A bullet train passes over Yongdinghe Bridge in Beijing. (Jiao Hongtao / Xinhua /AP Photo)
June 8, 2016
Nine months after announcing that China would help build a high-speed rail line from Los Angeles to Las Vegas, the private U.S. company behind the plan said late Wednesday that the deal was off.
XpressWest said the decision to terminate the relationship with China Railway International was based “primarily upon difficulties associated with timely performance and CRI’s challenges in obtaining required authority to proceed with required development activities.”
XpressWest indicated that its “biggest challenge” was a federal government requirement that high-speed trains must be manufactured in the United States to secure regulatory approvals.
“As everyone knows, there are no high-speed trains manufactured in the United States,” the company said in a statement. “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 policymakers to recognize high-speed rail in the United States is a new enterprise and 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.”
The news broke in China on Thursday, a public holiday, and China Railway International representatives were not immediately available for comment.
China launched its domestic high-speed rail service in 2007 and has the world’s most extensive network of such trains, covering more than 12,000 miles. In 2011, two trains collided near the city of Wenzhou, killing 40 people, raising doubts about the quality and safety of China’s trains and operating system, though there has not been a crash since then.
The country is now trying to export its rail technology, vying for contracts in Mexico, Southeast Asia and elsewhere. The L.A.-to Vegas route would have been China’s first such contract in the United States.
China’s high-speed rail lines are owned and operated by the China Railway Corp., a state-run entity formerly called the Railway Ministry.
The XpressWest-China venture was announced suddenly in September just days ahead of President Xi Jinping’s visit to the United States. But details were scant.
XpressWest, formerly called DesertXpress, said it had formed a joint venture with China Railway International USA, a consortium led by China Railway. China Railway International stated that it would provide initial capital of $100 million.
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