Nevada High-Speed Rail Authority sets framework for choosing operator
If Nevada’s planned high-speed rail system runs as swiftly and efficiently as the first Nevada High-Speed Rail Authority meeting, Southern Nevadans will be on beaches and Southern Californians in casinos in no time.
The newly appointed five-member board zipped through its agenda in 25 minutes Tuesday, appointing a chairman and establishing a process to select a franchisee to build a steel-wheels-on-rails train system connecting Southern Nevada with Southern California along the Interstate 15 corridor. Ten people attended what someday may be considered a historic meeting.
Board members unanimously selected George Smith, executive vice president of Bank of America Merrill Lynch, to lead the group through June 2017. Board members also requested the Regional Transportation Commission of Southern Nevada to supply support staff resources for the new entity. Board member Tina Quigley is the general manager of the RTC.
Board members slid past the only potential point of contention on the agenda — that the authority’s enabling legislation, Senate Bill 457, signed into law by Gov. Brian Sandoval in May, says the board must select a franchisee by Thursday.
Without acknowledging the deadline, the board approved posting a public notice soliciting applications for a franchisee immediately, putting an Oct. 26 deadline on submissions. Board members now expect to select a franchisee by Nov. 30.
The board will consider the completion of environmental studies on the train route, the level of private investment secured to build the system, the readiness to engage in construction and the status of any pending or completed permit applications when choosing the franchisee.
The only entity even close to meeting that criteria is XpressWest, a private interstate high-speed passenger railroad company led by the Las Vegas-based Marnell Companies, which has been working since 2005 to develop a system.
Once a franchisee is selected, it will be responsible for all aspects of the rail system. The franchisee will be responsible for acquiring land, conducting studies, obtaining permits and certificates, issuing debt, negotiating governmental agreements and coordinating the implementation of the system.
The authority isn’t allowed to allocate funds or obligate any government entity to do so.
However, the law says the authority or a corporation it forms may issue “bonds, notes, obligations or other evidences of borrowing” to finance construction or all or part of the system. Debt would be secured by a pledge of property, farebox or advertising revenue, federal grants or funding, a public or private company or a government entity that signs an intergovernmental agreement with the franchisee and the authority.
Quigley said the board views itself as a resource for the franchisee that ends up building the system.
XpressWest recently announced a joint venture with China Railway International USA, which would invest $100 million in initial capital to build what they are calling the Southwest Rail Network.
The companies said implementation of the deal would occur by the end of the year and construction could begin by September 2016.
Follow @RickVelotta on Twitter. Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893.
