Chinese anger as US firm terminates Las Vegas high-speed rail deal

XpressWest, the US company trying to build a high-speed link between Los Angeles and Las Vegas, has terminated its agreement with the consortium of Chinese rail contractors that was to have built it.

In a statement released on 8 June the company said the decision "to terminate the relationship" was based on "difficulties associated with timely performance and CRI’s [China Railway International’s] challenges in obtaining authority to proceed with required development activities".

CRI has hit back, telling Chinese media that the unilateral statement was "precipitate and irresponsible". It vowed to "spare no efforts" in defending its interests.

The Chinese consortium is made up of China Railway Group, the CRRC Corporation, China State Construction Engineering Corporation and China Railway Signal & Communication Corporation.

The XpressWest statement did not elaborate on what the "difficulties associated with timely performance" were.

It did, however, complain about the US government’s requirement that the trains on its planned railway be made in the US.

"As everyone knows, there are no high-speed trains manufactured in the US," the statement said. "This inflexible requirement has been a fundamental barrier to financing high-speed rail in our country.

"For the past 10 years, we have patiently waited for policy-makers to recognise … that allowing trains from countries with decades of safe high-speed rail experience is needed to connect the Southwest region and start this new industry."

China has a well developed high-speed rail sector.

Although XpressWest’s statement appeared to point blame at US government policy, the decision angered the Chinese consortium, which had hoped to use the scheme as a way to gain entry into the US market.

State news agency Xinhua reported that an unnamed CRI manager responsible for the project said XpressWest had been "precipitate and irresponsible to make such a statement while its talks with [CRI] were still going on".

The manager said CRI would "spare no effort in defending CRI’s interests", and accused XpressWest of forever "adding new demands in the talks, some of which were unacceptable to the Chinese side", Xinhua reported.

According to Xinhua, he added that the unilateral announcement also violated the cooperation framework agreement signed by the two sides, which stipulates that one side should not release related information without approval by the other.

The deal was announced in September last year, and work was due to begin in three months’ time on a 300km double-track railway that would have run alongside Interstate 15. The track was to have been electrified, and the trains on it were to have reached a speed of 240km/h. This would have replaced a four-hour drive with an 80-minute train journey.

The value of the project was put at between $5bn and $12.7bn.

XpressWest was set up in 2011 by Las Vegas-based hotel and casino developer Marnell to create a rail link between Las Vegas and California.

About a quarter of all visitors to Las Vegas come from southern California. However, there is presently no rail service between the two locations. Amtrak opened the Desert Wind line from Los Angeles to Utah via Las Vegas in 1979, but this was closed in 1997.

Image: XpressWest’s visualisation of its high-speed service

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