BEIJING/SHANGHAI (REUTERS) - A consortium of Chinese rail firms has teamed up with private United States company XpressWest to build a high-speed rail line in the US, the latest push by Beijing to export its high-speed rail technology and tap lucrative offshore markets.
China Railway International USA and private rail venture XpressWest said in a joint statement on Thursday that they will form a joint venture to accelerate the launch of a high-speed rail linking the western cities of Las Vegas with Los Angeles.
The deal marks the latest attempt in China's increasingly aggressive pursuit of overseas high-speed rail deals after the country built the world's longest network in less than a decade. Beijing recently clinched contracts in Russia, although it has faced hurdles in Mexico and Indonesia due to bureaucratic flip-flops in those countries.
XpressWest, a private venture by a Las Vegas-based hotel and casino developer, was given the green light in 2011 to construct and operate the 370km high-speed line, according to its website. The project has US$100 million(S$140 million) in initial capital, the firms said in the statement, released at a government-organised forum ahead of President Xi Jinping's upcoming visit to the United States.
China Railway International USA is owned by a consortium made up of subsidiaries from state firms China Railway Group , CRRC Corp , China State Construction Engineering Corporation and China Railway Signal & Communication Corporation.
Guotai Junan analyst Gary Wong, estimated the XpressWest project was worth US$5 billion which he said would likely offer the many Chinese firms involved little financial benefit, but was significant as a deal to help open the undeveloped US high-speed rail market. "If this opens up the United States market for them, opportunities for future expansion will increase. And if (their technology) is used in the United States, it will be easier for them to sell to other countries," he said.
The firms did not elaborate on how the Chinese consortium would help accelerate the project. Additional regulatory approvals will be required before the construction begins, expected early as September 2016, they said.
United States government officials have tussled for years over building high-speed rail, leaving the country far behind Europe and Asia in this area. Most of the country's dozen or so projects have struggled to gain traction, with a $68 billion scheme in California the farthest along.
Before they were merged into CRRC Corp, train makers China CNR and CSR Corp had expressed interest to sell high-speed trains to the California project.