NARP raises my blood pressure

My email inbox this week contained a press release from the National Association of Railroad Passengers, denouncing a “partisan political attack” on a proposed high-speed electrified railroad between Victorville, Calif., and Las Vegas. Letters opposing the railroad from two Republicans, Congressman Paul Ryan of Wisconsin and Senator Jeff Sessions of Alabama, were called “part of a total attack on intercity passenger rail” by NARP, whose executive director, Ross Capon, went on to say: “When Congressmen from Texas and Alabama step in to prevent a Nevada-based business from developing service between two robust travel markets . . . it goes a long way towards explaining why the U.S. transportation network is in its current state.”

With all respect to NARP (I am a member) and to my friend of several decades Ross, hold on!

As I understand it, Ryan and Sessions do not object to the building of this railroad by a privately owned company. What they object to is the federal government’s paying for 80 percent of its cost, through a low-interest, 35-year loan. And so do I. In fact, I smell a rat somewhere in the vicinity.

I have three problems with how this railroad, XpressWest, is being financed. First and foremost, why are we taxpayers being asked to finance the lion’s share of this 150-mph railroad? If the cost and revenue projections are that well grounded, shouldn’t XpressWest be able to raise its own construction capital? Instead, in 2010 its backers, including a Las Vegas hotel kingpin, went to the Federal Railroad Administration requesting a Railroad Rehabilitation & Improvement Financing (RRIF) loan. No RRIF loan of anywhere near this size has ever been approved. And I might add, never has FRA made a RRIF loan as speculative as this. To state all this another way, these people are asking you and me to assume all the risk. FRA has been considering the loan request for 27 months, far longer than the typical 19 months needed to say yes or no. I suspect the agency is being buffeted politically from friends and foes of XpressWest.

Second, I question whether it is a viable project in the first place. Victorville is at the top of Cajon Pass, 85 miles from downtown Los Angeles along some of the world’s most crowded freeways. By the time you get to Victorville, you’re less than three hours by car from Vegas. Ross tells me XpressWest intends to extend its railroad from Victorville to Palmdale, where riders can get aboard Metrolink trains and perhaps ultimately California High Speed Rail Authority trains. But as I understand it, that’s another $1 billion or so in financing that is not arranged.

Third, the idea of public financing of a new private company through political log-rolling sets off a stench. XpressWest appears to have spent more time getting backing from California and Nevada politicians for its RRIF loan than it has defending its own projections to the FRA and the public. Both of Nevada’s senators champion XpressWest, applying pressure on the FRA. Why does NARP complain so bitterly when Congressman Ryan and Senator Sessions push in the other direction.

All this while, another company, Las Vegas Railway Express, is moving toward a projected year-end start-up of conventional service on BNSF Railway and Union Pacific, from Fullerton, Calif., to Las Vegas and not asking for a dime of public support. The company proposes to initially run four round trips a week using 14 converted bilevel cars once owned by Chicago & North Western. The balance sheet of this publicly traded penny-stock company,  in common with all startups before revenue rolls in, is atrocious. But its staff and board of directors include railroad veterans, a couple of whom I know and respect, work on the cars and a Las Vegas station is progressing and the enterprise has at least a fair chance of launching. I wish them well.

I also wish XpressWest well, so long as it keeps its hands off my tax dollars. I don't want the government to end up, through default, owning this railroad. — Fred W. Frailey