Proposed High-Speed Rail to Las Vegas Likely to Fail

August 22, 2012

XpressWest, the proposed high-speed rail line from Victorville, Calif., to Las Vegas, Nev., is based on a series of overly optimistic, outdated market and ridership assumptions that make the project likely to fail and cost taxpayers up to $6.5 billion, say Wendell Cox, an adjunct scholar with the National Center for Policy Analysis, and Adrian Moore, vice president of policy at the Reason Foundation.

  • The money to build the proposed high-speed rail would come from a taxpayer-guaranteed loan of up to $6.5 billion.
  • The revenue forecasts were completed in 2005 when economic conditions were generally good, both nationally and in the Las Vegas urban area.
  • If XpressWest is to fail, as the data suggests is a strong possibility, then the company will default on the loan and taxpayers are the ones paying for it.

The train would only be an 80 mile to 100 mile trip for most, targeting an audience coming in from Los Angeles and those in areas outside of Las Vegas. According to Cox, people wouldn't save time or money by using the train.

  • The study shows that XpressWest's ridership numbers are overestimated by 70 percent because most people coming from Los Angeles would rather drive the rest of the way from Victorville than take stop and take the train.
  • However, if the customer markets ends up being comprised of people that live in the Riverside-San Bernardino-Ontario metropolitan area, ridership would be 75 percent lower than current projections.
  • Even worse, if the customer market for XpressWest turns out be people who live in the immediate Victorville area, ridership would be 97 percent lower than current estimates.

Source: Wendell Cox and Adrian Moore, "The XpressWest High-Speed Rail Line from Victorville to Las Vegas: A Taxpayer Risk Analysis," Reason Foundation, August 16, 2012.

 

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