Germany-based Siemens said Thursday it will build luxury passenger trains entirely in the U.S. for Florida's private high-speed railway expected to begin operation by the end of 2016.
All Aboard Florida plans to connect West Palm Beach, Fort Lauderdale and Miami with hourly service on 195 miles of existing tracks. Phase two will add 40 miles of new track to extend service to Orlando International Airport.
"We see a strong resurgence of rail service in the United States," said Michael Cahill, president of Siemens' rail systems division in the U.S.
The trains will be made in Siemens' solar-powered rail manufacturing hub in Sacramento, California, with traction motors and gearboxes coming from Norwood, Ohio; propulsion containers from Alpharetta, Georgia; and diesel engines manufactured by Cummins in Seymour, Indiana. The locomotives will also be built to meet the new tougher emissions standards set by the federal government.
"They will be cleaner, greener and faster," Cahill said.
The trains will operate at speeds up to 125 mph, which he said is the practical upper limit for diesel trains. Cahill said that can be considered high speed since the typical U.S. passenger rail operates at 79 mph. The goal for service between Orlando and Miami is three hours.
"We definitley will be taking people out from their cars. This is one of the most congested corridors in the country," Don Robinson, president and chief operating officer of All Aboard Florida told CNBC.
A third of the demand is expected to come from business travelers, another third from elsewhere in Florida and a third from out-of-state tourism, Robinson said. Tourists continue to flock to Florida in record numbers, totaling 94.7 million visitors in 2013, including 11.5 million overseas visitors and 3.7 million Canadians.
Robinson said the rail line will be a huge boost, especially to international tourists who will no longer have to choose between a trip to either the northern or southern part of the state. The stations will be in downtown locations and operate with 16 departures from each city seven days a week, he said.
The initial contract covers five train sets, each made up of two diesel-electric locomotives and four passenger coaches for the Miami to West Palm Beach segment. Later plans call for an expansion to seven coaches per train set, as well as five more train sets as service extends from West Palm Beach to the airport. Siemens and All Aboard Florida officials both declined to discuss the value of the contract.
"We are very excited about Florida," Cahill said, noting that it's privately owned. "It could be the beginning of something much bigger. There is a rail resurgence we see across the nation because other modes of transportation are quite congested."
Cahill said Siemens is also very interested in bidding on the California high-speed rail project (It's right in our backyard") but declined to say whether the company was bidding on a contract to build Amtrak's replacement Acela trains.
Amtrak is currently seeking request for proposals to build new high-speed passenger trains for its Northeast Corridor. Bids are due Oct. 1 for up to 28 new Acela Express train sets, with a requirement that they can reach 160 miles per hour when delivered and have the ability to be modified to achieve faster speeds, said Amtrak spokesman Craig Schulz.
Amtrak, which was formed by the federal government in 1970 from the last of the financially failing passenger rail operations, requires significant annual subsidies from Congress. All Aboard Florida has no plans to seek government subsidies, in part because it's starting with better infrastructure.
—By CNBC's Amy Langfield. Follow Road Warrior on Twitter at @CNBCtravel.