Xpress West

[afigg]

They are already commiting $1.4b. This is $500M more.

The RRIF application was submitted over 2 years ago. Some of the original backers who promised or likely vaguely promised to invest $1.4 billion may have withdrawn, their investment agreement expired or had to put their money elsewhere. Getting $2 billion in private equity financing together for a passenger rail project, something that has not been seen in the US for many years, is a challenge. Question is where are the major Vegas casino companies in this?
Edit: wording fix

 

[leemell]

Last time I looked into it there were five major casino conglomerates investing in it. They were not named but it sounds like the big players in Vegas. The guy running the show is a major Vegas contractor who has built many of the Strip building complexes. They probably haven't or couldn't withdraw as the RRIF application requires the funding details including almost certainly the names the investors.

 

[Anderson]

Also, let's be honest...$1.4bn is no small change. That's a pretty good new resort or two between the group. Likewise, these guys may have a good deal of revenue (and indeed, solid profits from a chain of hotels), but $500m is still a decent amount of money (not to mention opportunity cost) to put into a project like this. Not that they might not still put the money in, but I can see such a reply causing a careful evaluation of options.

 

[Thomas]

I believe that whichever casino employees are behind this probably know what they are doing. But, with that being said, I believe that this major infrastructure project has to be done. Xpress West might even have as large as an influence as Midtown Direct did when it was created in the 1990's for improved service into New York City.

Will people be able to buy stocks in Xpress West?

 

[Anderson]

Guest: That's an excellent question. I would not be surprised if, once things are up and running, there's a public offering of some sort (either to pay back construction loans, to allow the initial investors to realize some direct gains, or to fund further expansion). However, I don't expect that to happen until the operation is at least up and running and on a path to profitability, since I highly doubt that the investors would want to sell their stakes for too low a price.

One thing I will say is that there have been a lot of very rich folks (Warren Buffet and Carlos Slim come to mind) who have been pushing HSR at times (Slim has even expressed an interest in investing in it), so there should at least in theory be capital pools to tap into. JR Central also seems interested in investing in the US as well. However, I also don't expect them to give away their money...so the wrangling over those funds will likely be fierce.

(Of course, I'm now imagining a world where Berkshire Hathaway ends up effectively taking this over...)

 

[Andrew]

Would China invest in this?

 

[leemell]

Well, California Gov. Jerry Brown was in China for two weeks recently and one of his chief subjects was investing in HSR, CAHSR specifically.

 

[George Harris]

Last time I looked into it there were five major casino conglomerates investing in it. They were not named but it sounds like the big players in Vegas. The guy running the show is a major Vegas contractor who has built many of the Strip building complexes. They probably haven't or couldn't withdraw as the RRIF application requires the funding details including almost certainly the names the investors.

The casino operators would have a bigger view than just the railroad itself. They migh joyfully pour money into a railroad that they know will lose money if that feel that it will bring more people in that will be willing to hand over money in Las Vegas sufficiently to justify the cost of the railroad construction and operation. Also, they might figure that the operating cost will be worthwhile even if the original overall investment cannot be recouped. If they feel their loss on a bankruptcy of the railroad is tolerable, they would be more than willing to let it happen regardless of who else loses. After all, these guys are not exactly models of integrity. Remember, our government has shown itself more than willing to dump money into losers given the right political connections, and it is hard to be much better connected politically than Harry Reid.

There is a good historic example of this: The Florida East Coast Railroad. Henry Flagler built it up to encourage travel to south Florida with the objective of encouraging travel to south Florida where he had major interest in developing Miami and environs. He did not mind that the railroad lost money so long as the overall picture was positive for Flagler, and given the time, there was no possibility of government bail outs as there is now.

 

[Anderson]

Well, Flagler felt that the company as a whole would make money...land company and all. IIRC, the only big money-loser was the Key West Extension (which was an engineering mess as well). The main line wasn't a massive money-maker, but it didn't lose money and the land operations (sadly since split off) made up for it with a solid return on investment.

Actually, this is a sort of inverted version of the railroad resorts in NJ/MD/DE: The railroads built the resorts partly to encourage travel on their lines to/from them. Here, the resorts exist, an they're investing in the railroad to get people to them.

With that said, you do raise an interesting possibility: The casinos invest in the road, it ultimately goes bust under the debt load, but once that clears you have a modestly profitable entity that can be floated (after all, let's not forget how many railroads went bankrupt once construction was complete but which stayed in business).

