A private train intended to whisk Southern Californians to Las Vegas casinos and resorts could boost the proposed government-owned high-speed rail connection between Los Angeles and San Francisco, which has lost support as cost estimates swelled.

A public partnership with private operators would help build segments of the system, Dan Richard, chairman of the California High-Speed Rail Authority, said in an interview.

“We are not going to be a government-run railroad,” Richard said. “Our business model is that the private sector will come in and bid for the right to operate on our system.”

The bullet train is intended to move passengers from San Francisco to Los Angeles in less than three hours at speeds reaching 220 miles (354 kilometers) per hour. It’s faced opposition in Congress, while a voter-approved $10 billion ballot measure to help pay for the project with state-issued bonds has been challenged in court.

Governor Jerry Brown, a 76-year-old Democrat, has championed the $67.6 billion plan even as cost estimates have increased and polls have showed support dropping from the 53 percent that approved the debt in 2008. His Republican election opponent, Neel Kashkari, has made stopping the “Crazy Train” a key plank in his campaign.

Brown maintains that California still should tackle large infrastructure projects and has devoted revenue from selling pollution credits through a cap-and-trade auction toward the rail system. The governor said in a Sept. 4 debate with Kashkari that the train would be cheaper and more environmentally friendly than building roads and airports.

Making Tracks

Authority officials want to cooperate with DesertXpress Enterprises LLC to make it happen. The company, operating as XpressWest, plans a 150 mph train that would connect Palmdale, about 70 miles north of Los Angeles, with Las Vegas, Chief Executive Officer Tony Marnell said in a telephone interview.

The Las Vegas company originally planned for its route to end in Victorville, about 50 miles east of Palmdale. It added a Victorville-to-Palmdale segment after the High-Speed Rail Authority routed its train through the city, he said. The Las Vegas train would switch to public tracks in Palmdale.

Marnell said he’d like to secure financing through the Federal Railroad Administration and repay the money through fares of about $90 each way for a 90-minute trip.

The private train would boost revenue for the high-speed project by attracting travelers bound for Las Vegas, and through access fees to use the high-speed tracks, Marnell said.

“What we have is a robust ridership demand,” he said. “When you have that, you have revenue and that helps pay for these systems.”

All Aboard

Marnell said his company has secured right-of-way agreements for 85 percent of the Las Vegas route and hopes to break ground in about a year, with service beginning in as little as five years. The Los Angeles-to-San Francisco train is slated for 2029.

“This new route would cover all of Southern California, both the inland part and the coastal area,” said Hualiang Teng, who teaches civil engineering and transportation planning at the University of Nevada at Las Vegas and hasn’t been involved with the project. “It would have enough ridership to make money.”

Las Vegas had 39.6 million visitors last year, with 26 percent from Southern California, said Heidi Hayes, a spokeswoman for the Las Vegas Convention and Visitors Authority.

Funding for the high-speed project to date includes $3.3 billion from the federal stimulus law, $250 million from state cap-and-trade revenue and $4.7 billion from the bond measure.

An initial 130-mile segment begins near Fresno, where demolition of buildings began last month, and ends near Bakersfield, Richard said. The next leg is Burbank to Palmdale, and speed and safety upgrades to tracks have begun near San Francisco and Los Angeles.

“And then private-sector dollars help to start to fill in gaps,” Richard said.

To contact the reporters on this story: Alison Vekshin in San Francisco at avekshin@bloomberg.net; James Nash in Los Angeles at jnash24@bloomberg.net. To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net. 

Photo Credit: Artist's rendering of a station California High Speed Rail Authority