Newsom Signs Bill Mandating Funding Plan for California's High-Speed Rail
_106052971.jpg)
Sacramento, CA - The recently approved Assembly Bill 377 (AB 377) requires the California High-Speed Rail Authority (CHSRA) to develop a comprehensive plan to fund the initial segment of operations of the high-speed rail system, the same which was signed into law by Governor Gavin Newsom on Dec 15 2022. As a critical component of the rail governance system, the CHSRA is expected to incorporate updated cost estimates of construction, comprehensive risk evaluations, and multiple options for service commencement into its 2026 business plan for the segment extending from Merced to Bakersfield.
The bill intends to make the project less complex and easier to manage by requiring a thorough financial roadmap, a high-level accounting of all project costs, and increasing the financial transparency within the project. It is claimed the project has faced years of poor governance, lack of management, continuous delays, bill embellishment with enormous costs, lack of funds, and poor mismanagement. Supporters of the project assert that it has so far been a victim of rampant mismanagement, and remains an unfinished undertaking. The construction for the segment is underway, with 119 miles of guideway construction underway, it remains the first phase of the proposed San Francisco to Los Angeles connection.
However, this specific segment still has a major funding deficit, projected at about $7 billion which needs to be settled by May 1, 2026, to avoid possible delays to the project. This condition follows the federal government pulling back $4 billion in project funding due to consistent delays and funding issues. Governor Newsom indicated the bill seems to reflect the activities to date by the Authority, but also expressed a need for more actionable policies that would facilitate faster project delivery.
Since the establishment of the Authority, it has been mandated to submit a business report every two years which includes service, timeline, financial scenario, and all possible risks. The passage of AB 377 certainly shows the willingness of the legislature to focus on the funding of the project especially when the full estimate for Phase 1 has now skyrocketed to between $89 billion to $128 billion. Some of the more immediate options the Authority is considering include the state’s cap and trade program, private funding, and even litigation to restore federal funding. One of the critical obstacles that stands in the way of executing the ambitious California high-speed rail network is to make sure these funds are acquired.
--Advertisement--
_732792576_351x234.jpg)