 

[SWendt]

Of the two viable options out there, this one is by far the more costly and the more risky. The X Train will provide affordable service from Fullerton to Las Vagas whereas XpressWest will not connect to anything without an additional $1.5 billion extension. Anyone driving out to Victorville has already driven through the worst part of the trip, namely getting out of the LA basin. The X Train also has already secured rights for a good portion of its route. Track that is already in place, which is why the X Train could actually be running trains by the end of the year. X Train has already purchased equipment and has folks with real railroading and logistics experience. And they are doing it WITH PRIVATE MONEY. So, why should we loan Xpress West $5 billion dollars to build a brand new line that won't be completed for at least 3 or 4 years at the earliest and stops over 100 miles short of LA? Besides, because X Train has lower start up costs their chance of success are much higher, where the multi-billion dollar HSR is a huge gamble on a route that has always been lackluster at best.

I suspect that one reason Paul Ryan objects to this, as does Fred Frailey, is that there is no reason for the government to give a $5 billion loan to a company to provide an inferior service that a 100% privately funded company is already planning to provide for a lot less. This deal smells like a government subsidy to Las Vagas Casino operators. Will this really provide a $5 billion improvement in the everyday lives of the people of LA and LV?

Another disturbing fact about this and any money loaned to the CalHSR is that those billions are now NOT available to other projects that could provide a much more immediate and dependable benefit to many more people all across the US! Think what Amtrak could do with that amount of money! Think about what kind of improvement could be made to other PROVEN corridors! Increased track capacity on the Surfliner which could allow real express service and increased speeds. Added station platform capacity on the Capitol corridor to allow quicker stops. Or how about loaning the money to Amtrak for the NEC rebuild to allow it to reach its dream of actually running its Acelas at their designed speeds over the whole route in 5 years instead of 45 years!

There is just so much more railroading that could be done with the $5 billion than building a 180 mile railroad in the middle of the desert.

 

[Andrew]

But Xpress West is planned to eventually be linked to Palmdale, California. With high unemployment rates in the Southwest--and demand for an urgently needed and improved transportation corridor--Xpress West is an investment that will get the green light from Washington. Ridership will be justified and the corporations want it, too...

 

[Paulus]

Of the two viable options out there, this one is by far the more costly and the more risky. The X Train will provide affordable service from Fullerton to Las Vagas whereas XpressWest will not connect to anything without an additional $1.5 billion extension. Anyone driving out to Victorville has already driven through the worst part of the trip, namely getting out of the LA basin. The X Train also has already secured rights for a good portion of its route. Track that is already in place, which is why the X Train could actually be running trains by the end of the year. X Train has already purchased equipment and has folks with real railroading and logistics experience. And they are doing it WITH PRIVATE MONEY. So, why should we loan Xpress West $5 billion dollars to build a brand new line that won't be completed for at least 3 or 4 years at the earliest and stops over 100 miles short of LA? Besides, because X Train has lower start up costs their chance of success are much higher, where the multi-billion dollar HSR is a huge gamble on a route that has always been lackluster at best.

Not to defend XpressWest, but X-Train is a fraud.

 

[leemell]

X-Train is only expected to run on this schedule:

LA – Las Vegas Thurs & FRI
Departs Southern California Noon
Arrives Las Vegas 5 PM

Las Vegas – LA Sunday

Two departures:
Departs Las Vegas 1 PM
Arrives Southern California 6 PM

Departs Las Vegas 5 PM
Arrives Southern California 10 PM

AND, it is advertised as a party train.

 

[Anderson]

For a moment, if I were to design my ideal HSR service from the LA area to Las Vegas, I would probably run it from LAUPT to somewhere on/near the Strip in Vegas via Cajon Pass. I'd likely put 2-3 stations in along the way out of LA: Though not all trains would make all stops, I'd at least have the stops "on the line" and run different stopping patterns to cater to demand (and yes, I'd take intra-regional traffic...Ontario-LA is still sixty miles; if you can get someone to drop $30-40 for that ticket, go for it and just adjust pricing so local traffic can fill space on the train but doesn't crowd out through traffic). The question of extending "beyond" LAUPT toward either Santa Barbara or Anaheim would be open (and indeed, some of that would come down to where my yards ended up being). After that, I'd have stops (assuming the routing cooperated) at Victorville and Barstow; again, these might only be made by a few trains per day. In Vegas, I would sincerely consider having two stops if I could get far enough into the area. One would be right by the strip; the other might be further into town or might be slightly suburban (and have additional parking), or might have a BWI-style airport link (given the low cost of flying to Vegas from a lot of places, I think you might actually get a decent amount of reverse business this way): Even if the second stop only tosses off a hundred passengers per day, at $100/one-way ticket that would still be $6-8 million/year.

Is this practical? Probably not...I shudder to think of what it would cost to run an HSR line through the LA basin these days, just from real estate acquisitions. Even settling for something like 125 MPH operation until you got out of the area would be problematic, not to mention finding space within the pass or blasting tunnels. But it's what the "ideal" service would be.

