Facing growing uncertainty over its financial future, the California High-Speed Rail Authority is actively seeking private investment to shore up funding for the long-delayed $128 billion bullet train project. The effort comes amid potential threats to billions in federal support and mounting pressure to deliver on a promise made to voters more than a decade ago.

The authority’s plan to link Los Angeles and San Francisco with trains traveling up to 220 mph has suffered from persistent delays and escalating costs. Ten years after construction began on the first 119-mile segment through the Central Valley, that section is now 81% complete. Yet, the full project timeline remains murky, with no target date for completion of the full corridor. The earliest projected service on the Central Valley segment is now estimated between 2030 and 2033.

In February, U.S. Transportation Secretary Sean Duffy initiated a review of the California High-Speed Rail Authority, raising the possibility of rescinding up to $4 billion in federal grants. President Donald Trump added further uncertainty when he declared earlier this month that the federal government will not fund the project, calling it “totally out of control.”

The latest cost estimates released in the authority’s 2024 business plan peg the full build-out between San Francisco, Los Angeles, and Anaheim at up to $128 billion. But the authority’s March 1 update report shows it has just $26.7 billion to $29.7 billion in committed and available funding through 2030—less than a quarter of the total cost.

In response to this looming shortfall, California High-Speed Rail Authority CEO Ian Choudri said the state is aggressively courting private partners. “Our outreach to the private sector has been met with strong and growing interest,” Choudri said in a May 15 news release. He noted that an industry forum held in January drew interest from a wide range of stakeholders, “including interest from private equity firms exploring new financing opportunities.”

A formal request for expressions of interest is expected soon and could pave the way for public-private partnerships. These partnerships might involve monetizing assets such as trainsets, stations, and track access. Additional revenue streams could include fast freight delivery, transit-oriented developments, real estate ventures, fiber optic rights-of-way, and leasing arrangements for select infrastructure assets.

Choudri emphasized the importance of fiscal discipline and improved project delivery. The authority, he said, is working “to find cost savings, build more economically and streamline operations to build the rail line more efficiently.” State legislative collaboration is also ongoing to maintain and potentially expand California’s public financial commitment to the project.

Gov. Gavin Newsom’s revised FY 2026 budget proposal includes a provision to allocate $1 billion annually from the state’s cap-and-trade program to support the high-speed rail effort. The cap-and-trade system, which limits carbon emissions and allows trading of pollution credits, feeds the state’s Greenhouse Gas Reduction Fund—one of the financial lifelines supporting infrastructure aimed at reducing greenhouse emissions.

The project, first approved by voters in 2008 through Proposition 1A, was envisioned as a transformative transportation solution that would reduce traffic congestion, slash emissions, and boost regional economies. While it has delivered hundreds of miles of right-of-way and major engineering milestones, skepticism continues to mount as critics question the state’s ability to deliver on its vision.

Nonetheless, the authority remains steadfast in its commitment to moving the project forward—even if that now depends more heavily on private capital than originally envisioned.

Originally reported by Dan Zukowski in Smartcities Dive.