Advocates for a 269-mile magnetically levitated rail line between Las Vegas and Anaheim, Calif., are pressing the Federal Railroad Administration for $45 million originally appropriated in the six-year federal transportation bill in 2005.
In an April 7 letter to FRA Administrator Joseph Szabo, Nevada Attorney General Catherine Cortez Masto described a scenario in which Nevada Dept. of Transportation repeatedly submitted scope of work plans since 2008, without receiving any response. “[We] steadfastly insist that the FRA comply with the Congressional mandate that the USDOT and the FRA take the steps necessary to allocate funding...for the maglev project,” she wrote.
“We're waiting for the approval of the last piece of scope of work so that we can access the money,” says Tracy Larkin-Thomason, assistant director of planning for NDOT. “We have contacted the FRA several times, and we do not have their response.”
Nevada Congressman Harry Reid (D) last year switched his support from the maglev line to a proposed steel-wheel high-speed rail line between Las Vegas and Victorville, Calif., that would cost $4 billion, to be managed by a private consortium called DesertXpress. He is redirecting the $45 million to an airport highway link.
In the letter, Masto states that a SAFETEA-LU amendment mandated that “such funding shall not be transferred and shall remain available until expended.”
“Maglev [supporters have] been working on this rail project for 30 years and has failed to secure the necessary private funding or even begin the initial stages of construction,” says Reid spokesman Christopher Moyer. “DesertXpress, however, is not seeking any federal funding and is ready to begin creating jobs for Nevadans this year.”
In a release, Reid states: “We are now well into 2010 and maglev has failed to come up with the 20 percent match needed to obtain these federal funds, which is why I reprogrammed the $45 million for a transportation project...that will actually create jobs right away.”
FRA spokesman Robert Kulak says that FRA is technology-neutral. “We are looking for applications that meet certain requirements,” he says. “In this case, the maglev proposal did note have the matching funds required under the earmark by Senator Reid.”
But in an April 9, 2009 letter to American Magline Group, the consortium aiming to build the maglev route, NDOT director Susan Martinovich thanks AMG for its promise to “provide the 20% of non-federal funding to match the 80% federal share.”
M. Neil Cummings, president of American Magline Group, adds: “To say that the EIS was abandoned in 2004 is patently false. NDOT as the lead state agency has completed Phase 1 and Phase 2 of an environmental impact statement for the maglev project between 2004 and 2008.
He adds that if not for the FRA’s delayed response, “we would be nearing completion of the EIS for the starter segment” between Primm, Nev., and Anaheim.
He also notes that a Chinese bank is prepared to commit $7 billion in loans to the project, once the necessary approvals are in place. “It would be made under very favorable terms, ie, a very low interest rate below 5%, over 25-30 years, with no pay back starting until construction is complete and revenue is coming in from the farebox.”
Contrary to the claim by Reid’s office, DesertXpress is now looking at federal loans. “The plan of finance has always been and continues to be based on a combination of private equity and long-term debt,” says spokesman Lee Haney. “In view of the situation in the global recession and lack of a functioning debt market, we see federal loans as a viable and responsible alternative to traditional debt markets.
“The proportion of debt to equity has not been finalized,” he adds. “The plan of finance shows the project will cover operating expenses, provide a return to equity holders, and repay the debt with interest.”
DesertXpress expects to select an implementation team soon. The 200-mile route would take travelers between Victorville, about 80 miles from metropolitan Los Angeles, and Las Vegas at speeds of up to 150 mph.
The more costly maglev line would take travelers at speeds of up to 300 mph, from the city of Anaheim, about an hour south of Los Angeles. Proponents say that because the train never touches the tracks, maintenance costs savings will make up for the upfront construction cost.