California’s high speed rail project will need a significant infusion of cash in the near future to get built. And by significant, I mean tens of billions of dollars. Maybe the Chinese will ride to the rescue? From Business Insider, maybe there’s hope:
California still needs a large amount of funding to complete its rail line. About $13.2 billion of the estimated $68 billion has been raised through state and federal funds, plus a pledge of cap-and-trade proceeds, or funds paid by companies to offset carbon emissions.
The Chinese team proposed that under “appropriate loan conditions,” the Export-Import Bank of China could “satisfy the financing needs of the project.”
But the Chinese also warned that California should provide additional public financing and guarantee future project debt to appease uneasy investors.
The key demand there is that California provide that backstop financing and debt guarantee. But those options are off the table per the 2008 voter-approved bond initiative that launched the project, according to the High Speed Rail Authority.
So high speed rail backers need to hope that these foreign investors will come down off of those terms. Otherwise, the project will become a glorified Amtrak improvement at best — or a stranded asset at worst.