I think both trains have issues. I suspect that DX/XW's are more easily surmounted (the X-Train's twice-weekly schedule seriously limits its appeal for folks who might be in a position to "burn" a Monday, say over a holiday), but it's still going to be expensive as all get out to make anything work. Palmdale/Victorville are dubious stand-ins for LA and San Bernadino, and folks having to take a two-hour commuter train ride to Palmdale is going to be a big drag on business.

 

[George Harris]

Palmdale/Victorville are dubious stand-ins for LA and San Bernadino, and folks having to take a two-hour commuter train ride to Palmdale is going to be a big drag on business.

The entire point of Palmdale is to connect to the Calif HSR

 

[Andrew]

I still think that Las Vegas to Palmdale could work. A large parking garage would have to get built at Palmdale, though. In addition, businesses, such as Starbucks, could open at Xpress West's Train Stations, including in Las Vegas. This would generate more revenue for the railroad.

Does anyone know if Amtrak is involved with Xpress West?

 

[Paulus]

Does anyone know if Amtrak is involved with Xpress West?

Contracted to supply some operating crew if it ever happens.

 

[afigg]

Does anyone know if Amtrak is involved with Xpress West?

Contracted to supply some operating crew if it ever happens.\

You are confusing the X-train with Xpress West, Amtrak reportedly has an agreement to run the twice a week X-Train service. If Xpress West can get the funding, it will likely take up to 5 years to build the line and 2 stations. Xpress West has a long time to decide who will operate their trains. As an all new service over their own tracks, I would not expect the operator to be Amtrak or Amtrak employees under contract.

 

[Paulus]

Does anyone know if Amtrak is involved with Xpress West?

Contracted to supply some operating crew if it ever happens.\

You are confusing the X-train with Xpress West, Amtrak reportedly has an agreement to run the twice a week X-Train service. If Xpress West can get the funding, it will likely take up to 5 years to build the line and 2 stations. Xpress West has a long time to decide who will operate their trains. As an all new service over their own tracks, I would not expect the operator to be Amtrak or Amtrak employees under contract.

Whoops, yeah, sorry. Too many X's around about.

 

[Andrew]

How does a new transportation secretary in Washington impact the Xpress West Project?

 

[Anderson]

Palmdale/Victorville are dubious stand-ins for LA and San Bernadino, and folks having to take a two-hour commuter train ride to Palmdale is going to be a big drag on business.

The entire point of Palmdale is to connect to the Calif HSR

I know that's the intention, but the best-case scenario is that you've got an HSR link into the San Fernando Valley in 13 years (2026). Assuming that this project doesn't get tied up for five or six years before construction starts (and that CAHSR can keep to a schedule of some sort), that's going to be a rough couple of years at the start without that link, and a few more years before the line actually gets into LAUS (rather than just the San Fernando Valley).

Likewise, it's still not clear whether these folks intend to force a transfer at Palmdale (I haven't seen a clear indication that they're expecting to operate into LA, for example, and if they do you're likely to see some sort of fight over revenues and/or track access costs), or if they're going to be able to make a through-ticketing deal work absent a train run-through (while it would be in both groups interests to make something work, shall we discuss all the other times an agency has done something contrary to their interests?).

 

[Andrew]

Has there been any lobbying by the train manufactures, such as Bombardier, to convince the Government to give the green light for Xpress West?

 

[john h]

I got something from X-Train today, They will be hooking there trains to Amtrak exisiting trains, sounds pretty intresting.

I understand this is the thread to discuss this topic on.....

 

[afigg]

I got something from X-Train today, They will be hooking there trains to Amtrak exisiting trains, sounds pretty intresting.
I understand this is the thread to discuss this topic on.....

No, X-Train and Xpress West are two entirely different ventures and companies. Xpress West is proposing to build a HSR service between Palmdale and Las Vegas. X-Train is proposing to run a conventional 79 mph max speed limited service train using rebuilt old rolling stock. You were sent to the wrong forum and thread.

For the X-Train, go to this thread in the General Rail Discussion forum. The X-Train thread was last posted to in December, 2012 which says something about how much news there has been about them.

 

[GG-1]

I got something from X-Train today, They will be hooking there trains to Amtrak exisiting trains, sounds pretty intresting.
I understand this is the thread to discuss this topic on.....

No, X-Train and Xpress West are two entirely different ventures and companies. Xpress West is proposing to build a HSR service between Palmdale and Las Vegas. X-Train is proposing to run a conventional 79 mph max speed limited service train using rebuilt old rolling stock. You were sent to the wrong forum and thread.

For the X-Train, go to this thread in the General Rail Discussion forum. The X-Train thread was last posted to in December, 2012 which says something about how much news there has been about them.

Aloha

A stockholder in this company sent me 2 releases which I will link to later today in that thread. Unless someone else beats me to it, :giggle: