California High-Speed Rail Authority Receives Federal Regulatory Authority to Construct Initial Segment of Passenger Rail System

Yesterday, the federal Surface Transportation Board (STB) authorized the California High-Speed Rail Authority (Authority) to construct the initial 65-mile segment of its passenger train system between Merced and Fresno, California.  The system will eventually connect the major population centers of the state on over 800 miles of rail lines, operating at speeds up to 220 mph.

"We welcome this decision and will continue to work with the Surface Transportation Board on the implementation of the nation's first high-speed rail program," said Jeff Morales, the Authority's chief executive. "We can now focus on starting major work on the project this summer and providing thousands of jobs in the Central Valley."

The Authority expects to award a $985 million contract shortly to a joint venture led by Tutor Perini to design and construct the first 29-mile section of the high-speed train system in the San Joaquin Valley, from Madera County to Fresno.

In authorizing construction of this initial Merced-to-Fresno segment of the larger high-speed train system, the STB exempted the Authority from the more detailed and lengthy application process that would otherwise govern federal licenses to construct rail lines.  The STB noted that the Authority's rail line will be a "valuable addition to the passenger rail transportation system in California," and adopted the extensive environmental analysis already completed by the Authority for this segment.

The STB, a federal economic regulatory agency, has jurisdiction over the construction of rail lines as part of the interstate rail network.  The STB determined that it had jurisdiction over the Authority's high-speed train system because the STB found that, despite being located entirely in the state of California, the Authority plans to interconnect its system with other interstate services like Amtrak.

The STB's decision in this matter will establish important precedent for the future federal regulation of state-supported passenger rail systems.

DesertXpress High-Speed Passenger Rail Line Receives Construction and Operating Authority From STB

Today, DesertXpress Enterprises, LLC (“DXE”), a group of private investors, received authority from the U.S. Surface Transportation Board (“STB”) to construct and operate a 190-mile dedicated high-speed passenger rail line between Las Vegas, NV and Victorville, CA.  Once the line is constructed, trains will operate at up to 150 miles per hour and provide an energy-efficient alternative to automobile travel on the I-15 corridor and air travel between these two areas of the country.

DXE requested that the STB grant authority to construct and operate this line under an expedited review process that allows for an exemption from certain statutory prior approval requirements.  The STB granted DXE’s request, citing the many benefits of the project.

The STB found that the project will clearly promote the rail transportation policies set forth in the federal agency’s governing statute.  By providing a passenger rail transportation option in this market and alleviating automobile congestion on the I-15 freeway, the project will reduce air pollution and overall fuel consumption.  The proposed line also will alleviate constraints on the expansion of air travel in Southern California and is expected to have a multi-billion dollar beneficial impact on the economies of both Nevada and California. 

The majority shareholder in DXE – The Marnell Companies – is an experienced architect and real estate developer with large-scale project development, construction and finance experience.