With California High-Speed Rail updates putting its projected total cost at $128 billion, Brightline West’s new high speed rail connection between Southern California and Las Vegas plans to break ground sometime this year for a fraction of the cost. In this VX News interview, Brightline’s Senior Vice President of Corporate Affairs Ben Porritt (a VX2023 Panelist on May 2nd) explains how lessons learned from Brightline’s Florida system, coupled with the availability of new infrastructure funding, and key siting decisions, make possible their planned $10.6 billion railway through the desert. Additionally, Porritt shares how Brightline's advantages as a privately-funded developer and operator of transit demonstrate that there are multiple financial models for building out new passenger rail in the US.
Brightline is operating in Florida and about to construct a second line in California’s Desert. Update our readers on the status of each.
Ben Porritt: You know, this is a big year for Brightline, both with our Florida system and our West Coast system.
In Florida, we are months away from turning on the complete system from Orlando to Miami, which is 235 miles. This is our first project from start to completion. It took us a decade to develop and build this system, and it'll run from Miami all the way up to Orlando.
We've been operating in South Florida for a number of years. Our extension to Orlando will be complete, open, and ready for service this summer. That's a huge moment in time, not just for our company, but it’s a historic moment for passenger rail in the country. Nobody's done this in more than a century.
Then, with Brightline West, I think what makes this a monumental year for that project is we expect, in the second half of this year, to put a shovel in the ground. Not only will we turn our first system on in Florida, but we’ll have our second system under construction and underway. It's a testament to what we're doing as a private entity and a once-in-a-generation opportunity to really kickstart a national high speed rail network, which is really what we've all been after for decades.
Finance and permitting typically plague like rail projects. Both in Florida and with Brightline West, how are Brightline’s ambitious rail projects being financed?
Florida is a $5 billion private investment into the state. That comes with a lot of tremendous benefits on the economic side. We've created more than 10,000 jobs in the state and generated more than $6 billion in economic impact for Florida. These projects have a lot of weight and carry a lot of benefits.
We funded the $5 billion project 100 percent privately. We did that through a combination of private equity and private activity bonds. Private activity bonds, if people aren't familiar with them, are not backed by any government body at the federal, state, or local level. They're backed by the assets of the project. Then, we sell them to private entities and institutions that see the value in the vision that we're creating with Brightline in Florida.
Brightline West is a different project. It's a true high speed rail project. In fact, it'll be the first true high speed rail project in the United States. We started Brightline Florida in 2012, so the prices are different, but comparative. Brightline West is going to be a $10.6 billion project, roughly.
We've already spent $600 million of our own capital to get this project to construction readiness, and then we'll fund the remaining 10 billion similar to how we did in Florida, with one new adaptation. When we acquired Brightline West, the Biden Infrastructure Plan wasn't part of the equation, and now it is. We're going to apply for a multibillion dollar grant to help jumpstart that project. Then, we'll fund the remaining elements of the project predominantly through private means, similar to Florida, with private activity bonds and private equity. It will still be a predominantly privately-funded project, but the good news is that there's high speed rail dollars there to use and we intend to go after those.
What attracts investors to buy Brightline’s bonds? How has Brightline successfully de-risked their bonds?
There are a couple of things to really consider. If you look at connecting the Los Angeles area to Las Vegas, we have one route to get there. That is the I-15 highway, which can take you anywhere between four and six hours; on a holiday weekend: 12 hours, right?
We look at the city pairs that are too short to fly and too far to drive. We look at them in the sense of, are there other alternative routes to get there other than driving? When you look at what we're building in Florida and what we intend to build with Brightline West, the answer is no.
When we started Brightline Florida, we sent a team all around the world, and we identified the key characteristics that can allow passenger rail to be extremely profitable. They are profitable in other parts of the world, for instance, Paris to London, some of the Spanish trains, and the Italian trains. Those are high in ridership bases and high in profitability. The characteristics that we saw were, no other form of transportation, already congested areas, and no other place to build alternative forms of transportation.
Comparing each of our systems that we're building today, in Florida, you have the ocean to the east and the Everglades to the west. The only other way to get people between Orlando and Florida has to be rail. When you look at the system that we're building between Las Vegas and Southern California, you have the I-15, and that's it. The rest is the desert, and a lot of that is preserved land, and federally protected land. If we want to move people between those markets, you have to build a new system. Fortunately, we're going to be able to build right down the middle of that highway, which is attractive for that particular reason.
Second is the amount of trips that are being taken between those two regions today. Between Southern California and Las Vegas, there are 50 million trips today—85 percent of those are taken by car. Everything is transitioning away from automobile use. We know that people want alternative forms of transportation, and so they're attracted to that.
Also, if you look at what we're building out west, it will essentially be the only game in town when it comes to rail between those two networks, which has both leisure and business travelers and a lot of rides. If you're the only railroad out there, you know that the business is going to be good.
Elaborate on the advanced technologies Brightline has incorporated into both rail projects. Has there been a generational change with respect to what drives the locomotives and operates the supporting systems?
When you look at the system in Florida, it's going to be a lot different than what we're building with Brightline West. In Florida, we use Siemens rolling stock. I think one of the things that we're most proud of is that the trains that were using in Florida weren't widely used in the United States. There wasn't a manufacturing base to build those. We've partnered with Siemens, and they built our 10 trains that we're running in Florida today. Those are biodiesel trains, which are more environmentally friendly than a car and certainly a plane. In building those, we built a manufacturing base in this country that now has 160 suppliers in 27 states. That also speaks to the economic benefits that these projects have.
Those trains carry about 250 to 400 passengers depending upon the size. That is a much better benefit to the state of Florida. We share a freight system in Florida, so our corridor is both freight and passenger, so we did have some limitations as to what we're able to put together.
