California has spent nearly two decades relying on taxpayers to finance its high-speed rail project. Now it’s looking to private investors. Whether any step up remains an open question.
The search for private money was always part of the plan. When Californians approved a bond measure to fund the project in 2008, they pictured a system to rival the best in the world. Sleek trains would whisk riders between San Francisco and Los Angeles in just 2 hours and 40 minutes.
Using renewable energy would cut emissions by up to 3 million metric tons annually. Voters were willing to put up $10 billion to make this dream a reality. Everyone knew that wouldn’t be enough.
The bond was never meant to cover the entire cost. State officials envisioned the federal government and private sector contributing equally toward the projected $33 billion budget. But Washington’s support ebbed and flowed with each president.
After years of legal battles with the Trump administration, the state said “the federal government is not a reliable, constructive, or trustworthy partner” in advancing the project. Private capital, meanwhile, has largely remained on the sidelines. The California High-Speed Rail Authority recently announced a $25 million agreement with a consortium of companies that will explore ways to advance the project.
Over the next six months, it will develop funding strategies to expand the project beyond the Central Valley, potentially into San Francisco and Los Angeles. “This agreement reflects growing market confidence in that strategy and the long-term potential of California high-speed rail as a transformative investment in California’s future,” Ian Choudri, the agency’s CEO, said in a news release. Choudri said the agency has spent the past year taking steps to “reposition” the project around “a more commercially focused and delivery-oriented strategy.” Most of the construction is focused in the Central Valley, where the first phase will connect the cities of Merced and Bakersfield.
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