CALIFORNIA High-Speed Rail Authority (CHSRA) issued a project update on August 22 outlining what it called “a clear path forward to connect the high-speed rail system to Northern and Southern California via the Central Valley by 2039.”
“Contingent on sufficient, long-term funding,” CHSRA says the plan “will achieve commercial success at the earliest possible stage, ensuring the system begins generating compelling economic return and maximising the value of California’s investment.”
CHSRA says to date 55 structures and 112.6km of the initial 191.5km Central Valley Segment (CVS) linking Merced, Madera, Fresno and Bakersfield have been completed. According to CEO, Ian Choudri, over the past six months CHSRA has deliberated over input from stakeholders and the California State Legislature to right-size the project to deliver a high-quality, cost-effective high-speed railway.
CHSRA says that it has $US 28.16bn in capital funding, which includes an estimated $US 5.5bn from Cap-and-Invest up to 2030 and retention of federal funds. California governor, Gavin Newsom’s 2025-26 fiscal year budget proposal includes extending the Cap-and-Invest programme to 2045 with at least $US 1bn in annual funding for CHSRA. This would provide at least $US 15bn in additional funding, bringing total capital funding to $US 43.16bn. CHSRA included the $US 4bn in federal funding, currently the subject of litigation, as part of its total capital funding figures.
CHSRA proposes three scenarios to advance the project to connect the CVS to Northern Los Angeles County at Palmdale in the south, and in the north via Gilroy to San Jose and from there via the electrified Caltrain line to San Francisco.
Scenario 1: Merced - Bakersfield CVS
CHSRA says it will complete (as required by statute unless otherwise directed by the California State Legislature) the CVS Early Operating Segment which is now estimated to cost $US 36.75bn. CHSRA says it was able to offset $US 14.28bn in cost increases, roughly a 30% cost saving, by resequencing work, refining design criteria, and adopting innovative engineering methods. CHSRA says that without the reassessment, scope increases, inflation and added cost and contingency would have increased the cost of the CVS to around $US 51bn.
However, there are new risks, including ongoing tariff disputes at federal government level and disruption to global trade. The 2024 Business Plan estimated the cost of delivering the CVS at $US 35.3bn with a confidence level of 65%. CHSRA says it will complete the CVS and the Merced and Bakersfield extensions within the original schedule and prior to 2033, with revenue service starting on January 1 2032.
Recent ridership and revenue modelling shows 1.6-2.2 million in annual ridership based on eight high-speed round-trips per day. According to CHSRA, this would generate passenger revenue of $US 39.28m to $US 55.6m, plus ancillary revenue of around $US 16m to $US 34m. However, operation and maintenance costs are forecast at between $US 120.6m and $US 122.1m annually.
“Based on these projections, the Merced - Bakersfield corridor operating as a standalone high-speed line with transfer connections to other rail services would not be able to cover its total operational expenses,” CHSRA says.
Assuming a baseline of at least $US 1bn per year in Cap-and-Invest funding up to 2045, as contained in the governor’s proposal, the Merced - Bakersfield segment will no longer have a budgetary funding gap. However, CHSRA says it will need to work with the Trump administration and California State Legislature to coordinate the timing of future cash receipts with capital expenses in order to maintain the proposed schedule.
Scenario 2: Connecting San Francisco to Bakersfield
This is estimated to cost $US 54.4bn and would be operational by early 2038. CHSRA says it would sequence construction to leverage Central Valley infrastructure while extending the high-speed line north and west to Gilroy. High-speed trains would continue to San Francisco, using a “state solution” to connect Gilroy to San Jose and the existing Caltrain electrified line north of San Jose. Construction can start on this extension while work on the section from the Central Valley Wye to Bakersfield is underway.
“Direct high-speed rail service to San Francisco will have substantial ridership and revenue impact, providing the opportunity for commercial success,” CHSRA says.
An hourly San Francisco - Bakersfield service is expected to attract ridership ranging from 8.71 million to 11.83 million, which would bring in $US 623.72-882.93m in annual passenger revenue. Ancillary revenue is projected at between $US 89m and $US 196m. Based on operating and maintenance costs of $US 419.19- 435.47m, CHSRA says the cost recovery ratio is estimated at between 164% and 257%.
To help fund this segment, the state could postpone the Merced extension with the savings reallocated to building the line to Gilroy.
Scenario 3: Connecting San Francisco to Los Angeles County
The Gilroy - Palmdale scenario is estimated to cost $US 87.12bn and would be operational in early 2038. “This scenario would increase the scale and impact of the system with a further extension of high-speed rail infrastructure to Palmdale,” CHSRA says.
As with Scenario 2, CHSRA would leverage Central Valley infrastructure, extend the high-speed line to Gilroy, and rely on other improvements between Gilroy and San Francisco.
Two high-speed trains per hour would operate from San Francisco to Palmdale, one as a limited-stop express. One train per hour would continue over the High Desert Corridor to Victor Valley, where passengers could connect with Brightline West services to Rancho Cucamonga and Las Vegas. At Palmdale, trains could connect with a Metrolink/Amtrak Surfliner express service to Los Angeles and San Diego, transforming the system from a regional corridor into a statewide service.
CHSRA says under Scenario 3 ridership would increase to 12.46-17.94 million, increasing passenger revenue to between $US 1.1bn and $US 1.6bn annually. Ancillary revenue is projected to be around $US 110-254m. Operating and maintenance costs would be between $US 602m and $US 635m, resulting in a recovery ratio of 191% to 314%.
“This revenue stream would be instrumental to the state’s efforts to fund and complete the full Phase 1 high-speed rail system,” CHSRA says.
CHSRA has also produced financial forecasts for scenarios 2 and 3 that include construction of the Merced extension. While ridership and revenue figures for each are slightly higher, operating and maintenance costs would increase more than revenue.
The report outlines several opportunities for the State of California “to support the project, including stable, long-term funding, environmental streamlining, actions to address permitting and third-party coordination, and updates to state law to provide needed construction flexibility, among others,” according to CHSRA.
In conclusion, CHSRA says completing the Gilroy - Palmdale segment would provide statewide rail service to a majority of Californians and promises the highest return on investment for the state, while completing the Gilroy - Bakersfield Scenario 2 is a cost-effective way to achieve profitable commercial operations at the earliest possible opportunity with less additional funding needed.
