The deal between a consortium of state-run Chinese railway firms and the private rail venture, XpressWest, will help open up the US to Chinese rail technology. Photo: Xinhua
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https://scmp.com/news/china/policies-politics/article/1859055/chinese-state-railway-companies-firms-build-us-high Politics
Leaving Las Vegas: Chinese state railway companies to build US high-speed link from ‘Sin City’ to LA
Work on joint venture for 370km high-speed line linking Las Vegas to Los Angeles could start in 2016 and is part of mainland’s pursuit of overseas high-speed rail deals
Work on the highly lucrative project could start next September. Photo: Bloomberg
A consortium of Chinese state rail companies has teamed up with an American company to build a high-speed rail line in the United States, with work possibly starting as early as September 2016.
It is the latest push by Beijing to export its high-speed rail technology and tap lucrative offshore markets.
China Railway International USA and the private rail venture, XpressWest, said in a joint statement on Thursday that they would form a joint venture to accelerate the launch of a high-speed rail linking the western cities of Las Vegas with Los Angeles.
If this opens up the United States market for [Chinese rail firms], opportunities for future expansion will increase. And if [their technology] is used in the US, it will be easier for them to sell to other countries
The deal marks the latest attempt in China’s increasingly aggressive pursuit of overseas high-speed rail deals after the country built the world’s longest network in less than a decade.
Beijing recently clinched contracts in Russia, although it has faced hurdles in Mexico and Indonesia because of bureaucratic reversals of decisions in those countries.
XpressWest, a private venture of a Las Vegas-based hotel and casino developer, was given approval in 2011 to build and run the 370km high-speed line, according to its website.
The project has US$100 million in initial capital, the companies said in the statement, released at a government-organised forum before President Xi Jinping’s forthcoming visit to the US.
China Railway International USA is owned by a consortium made up of subsidiaries from the mainland state companies China Railway Group, CRRC Corp, China State Construction Engineering Corp and China Railway Signal & Communication Corp.
Gary Wong, an analyst at Guotai Junan Securities, estimated that the XpressWest project was worth US$5 billion, which he said would likely offer the many Chinese companies involved little financial benefit.
However, it was significant as a deal because it would help open the undeveloped US high-speed rail market, Wong added.
“If this opens up the United States market for them, opportunities for future expansion will increase,” Wong said. “And if [their technology] is used in the United States, it will be easier for them to sell to other countries.”
The companies did not elaborate on how the Chinese consortium would help accelerate the project.
Additional regulatory approvals would be required before the construction began, expected as early as September 2016, they said.
US government officials have tussled for years over building a high-speed rail, leaving the country far behind Europe and Asia in this area. Most of the nation’s dozen or so projects have struggled to gain traction, with a US$68 billion scheme in California the farthest along.
Before they were merged into CRRC Corp, train makers China CNR and CSR Corp had expressed an interest to sell high-speed trains to the California project.