Brightline hopes to begin operating high-speed trains between Las Vegas and Los Angeles by 2028.
Brightline West, Siemens
Brightline West, billionaire investor Wes Eden’s 218-mile rail project to connect Las Vegas to suburban Los Angeles with electric bullet trains, is raising $2.5 billion from private investors in a tax-exempt bond offering as it looks to launch passenger service until the end of 2028.
The funding push, backed by infrastructure bonds offered by California and Nevada, comes on top of a $3 billion grant to Brightline received by the Biden Administration last year. The company has slated construction to begin in April 2024 in Las Vegas, though the focus so far is preparatory work for the railroad adjacent to the Mojave Desert. Miami-based Brightline, which operates Florida’s only private passenger railroad, said in an investor presentation that it expects revenue of at least $1.4 billion and 8.6 million passengers by 2031.
“Full-scale construction should begin this year,” said Ben Porritt, the company’s senior vice president of corporate affairs. Forbes. It will occur simultaneously at four separate construction sites in Nevada and California.
The new offer, combined with the federal grant, additional infrastructure bonds and bank financing the company is seeking, will cover the roughly $12.4 billion needed to complete the line. It will run from Vegas to Rancho Cucamonga, a city about 40 miles east of Los Angeles that is connected to it via an existing commuter rail line, with two stops in the desert towns of Victor Valley and Hesperia. And although Brightline had hoped to have trains in time for the 2028 Los Angeles Olympics, the target date to launch service is now December 2028.
The Vegas train is a gamble for Edens, co-founder and chairman of Fortress Investment Group Forbes estimated to be worth $3 billion, but could be a game-changer that finally brings high-speed rail to the U.S. Its target opening date is years away when California expects to open the first section of the publicly funded by the state that is expected to cost more than $100. billion to connect San Francisco to Los Angeles. It will operate at up to 200 miles per hour, much faster than Amtrak’s Acela line which reaches 150 mph on runs between Boston and Washington, DC. Even after the upgrades — new tracks and trains funded by the Biden Infrastructure Act — the Acela’s top speeds will only increase to 160 mph.
Brightline West
Brightline’s project is dramatically cheaper than California’s 500-mile project because it’s a shorter route on a right-of-way that was secured decades ago. It would also run mostly down the center of U.S. Interstate 15. Running trains at grade with an existing track eliminates the need for costly bridge-like viaducts that California is building for its system. The Brightline West route also avoids the suburban roads and intersections faced by Brightline’s Florida trains, which maintain its speed and have occasionally led to collisions with cars and even emergency vehicles.
The company expects a trip between its Las Vegas station and the Southern California terminal to take about two hours, or half the time of a car trip under ideal conditions.
Morgan Stanley is leading the sale of Brightline bonds, which have not yet been rated.
