PROJECT FINANCE

Unlike other Greenfield industries, by implementing U.S. high-speed rail through the XpressWest, the required federal assistance will not be based upon the government merely handing out cash through grants and subsidies but rather be facilitated through an existing underutilized loan program; the Railroad Rehabilitation and Improvement Financing (RRIF) program.  The RRIF program’s charter authorizes the Federal Railroad Administration (FRA) to lend funds to projects like the XpressWest and is today’s most important tool for expanding our nation’s transportation infrastructure.  RRIF, unlike other credit vehicles, offers the flexibility to meet our rail and related intermodal investment needs.  Further, the Secretary of Transportation has broad discretion to use RRIF resources to implement and support projects that exemplify the goals of the RRIF program.

In December 2010, XpressWest submitted its RRIF loan application, which is currently being reviewed by the FRA’s Independent Financial Advisor. On average, the Federal Government’s loan evaluation process for substantial projects can take an average of 19 months to review.  The XpressWest is no exception to this rule and as a result, expects the Federal Government’s process to be complete some time this year.

The XpressWest will be financed through a combination of private capital and RRIF loan funding.  Under the terms of the RRIF program, the XpressWest plan of finance demonstrates that the Loan will be repaid in full over 35 years including payment of interest.

RRIF financing is ideal for XpressWest because it is the only high speed rail project in America positioned to jump-start a new industry that will have lasting public benefits and produce tangible near-term benefits that satisfy and achieve the government’s goals and priorities: creating jobs and stimulating the economy, enhancing the environment, connecting regional economic centers, creating a safe and efficient transportation choice, saving travelers cost and time, incentivizing private investment in projects for the public, and promoting high speed rail development in the U.S. now.  XpressWest will achieve these goals through a unique private-public relationship based upon government financing and repayment obligations borne by the private sector.