Bechtel Opts Out, Periling Anaheim-Vegas Rail Plans

SANTA ANA —  In what may prove to be the fatal blow to the already-endangered Anaheim-Las Vegas high-speed train project, the primary contractor withdrew its support for the futuristic rail plan, officials said Friday.

Bechtel Corp. severed its ties to the $5-billion project and surrendered its franchise rights, citing a downturn in the global economy and the “uncertain commitment of the state of California,” a company official wrote in a letter to Orange County Supervisor Don R. Roth, chairman of the California-Nevada Super Speed Ground Transportation Commission.

The contractor’s action came three weeks after Gov. Pete Wilson vetoed a bill that would have granted a one-year extension of the California-Nevada commission’s authority over the rail project.

The bill also would have made a planned, 21-mile, elevated monorail line in central Orange County eligible for state rail-bond money.

Despite the two setbacks, Roth said he remained “confident that the . . . commission will continue to push the Las Vegas-to-Anaheim train.”

Last year, the super-speed train commission awarded Bechtel exclusive franchise rights to build and operate the system. The train, planned to operate at 270 m.p.h., has been billed as a way to promote tourism in the two cities and ease highway congestion.

The project was intended to be solely funded by the private sector. On Friday, Roth said he expected that there would be government assistance for the project that would entice new investors, replacing Bechtel.

“The potential approval by the Congress and the Bush Administration of tax-free bonds or loan guarantees should regenerate interest in a public-private partnership to build the . . . super-speed train,” Roth said.

He added that he expects to overcome the state’s legislative obstacles, saying that “Gov. Wilson’s office has assured us that he will support a revised bill to extend the life of the California-Nevada Commission.

Bechtel’s withdrawal from the project was not totally unexpected. In February, company officials said that their initial goal was to finish the line by 1997. But that plan had been extended by five years, when company officials cited some of the same problems that ultimately led to their withdrawal from the project this week. And, in May, Bechtel lost its major Japanese financial partner, C. Itoh.

Walter C. Bell, Bechtel’s vice president, sent the four-page letter to Roth, saying the company regretted leaving the project but felt it necessary because of the “current economic climate.”

Bell urged Roth to continue pursuing the project.

“We believe the vision of the commission is correct. We believe that high-speed rail, and magnetic levitation systems in particular, have a very bright future in the United States.”