The California High-Speed Rail Authority released a supplement to its 2025 Project Update Report last month, outlining the agency’s latest push to construct the state’s high-speed rail project. The report supports the state’s efforts to secure public-private partnerships (P3s) for funding and achieve full operations by 2039.
The supplemental report lays out three business development scenarios meant to attract interest in P3s. The approach has already gained traction following the authority’s June 26 Request for Expressions of Interest, which yielded 31 responses from industry players.
The scenarios include:
- Merced – Bakersfield (cost: $36.75 billion): Completion of 171 miles of high-speed rail line currently under development.
- San Francisco – Gilroy – Bakersfield (cost: $54.4 billion): Construction of high-speed rail infrastructure for nonstop service from San Francisco to Bakersfield.
- San Francisco – Gilroy – Palmdale (cost: $87.12 billion): Construction of expanded high-speed rail infrastructure to Palmdale, connecting to existing Metrolink facilities and additional routes.
The Merced to Bakersfield stretch is currently mandated by law. Design and construction have been underway, with almost 70 miles of guideway complete and 55 completed facilities. More than two dozen additional structures are under construction across four counties. This stretch has a price tag of $36.75 billion and is targeting operations in 2032. As a standalone system, however, the segment is projected to only recover 45% to 74% of its operating costs.
The second development scenario from San Francisco to Bakersfield offers significantly better financial prospects. With a cost of $54.4 billion, the segment would recoup 164% to 257% of its operating costs according to the report, making it profitable. Officials hope similar development scenarios will attract more interest from industry partners.
The expanded version of scenario two is scenario three, which would see the San Francisco line extended through the Central Valley to Palmdale. While ambitious, the plan capitalizes on the high desert terrain for easier development. At $87.12 billion, this route would achieve the highest profitability with a projected recovery rate of 191% to 314% by its 2038 target date.
The report shows the Gilroy-Bakersfield option would serve 8.71 million to 11.83 million riders each year, bringing in $624 million to $883 million in ticket revenue. The Gilroy-Palmdale option would serve 12.46 million to 17.94 million annual riders with $1.1 billion to $1.6 billion in ticket sales. Over 40 years of operations, the options would generate total net profits of $47.5 billion and $98.1 billion, respectively.
The report found that industry respondents said stable state funding is essential for private sector involvement. The authority identified additional revenue sources beyond ticket sales, including parking fees, retail space leasing, advertising, fiber optic infrastructure and express cargo services that could boost returns for private partners.
The project currently has $28.16 billion in available funding. Gov. Gavin Newsom’s proposed extension of the Cap-and-Invest program through 2045 would provide at least $1 billion each year, adding $15 billion to total available funding. The authority faces ongoing federal litigation over $4 billion in grants terminated by the Trump Administration in July 2025.
Since development on the project began, it has generated more than 15,600 positions, with around 1,700 workers involved in daily work, according to state officials.
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