Proposed P3 for California high-speed rail advances

California High Speed Rail Authority

The California High Speed Rail Authority is set to issue a Request for Qualifications for a private partner as the authority considers whether a public-private partnership fueled by private capital is the best way to advance the long-struggling project.

The authority is looking to have a "co-development partner" on board by mid-2026, CHSRA CEO Ian Choudri said Thursday at a board meeting.

"That really puts the program on a fast track," Choudri said. "That will be a very, very critical milestone for us to have a P3 partner selected by mid-2026." Chourdi said the authority's updated 2026 business plan will provide a "clear path forward" for the project.

The private partner would enter into a co-development agreement with the authority to evaluate opportunities to design, build, operate, finance and maintain one or more segments of the high-speed rail program.

The authority announced in May that it may enter into a P3 backed by a securitization of future cap-and-trade revenue included in the state's latest budget. The funds would be enough to complete the initial 171-mile stretch in the Central Valley, but not enough to complete the entire San Francisco to Los Angeles rail line. Choudri said private investment would be key to building out the full system.

In June, the authority released a Request for Expressions of Interest, publishing the results of the RFI in September. More than 30 companies responded to the RFI, most of whom were particularly interested in design-build-finance-maintain or design-build-finance-operate-maintain structures with availability payments.

Some of the RFI respondents include prominent P3 names like Meridiam, ACS Infrastructure Development, Sacyr Infrastructure USA LLC and Plenary Americas.

"Now we are looking to take the next step to issue the RFQ to actually identify and bring on a private partner," Brent Butzin, an attorney with Nossaman who is advising the authority, said at the board meeting. "This is the next step in what has been a multistep process in what will lead hopefully to one or more public- private partnerships."

The push for private investment comes as the rail authority is facing major opposition from the Trump administration. In July, the administration yanked $4 billion of federal grant agreements for the project, alleging that the authority could not meet binding obligations it made to receive federal funding. The CHRSA immediately sued; the money remains in a trust while the legal battle plays out. A federal judge on Monday heard the government's motion to dismiss, and has not yet ruled.

Voters in 2008 approved $9 billion of general obligation bonds for the rail line, which at the time was envisioned as a Los Angeles to San Francisco line that would cost up to $33 billion and be operational by 2020. After years of delays and cost overruns, the estimated cost has ballooned to $128 billion.

The Central Valley segment currently carries an estimated cost of $37 billion. The full route's shortfall is as high as $99 billion, according to the watchdog California High-Speed Rail Peer Review Group.