GOP budget leaders want loan rejected for proposed high-speed rail linking Calif., Las Vegas

LOS ANGELES, Calif. – Top congressional Republicans want the Obama administration to reject a $5.5 billion loan being sought by a private Nevada company to build a high-speed train from the edge of California’s Mojave Desert to Las Vegas, officials said Monday.

The proposed line known as XpressWest is a dicey bet for taxpayers, House Budget Committee Chairman Paul Ryan and Sen. Jeff Sessions, the top Republican on the Senate Budget Committee, said in a letter to Transportation Secretary Ray LaHood.

“We are deeply troubled by the prospects of subsidizing another costly, wasteful and risky high-speed rail project, particularly when our nation is facing a debt crisis,” they wrote in the letter dated March 6.

In a response to the lawmakers Monday, XpressWest CEO Anthony Marnell II defended the project that would connect Las Vegas with the small city of Victorville, Calif. He called it a jobs-engine that would ease congested freeways and jump-start a new generation of speedy trains.

He told Ryan, of Wisconsin, and Sessions, of Alabama, the company would tap into a little-used pot of rail funding to cover much of the construction cost, with the rest covered by private dollars.

“There is no more worthy rail transportation … project in the United States,” Marnell wrote.

Senate Majority Leader Harry Reid, D-Nev., has been among the train’s most outspoken supporters. A statement emailed by spokeswoman Kristen Orthman said “we shouldn’t allow tea party-driven ideology to limit much-needed investments in our infrastructure that create thousands of direct and indirect jobs.”

The vast park-and-ride project hinges on the untested idea that car-loving Californians will drive about 100 miles from the Los Angeles area, pull off the busy Interstate 15 and board a train for the final leg to the famous Strip.

Planners imagine that millions of travellers a year will one day flock to a station outside down-on-its-luck Victorville, which was hit hard in the recession.

The project had moved steadily through a series of regulatory hurdles and company officials expected a decision last year, which didn’t happen.

The Associated Press last year reported that the company’s own research warns it’s difficult to predict how many people will ride the train, a critical measure of financial survival. Reid and other supporters point to research that shows 80,000 new jobs, but government documents show virtually all those would be temporary — no more than 722 would be permanent, AP found.

Marnell is a casino developer and contractor whose credits include building the Bellagio and Wynn Las Vegas. He told the lawmakers the company’s ridership study “clearly supports our financing structure and the viability of this project.”

Ryan and Sessions also asked the Government Accountability Office, the investigative arm of Congress, to assess the risk to taxpayers. They urged the administration to postpone a decision on the loan until a GAO review of the project is complete.


Associated Press writer Hannah Dreier in Las Vegas contributed to this report.