In California, we are planning a fully electric, zero-emission system that will have a catenary system. We have not selected a rolling stock partner. We're going through that process now, but these will be the most efficient trains and the greenest form of transportation in the world.
The other thing that's unique from a technology standpoint is close to 20 years ago, when this system was initially conceptualized, you couldn't get up and down the Cajon Pass between Rancho Cucamonga and the high desert. Now, the trains that we're envisioning and building will allow us to go right down the middle of the I-15 at Cajon Pass, which is pretty incredible for train development.
We also see a technology transfer with these high-speed systems that we're building with Brightline West that will allow us to build a manufacturing base over time right here in the United States so that high-speed rail systems and rolling stock will be developed in America and not just around the world.
Focusing on Brightline West, address the permitting process challenges to date.
One advantage that we had is that we acquired, in 2019, a late-stage development project that was otherwise known as Desert Express or Express West. They had done a decade's worth of work on an environmental permitting record of decision between Victorville and Las Vegas.
We spent the last three years updating that, but our plan called for us to get closer to the Los Angeles area. We've spent the last three years working with the FRA to permit from Victorville to Rancho Cucamonga, where our station site will be.
Permitting a house or a commercial project is not easy. Permitting a 218-mile railroad that crosses state borders is less easy. For these things, you have to go through the proper steps and you have to make sure that what we're building is as environmentally friendly as we'd like. There's no question that we've learned a lot in this process that I think will make building another system in the future easier. It will make it easier for the FRA, who's overseeing this permitting process, and that will make it easier for other systems to be built.
One of the things that we have to do in this country, if we want to expedite the permitting process, is we have to look to build high speed rail within existing transportation corridors. What I mean by that is we're building right down the middle of the I-15. That has been environmentally impacted for decades as cars had been running up and down the highway. That is the biggest advantage that we've had, other than the permits that we acquired. Good news is that our draft permits were publicized in October of last year. They went through a public comment period, and they're being moved to final now. We expect those to be finalized in the next couple of months. Then, we'll be ready to put a shovel in the ground.
It's never easy. It's a time-sensitive and time-consuming process. I think that we all want to see that go faster. The only way to have it go faster is for projects like ours to learn and to put the next person in a better position to do it.
Recently, Brightline West announced the signing of important labor agreements. Elaborate on the value of these agreements for successfully building out the project as planned.
As we get ready to put a shovel in the ground with Brightline West and we apply for what they call a Federal State Partnership Grant, we're building what I consider to be the largest coalition of support that I've ever been a part of. We're going to have a few hundred people who are supporting our grant application. A big part of that is going to be the people who will help us build it and help us operate and maintain it.
We've signed two agreements with labor. One is with operating and maintenance trades. There are 13 of them, and they call themselves the High Speed Rail Labor Coalition. Once that system is built and turned on, they'll be a big part of maintaining the rail, the catenary system, and all of the maintenance in the right of way.
Then, we just signed an agreement with California and Nevada state building trades, which is going to help us mobilize our workforce to build this and to put a shovel in the ground here in 2023.
How will/ does Brightline West interface with current plans for California’s high-speed rail?
That's a project that we're rooting for. We want a high-speed rail network in this country and, certainly, in the regions where we're building our own rail. It's got to connect into other forms of transportation to make it seamless and convenient for the guests and the passengers. Where we are working with them today is making sure that our engineering teams are collaborating to ensure that in the future those systems will be interoperable.
We ultimately see them connecting down in Palmdale. That will ultimately connect into our system in Apple Valley or the Victorville region. We see them as being the north-south rail system and us being the east-west system that moves tens of millions of passengers between Nevada and California.
They're in a bit of a different position than we are; however, we're rooting for them and we want to see them just as successful as we are.
Will Brightline West bring passengers embark and debark at Union Station in Downtown LA?
We don't, initially.
The 218 miles that I'm talking about will go from Las Vegas, where we have a station site just south of The Strip. Then, we have a station site in Apple Valley in a town called Hesperia, which will be a commuter area and then also in Rancho Cucamonga.
What attracted us to Rancho Cucamonga is not just the growing region of San Bernardino County, but we'll share a station site with Metrolink. Metrolink will allow our guests and passengers further access into Southern California and direct access into LA Union Station.
Over time and in the future, it's definitely within our vision and our plan to connect directly into Union Station, but what we can build today will go directly to Rancho Cucamonga.
In closing, could you elaborate on the project advantages Brightline has experienced as a private, rather than a public, developer and transit operator of rail.
I think that there's a lot. I think what we're showing the country is that there are multiple models when it comes to passenger rail. Our country has collectively always said that we wished we had what they had in Europe or Asia. We've just expected the federal government or the public sector to build it. For resource reasons and others, that's just not always possible.
We bring to the table a different perspective. A kind of a resilient can-do attitude. We are also looking at this through the lens of time and money. I think when you look at it through that lens, you have to push further and you have to push harder to get these projects done.
The system that we built in Florida has shown that there is an audience and a high adoption level to get people out of their cars, especially in a part of the country that nobody thought that that was possible. The amount of things that we've taken away from it, both from a commercial standpoint to a construction and development standpoint, is only going to expedite what we're doing with Brightline West. As we move to do this in other parts of the country, we're going to be able to get each system done quicker.
The project in Florida took us, from start to finish, 10 years. What we'll do with Brightline West will be closer to seven years. As we move on to states like Texas and Georgia and other parts of the country, we think that we'll be able to do this quicker and quicker each time and take the advantages that we've learned from the permitting process, the financing process, as well as the commercial process to get these systems up and running.