A Chinese rail consortium is teaming up with private US investors in a high-speed rail project linking Las Vegas with Los Angeles. The deal underlines China's ambitions to expand on the international rail market.
China Railway International USA and US railway consortium XpressWest announced in a joint statement Thursday that they would launch a joint venture aimed at building the first high-speed railway project in the United States, scheduled to start in September 2016.
China Railway International USA is a consortium based in Nevada and includes China Railway International, China Railway Group, CRRC Qingdao Sifang, China Construction America and CRSC International. XpressWest is a private interstate high-speed passenger railroad company led by the Marnell Companies, which also specializes in architecture and construction in the US gaming capital.
XpressWest and the Chinese firms said in their statement that the accord would help accelerate the project without disclosing details of how it would achieve that. Additional regulatory approvals will be required before the construction begins, expected early as September 2016.
"The project will serve as a model of international cooperation and will firmly establish a United States-based high-speed rail industry that will result in significant job creation throughout the Southwest with construction planned to commence as early as September 2016," they added.
China's official news agency Xinhua reported Thursday that the joint venture would have $100 million (113 million euros) in intitial capital, without saying how much would come from China.
The proposed new 370-kilometer (229-mile) rail link, dubbed the Southwest Rail Network, will connect the western cities of Las Vegas and Los Angeles.
Xinhua quoted China Railway International chairman Yang Zhongmin as saying: "As China's first high-speed railway project in the United States, the project will be a landmark in overseas investment for the Chinese railway sector and serve as a model of international cooperation."
Strategic move for China's railway industry
The deal is the latest in a series of deeper Sino-American business ties to be unveiled before President Xi Jinping visits the United States next week.
Gary Wong, a Hong Kong-based analyst at brokerage Guotai Junan, estimated that the train project could be worth $5 billion. He said that although it would likely offer the many Chinese firms involved little financial benefit, it was significant for their long-term goals.
"If this opens up the US market for them, opportunities for future expansion will increase. And if (their technology) is used in the United States, it will be easier for them to sell to other countries," he said.
CRRC, the world's biggest train maker by revenue, is leading China's aggressive pursuit of overseas high-speed rail deals in competition with traditional suppliers Siemens and Alsthom from Germany and France.
The United States has lagged far behind China, Japan and Europe in high-speed rail development, while China has blazed ahead, building 17,000 kilometers of railway in the 12 years since it began constructing bullet trains.
tko/uhe (dpa, AFP, Reuters)