“The California Debt Limit Allocation Committee’s allocation of $US 600m for the Virgin Trains rail project will inject $US 2.4bn of investment into the Victor Valley Region,” Virgin Trains USA said in its application. “Due to the private rail company’s ability to market four-times as many bonds, CDLAC’s return on investment for housing, jobs and regional growth will be higher than traditional housing projects. The train along with development of adjacent land will provide a boost to affordable multi-family housing and alleviate existing housing shortages.”
This is the second bond Virgin Trains USA has secured. In March, the US Department of Transportation (USDOT) approved $US 1bn in tax-free private bonds for the project.
All the Virgin bonds must be issued by September 30. If not, California will transfer the $US 600m it approved into its affordable housing fund.
According to Las Vegas Review-Journal, the final step to get the high-speed project underway is for Nevada to approve $US 200m in bonds from the state’s debt limit allocation, which would allow Virgin to market $US 800m in bonds for the project.
“We still need the Nevada Department of Transportation agreement finalised, final environmental determination, evidence that the FRA will issue the record of decision, and (financial adviser) David Robertson’s due diligence on the financial side before we can issue a finding of fact,” Mr Terry Reynolds, director of Nevada’s Department of Business Reynolds, told the Las Vegas Review-Journal. A meeting to discuss the bond approval in Nevada will not been arranged until all outstanding items are completed.
Construction could start later this year provided the Nevada bond is approved and depending on the impact of the coronavirus pandemic on the project.
Trains will operate at 45-minute intervals and take about 1h 30min to complete the 270km trip between Victorville and Las Vegas compared with about 3 hours by car.
“Today’s approval is a great example of the public and private sector working together to create state-wide solutions for the economy, transportation and housing, and it couldn’t come at a more critical time,” says Mr Ben Porritt, senior vice-president for corporate affairs at Virgin USA told the Las Vegas Review-Journal.
For more information on high-speed rail projects, subscribe to IRJ Pro.