The US state of California has approved the allocation of $600m in tax-exempt bonds for Virgin Train USA’s XpressWest, a proposed high-speed rail project.
A state finance committee approved the move that will enable Virgin Trains USA to sell bonds for the project.
According to local publications, Virgin Trains USA can leverage up to four times the allocation amount and raise up to $2.4bn.
The company needs to complete the bond sale by 1 October. Company representatives told Bloomberg that they will initiate the process after they secure all requisite approvals.
XpressWest is a private venture proposal that involves building a high-speed rail project to connect southern California and Las Vegas, Nevada. It will originate 145km north-east of Los Angeles and terminate in Las Vegas.
Previously known as Brightline, Virgin Trains USA acquired XpressWest high-speed rail project in 2018 to expand services to the West Coast.
The move comes at a time when the US is battling to contain the spread of Covid-19, which may further delay the rail project. On the other hand, Nevada is yet to approve the project.
Earlier, California Governor Gavin Newsom indicated that the state agencies may not receive new funding in next year’s budget.
XpressWest is Virgin Trains’ second high-speed rail project.
It currently operates in rail line in Florida between Miami, Fort Lauderdale and West Palm Beach.
However, the services are now suspended due to the pandemic crisis. In the US, more than 600,000 people are infected by this novel coronavirus.