though the Department ultimately lent the company only $70 million.

 

[Ryan]

Yes, the solution to a loan not getting paid back is to never ever loan anybody money again.

That's a great plan for destroying the economy.

 

[George Harris]

Yes, the solution to a loan not getting paid back is to never ever loan anybody money again.
That's a great plan for destroying the economy.

Nice fact free statement. Suggest you look at pictures of Solandra's facilities. This was not the sort of place you build if you are trying to get something off the ground. Way too lavish. If you are just starting up a business, you spend as little as possible on anything not necessary to product production and sales. Fancy front offices are not necessary. That operation looked like a scam from the beginning.

Victorville - Las Vegas? And people call the California High Speed "Nowhere to nowhere" because the first part they are building is in the middle? This Victorville to Las Vegas line should be called teh Harry Ried Express. It is that no more. Why should the Feds loan money to a questionable venture that benefits the Las Vegas casinos and not much of anything, if anything else?

If the Feds want to loan money to rail projects, there are plenty possible that are of real public benefit. Go for one or more than one of these.

 

[Bob Dylan]

I agree with George, there are Plenty of rail Projects that will Benefit People and not the Wealthy Casino Flim Flam Artists in Vegas! This is the Kind of Scam that gives All Rail Projects a Bad Name and Ammo to Wing Nut Politicians to Attack Projects that Benefit Regular People!!!

 

[Ryan]

Yes, the solution to a loan not getting paid back is to never ever loan anybody money again.

That's a great plan for destroying the economy.

Nice fact free statement. Suggest you look at pictures of Solandra's facilities. This was not the sort of place you build if you are trying to get something off the ground. Way too lavish. If you are just starting up a business, you spend as little as possible on anything not necessary to product production and sales. Fancy front offices are not necessary. That operation looked like a scam from the beginning.

I'm not going to get into the specifics of discussing a non-Amtrak, non-rail related political football with you, George.

I stand by my statement that the fact that loans have failed to be repaid is a good excuse to stop giving out loans in their entirety is pants on head retarded.

As for the merits of this particular line, the fact that two different private companies are looking to start rail projects on it says that there certainly is some potential. It's a shame that you can't set your personal and political bias aside and give things an objective look.

 

[George Harris]

Yes, the solution to a loan not getting paid back is to never ever loan anybody money again.

That's a great plan for destroying the economy.

Nice fact free statement. Suggest you look at pictures of Solandra's facilities. This was not the sort of place you build if you are trying to get something off the ground. Way too lavish. If you are just starting up a business, you spend as little as possible on anything not necessary to product production and sales. Fancy front offices are not necessary. That operation looked like a scam from the beginning.

I'm not going to get into the specifics of discussing a non-Amtrak, non-rail related political football with you, George.

I stand by my statement that the fact that loans have failed to be repaid is a good excuse to stop giving out loans in their entirety is pants on head retarded.

As for the merits of this particular line, the fact that two different private companies are looking to start rail projects on it says that there certainly is some potential. It's a shame that you can't set your personal and political bias aside and give things an objective look.

I'm not the one that brought up Solandra, however it is a very good example of the sort of loan not to make. In fact, that loans that can be in part be considered of similar nature have not been repaid is exactly the sort of thing that any rational lender would be using in making a decision to not loan money. By the way, neither I nor the person who brought up Solandra did any name calling. Grow up.

 

[Ryan]

I must have missed the part of my posts where I said that wither one of you was calling people names... I love the irony of you telling me to stop doing something, then turn around and do it yourself. I'm plenty grown up, thanks.

I also don't really care who brought it up.

What exactly does it have to do with the loan for these guys?

It's not exactly news that some loans don't work out.

 

[John R]

If the Desert Xpress route is funded, built, and eventually fails, who would own that railway? Would it be a valuable asset for some entity?

Regarding the Desert Xpress loan, Government loans, by their nature, are partly partly financial and also partly "industrial policy" to encourage certain industries, such as "made-in-america" rail cars etc. One would expect a higher failure rate than traditional loans because of this dual purpose.

Regarding Solyndra, etc. every lender, government or private, MUST make "bad loans" occasionally. If a bank never made a bad loan it would be out of business, because every loan carries some risk, and if a bank never took any risk, it would never make a loan.

So, how does one evaluate and limit risk of failure of any loan, and in particular a one-of-a-kind railroad project. . .

 

[leemell]

If the Desert Xpress route is funded, built, and eventually fails, who would own that railway? Would it be a valuable asset for some entity?
Regarding the Desert Xpress loan, Government loans, by their nature, are partly partly financial and also partly "industrial policy" to encourage certain industries, such as "made-in-america" rail cars etc. One would expect a higher failure rate than traditional loans because of this dual purpose.

Regarding Solyndra, etc. every lender, government or private, MUST make "bad loans" occasionally. If a bank never made a bad loan it would be out of business, because every loan carries some risk, and if a bank never took any risk, it would never make a loan.

So, how does one evaluate and limit risk of failure of any loan, and in particular a one-of-a-kind railroad project. . .

Also not mentioned in much of the discussion was that Solyndra was about making solar cells a lot cheaper by manufacturing them in cylinders. Bad for them and the Government was the Chinese came into the the market with arrays that are now about 40% of the price that was prevailing and that was the end of that and many more. Not defending Solyndra practices but the market had a lot to do with it to.

