Rail System Speeds Closer to a Reality
Dozens of international investors are poised to float a proposed high-speed rail system that would take San Francisco and Peninsula residents to Southern California in 2½ hours, officials said Wednesday.
More than 60 international investors were interested in helping bankroll the $42 billion train system, said Rod Diridon, a member on the California High Speed Rail Authority Board. About $10 billion in private investments is needed for the train system to be built, officials said.
“We don’t have a project unless we have a private component,” Diridon said. “These private investors are ready to go.”
The authority’s financial firm, New York-based Lehman Brothers, met with about 80 investors representing 50 different firms from around the world last Thursday. The investors included train operators, construction firms and financiers. Before Thursday’s meeting, the level of serious interest from private investors was relatively unknown, rail authority Executive Director Mehdi Morshed said.
“The level of interest from private finance people from all over the world was amazingly good,” Morshed said.
Rail proponent and state Assemblymember Fiona Ma, D-San Francisco, said the reaction from private investors was very encouraging.
“It kind of signals to the world and California that it’s finally happening and that this is a reality,” Ma said.
The project is slated to be completed by 2020. The network would link all of the state’s major population centers, including Sacramento, the Bay Area, the Central Valley, Los Angeles, Southern California’s Inland Empire, Orange County and San Diego.
Electric-powered trains on the 700-mile rail system would travel up to 220 mph and the trip from San Francisco to Los Angeles would take 2½ hours and cost $55 for a one-way trip.
Voters are being asked in November to support the state in taking out a $9.95 billion bond to fund the first phase of the project. Strong private financing increases the likelihood of voters approving a $9.95 billion bond for the November ballot, Morshed and Diridon said.
A recent poll indicated 58 percent of Californians would support the bond, which could then be used as leverage for another $9 billion in federal funds, Diridon said.
Gov. Arnold Schwarzenegger has declined to formally endorse the bond, citing a lack of guarantee in private financing. He could veto the bill for a bond if passed by the Legislature.