Backers of maglev train say Chinese bank prepared to fund project

By Richard N. Velotta

Wednesday, Feb. 3, 2010 | 2:05 a.m.

Las Vegas Sun

The proponents of a maglev train line between Las Vegas and Southern California say a Chinese government-controlled bank has agreed to loan up to $7 billion to help build the high-speed transportation system.

But the California-Nevada Super Speed Train Commission still has several hurdles to clear before it could move ahead with plans to develop the project between Las Vegas and Anaheim, Calif.

The commission late Monday announced that the Export-Import Bank of China, which has 14 domestic offices and three overseas offices, said it would provide a direct loan that would require the backing of the U.S. government as well as cooperation with Chinese enterprises.

“It is a very positive development for Nevada’s employment picture and very telling that the financiers who are stepping up to bat are the Chinese, the people most familiar with Transrapid Maglev technology,” Neil Cummings, president of the American Magline Group, said in a press release announcing the loan.

American Magline has contracted with the commission to build the system and is partnering with Transrapid, a German company that built a maglev system operating in Shanghai and has since developed upgrades to the technology that are proposed for the Nevada system.

“In China, it has been operating flawlessly for six years, carrying 20 million passengers over 4.1 million miles,” Cummings said.

In an interview today, maglev spokesman Mark Fierro said the Chinese bank’s backing of the project is an employment game-changer for the hard-hit Southern Nevada economy.

Maglev backers view the project as a massive stimulus package for Southern Nevada, with an estimated 90,000 jobs that could be created.

Fierro said development of the project could be one of the most significant economic events in Las Vegas history, because the city would become a virtual suburb of Los Angeles if trains could make the trip from Anaheim to Las Vegas in just more than an hour.

“People in Los Angeles could come to the Las Vegas Strip for dinner,” Fierro said. “This couldn’t be a more perfect technology for the kind of visitor we’re going to attract.”

Fierro said the commission has been in negotiations with the bank — known in the industry as “China Eximbank” — for about a year. He said the bank was unclear about what type of assurances it would need from the federal government to back the loan.

Support from the Chinese bank would help the maglev team’s efforts after the group hit a stumbling block last week. Nevada was left off the list of high-speed rail projects receiving a total $8 billion in federal stimulus funding.

Commission officials viewed the rejection as a double loss for Nevada, because not only was the project not funded, but Florida received $1.25 billion for a rail project that would help Las Vegas’ biggest rival for attracting meetings and conventions — Orlando.

The largest portion of the stimulus funds, more than $2 billion, went to California for a traditional steel-wheels-on-rail project with which the proposed DesertXpress — a Las Vegas-to-Victorville, Calif., line — would link.

U.S. Sen. Harry Reid, D-Nev., said the California project eventually would benefit Las Vegans because the Victorville end of the DesertXpress line would be connected to the California system at Palmdale.

Another problem for the maglev is credibility.

Transportation Secretary Ray LaHood said after the stimulus funds were announced that the reason the maglev project was rejected was because it failed to apply — a claim maglev leaders deny.

In a video released by Reid’s office, LaHood said, “Nevada did not submit any paperwork, any proposal for high-speed rail.”

LaHood also said the California-Nevada Super Speed Train Commission was not eligible to submit a proposal because it was not sanctioned in California.

The commission responded that not only did it file an application, but it has received correspondence from the Federal Railroad Administration, the clearinghouse agency for the high-speed rail proposals, five times in the last 10 years.

The commission also said its plans were jointly submitted with the Nevada Department of Transportation.

Federal Railroad Administration representatives did not return calls on Tuesday.