 

[cirdan]

If the Desert Xpress route is funded, built, and eventually fails, who would own that railway? Would it be a valuable asset for some entity?

If Desert Xpress failed, I guess the government would own the line.

Would that line be valuable? I think it would. They probablly wouldn't recover the full value of the loan, but if Desert Xpress fails by a narrow margin, then somebody else buying the line for that same margin less than it cost to build, should succeed.

 

[jis]

I am surprised that people are asking the rhetorical question about ownership if a passenger operation fails, especially in this Forum. Who owns the passenger operations of all railways today? That might give one a hint of who would end up owning if a passenger operation fails financially by some measure that is generally accepted, no? Either it is sold as scrap or someone picks up the operating subsidy among the various levels of government involved. Were you expecting something else to happen? In the same vein is Amtrak a valuable asset? Is it just all about just the money computation based on some human dreamed up allocation to the monetized, and unmonetized sectors and between government and private sector?

And the whole thing about Solyndra is just a red herring in this context IMHO. But mind you just IMHO and I am entitled to at least one.

 

[leemell]

I am surprised that people are asking the rhetorical question about ownership if a passenger operation fails, especially in this Forum. Who owns the passenger operations of all railways today? That might give one a hint of who would end up owning if a passenger operation fails financially by some measure that is generally accepted, no? Either it is sold as scrap or someone picks up the operating subsidy among the various levels of government involved. Were you expecting something else to happen? In the same vein is Amtrak a valuable asset? Is it just all about just the money computation based on some human dreamed up allocation to the monetized, and unmonetized sectors and between government and private sector?
And the whole thing about Solyndra is just a red herring in this context IMHO. But mind you just IMHO and I am entitled to at least one.

I agree completely.

 

[CHamilton]

Nevada Senators Stand Up For XpressWest

Last week we learned that two leading Congressional Republicans were trying to block approval of a $5.5 billion federal loan for the XpressWest high speed rail project that would connect Las Vegas to Victorville and eventually serve Los Angeles. This week, both of Nevada’s U.S. Senators – including Republican Dean Heller – rose to defend the project and the loan request:


Senator Harry Reid says the Xpress West project is “something that we should do.”

Senator Dean Heller says the rail between Las Vegas and Victorville “promises a major shot in the arm” for Southern Nevada’s economy.

Reid’s support is not surprising, given that he has been a strong backer of the XpressWest project since 2010 and has no love lost for right-wingers Jeff Sessions and Paul Ryan, the two Republicans trying to block the federal loan.

But Heller’s support of XpressWest is somewhat surprising, given that many Republicans in the House and Senate are now ideologically opposed to high speed rail projects even when their benefits are obvious and local demand is great. Heller’s backing for XpressWest provides important cover to the Obama Administration on this loan proposal. Even though they should approve the loan regardless of what Republicans think, there’s no doubt that it helps if Obama and Ray LaHood can point out that the project has the bipartisan support of both Nevada Senators.

 

[GG-1]

Aloha

Many a local story blast the desert express. Just as many support the project. All of the support stories include eventual tie-in to the California High Speed System.

Personally I feel both a regular speed train similar to the Desert Wind and the Desert Express have merit. Since my Daughter lives near LA I have driven I-15 a number of times. Shortest drive time was 4.5 hours, longest was 9.45 hours. Have heard that some days close to 12 hours. To her house the mileage is 265 miles.

I have no clue how much it would cost to increase capacity on I-15. I suspect the cost would far exceed the rail cost. It is sad that we can not prepare for the future, and are seemingly always trying to catch up.

 

[Anderson]

One of the reasons I think that any such project in this area will likely be reasonably successful is that Vegas' population (going by Clark County, at least) has roughly doubled since the Desert Wind was axed. That gets non-tourist business, and the tourist business is also going to be helped by the often-expensive cost to drive between the locations plus the erratic times involved in the trip (both within the LA basin and on I-10/15 outside it).

To be fair, if I was given a choice between the Desert Xpress package, with its oddball terminus (Victorville or Palmdale) and what have you, and a Desert Wind (semi-)corridor project aiming for 3-5x daily frequency that serves LAX (and potentially one or more stops in the LA area), I'd probably choose the latter. But sadly, the latter doesn't seem to be happening (why it hasn't seriously been pursued, I'm not sure, but I'm inclined to blame CAHSR vacuuming all the attention CA has to spare up).

As to a "failure" of the DX project, let's not forget that there are several degrees possible there:
(1) The train covers operating costs and loan interest, but can't cover paying the loan back.

(2) The train covers operating costs, but can't cover debt service.

(3) The train fails to cover operating costs narrowly.

(4) The train fails to cover operating costs by a wide margin.

#1 and #2 probably result in the government taking an equity stake in the project during a bankruptcy. #3 may trigger a bankruptcy of some sort, but it and 1-2 would likely be eased eventually by some sort of extension down the Antelope Valley Line towards/all the way to LAX. And #4 would likely result in either a takeover by CAHSR (should that be moving along) or Amtrak not having to worry so much about replacing the Acelas (presuming that DX goes in for CAHSR/Acela II equipment).

For what it's worth, I expect #1 is the most likely result pending extension into the LA basin. Debt service is probably going to run at least $150m/yr in interest; paying back $5.5bn is going to be a stretch as well absent an inflationary surprise. #2 is almost as likely, but I think the operation should be able to cover costs based on a lot of what I've seen, likely preventing 3/4 from happening.