LAS VEGAS (KTNV) — A proposed high-speed rail line connecting Southern Nevada with Southern California is facing a new challenge.
Brightline says they are experiencing a “minor setback” due to recent bond funding being postponed.
In September 2020, the company told 13 Action News that they hoped to sell about $3.2 billion in bonds for the initial financing of the privately funded project.
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Brightline says that while a deal was reached, it would have been too restrictive.
“These high-speed rail projects have been proposed for the past 35 years, none of which have been successful,” says Steve Budin, a financial expert.
Brightline says financing was postponed due to market conditions, including the pandemic and the election.
13 Action News financial expert Steve Budin says those factors may have played a role in the postponement, but there could be more.
“The bottom line is these bonds are extremely risky and it takes a special investor to have the courage to buy these kinds of bonds because if the rail doesn’t work, you can lose all your money,” says Budin.
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Budin says the route’s destination of Victorville, a city over an hour drive outside of Los Angeles, may be cause for a bit of apprehension.
“Why would somebody want to stop short and then have to get in a car and deal with traffic or rent a car, it just doesn’t seem like a complete option,” says Budin.
Brightline believes while this may impact the timeline of construction, they still plan to break ground soon.
A Brightline representative says they will re-evaluate before entering the market again.
“Hopefully this company can take another shot at the bond offering in the future and make it successful,” says Budin.