"Last month, Brightline's Chief Executive Officer Mike Reininger said construction costs were increasing due to rising labor and material costs, in part caused by high demand due to the proliferation of data centers, power plants and transportation projects. Given the increase in project costs we needed to figure out a way to advance the project, Reininger said in an email."
"The federal loan will take the place of a $6 billion bank facility in Brightline West's original financing plan. The company plans to raise equity to cover most of the $5.5 billion increase in construction costs, Reininger said. It initially targeted an equity raise of $1 billion. We have had very productive conversations with USDOT and the Federal Railroad Administration the last few months to continue to move Brightline West forward, Reininger said in an email."
Brightline West's 218-mile high-speed railroad between Southern California and Las Vegas has seen projected construction costs rise nearly 35% to $21.5 billion, up from an initial $16 billion. The Fortress Investment Group-backed developer has applied for a $6 billion federal loan to replace a planned $6 billion bank facility. The company plans to raise equity to cover most of the roughly $5.5 billion cost increase after initially targeting $1 billion. CEO Mike Reininger cited rising labor and material costs driven partly by demand from data centers, power plants and other projects, and said the company has held productive talks with USDOT and the Federal Railroad Administration.
Read at www.mercurynews.com
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