HONG KONG -- Privately held U.S. company XpressWest said Wednesday it will terminate a joint venture with a consortium led by China's state-owned China Railway that was planning to build a high-speed rail line between Las Vegas and Los Angeles.
Construction had been scheduled to start as early as September. The announcement sent shares of Chinese railway operators skidding in Hong Kong on Friday, including CRRC, the country's largest manufacturer of train cars. The stock ended down 4.45%.
XpressWest said the the main reason for the decision was construction delays that it blamed on its Chinese partners. It had become difficult to obtain the approvals needed to move the project forward, XpressWest said. The company said it plans to find a new partner to build the rail link.
Chinese media reported the same day that a China Railway International executive responsible for the venture told Xinhua News Agency that XpressWest was irresponsible to make such a statement while talks with CRI were still going on, vowing to defend its interests.
The decision to proceed with the project was taken before President Xi Jinping's visit to the U.S. in September 2015 as part of Xi's "going out" strategy.