Funding CA High Speed Rail through the Private Sector

Getting bullet train infrastructure paid for quickly through the market economy.

Graphic: DesertXpress Enterprises

Transit Talking Points by: Nicholas Ventrone, Community Engagement Director

The Transit Coalition generally supports public-private partnerships as a funding source for transportation infrastructure. It is a method of financing capital where a private entity provides funds up front to build a project. In return, the investing firm could use the finished product to conduct its business in the marketplace and provide jobs.

PPP's are done so that public agencies do not have to wait for funds from public sources to trickle in over the course of many years; sometimes that wait can span decades. In addition to capitalizing on the infrastucture, incoming public funds can be used to reimburse the private entity that provided the amount to start work on a project. That entity, in turn, receives a concession to build the project.

Public agencies, here at home and across the globe, are increasingly using this method to fund projects without having to wait for government appropriations.

Former 91 Express Lanes toll rate sign used prior to the OCTA purchase and re-branding.
I do acknowledge that not every PPP is a good deal.

For example, the original contract between Caltrans and a private firm to develop the 91 Express Lanes through Orange County had a non-compete clause in the rule book which forbade any form of infrastructure upgrades in the corridor for 30 years. We the people of Southern California got a bad bargain from that PPP even though the HOT lane infrastructure proved to be a success..

It wasn't until 2003 when the Orange County Transportation Authority came along and bought us out of that mess. Because the 91 Express Lanes opened in 1995, we would still be locked into this situation to this very day for another decade had OCTA not purchased the toll lanes. The Transit Coalition continues to call for the remaining toll bond debt to be paid off as soon as possible.

Enter in high speed rail.

Last Thursday, DesertXpress Enterprises which is proposing the XpressWest line between Victorville and Las Vegas announced that it had formed a partnership with China Railway International USA. Very little details were disclosed but the Chinese firm did state that it would provide initial capital of $100 million.

What does this mean for the California High Speed Rail Authority? What does it mean for the widespread HSR opposition and taxpayer watchdog groups that correctly argue that the start-up voter-approved bond money must not be wasted?

Lisa Marie Alley, Deputy Director of Public Affairs for the California High Speed Rail Authority, told the Los Angeles Times that CHSRA has had ongoing discussions with XpressWest to explore combining both systems and to ensure that XpressWest trains are designed to operate on the authority's track. Alley added that the High Speed Rail Authority has not yet issued the green light to allowed XpressWest to use its right-of-way.

But if this partnership between CHSRA is established, and officials continue robust discussions for the Palmdale to Burbank tunnel, it could be possible that additional private funds from various sources will pay for the infrastructure. That could mean that XpressWest could very well operate straight from LA Union Station, through Palmdale and Victorville and into Las Vegas.

Yes, I know there's plenty of opposition to drill a tunnel under the national forest. Valid issues must not be stonewalled or ignored. That means the geo-technical and environmental studies of the area need to be transparent and urban residential displacements in Burbank kept at a minimum. But if the rail tunnel can be safely engineered and if it turns out not to be a pollutant--which I predict it will be clean--it will allow for a straight and more direct transit route which would allow the bullet trains to travel at their top speeds between the LA Basin and High Desert.

Plus, utility firms including the growing solar panel industry in the deserts may desire to use the tunnel to channel additional power or other lines into the LA Basin. Thus, they may be willing to invest into the project too.

And once that starting segment is launched and funded, it would be just a matter of time before even more private money is invested to extend HSR north from Palmdale, through the Central Valley to Sacramento and San Francisco. Add to that a HSR branch for the remainder of the I-15 and I-10 corridors, and potentially the I-215, Irvine-to-Corona Expressway rail tunnel, and the I-5 Tejon Pass HSR tunnel as well.

Many HSR opponents cite the issue of spending massive sums of public funds as their chief argument against building the statewide bullet train. But if the private sector continues to invest with state policies allowing for transparent and business-friendly transactions, we might be able to find some common ground by simultaneously getting the state high speed rail infrastructure without the government waste. Plus, we would still have plenty of public money to spend on the rest of the state's surface transportation needs.