California High-Speed Rail Authority Releases 2026 Draft Business Plan: Key Concerns and Projections

On February 28, 2026, the California High-Speed Rail Authority unveiled its 2026 Draft Business Plan in a significantly altered post-pandemic context. The new plan is comprehensive yet raises serious concerns regarding escalating costs, unreliable ridership projections, and potential legal misalignments.

Rising Costs and Financial Gaps

The latest estimates suggest that completing the Merced-to-Bakersfield segment will require approximately $34.76 billion, representing a $2 billion decrease from previous projections, which the Authority attributes to a “bottom-up cost review.” This figure, however, does not include the contentious segment between Tamien and Gilroy, which is essential for connecting major urban areas.

Buildout Scenarios and Their Financial Implications

The plan outlines three primary buildout scenarios, each with staggering costs:

• San Francisco to Bakersfield: $60.34 billion total ($25.57 billion net of the Merced-Bakersfield cost)
• San Francisco to Palmdale: $96.73 billion total ($61.97 billion net)
• Phase 1 — San Francisco to Los Angeles/Anaheim: $126.20 billion total ($91.43 billion net)

These figures are calculated at a P65 contingency level, which indicates a 65% probability that actual costs will meet or fall below the stated amounts.

Funding Challenges

In an analysis prepared for the California Assembly Transportation Committee, the Legislative Analyst’s Office highlighted a $2 billion funding gap for the Merced-Bakersfield segment alone. This projection assumes the successful implementation of various statutory changes and estimated savings, adding layers of uncertainty.

Ridership Projections: Questionable Assumptions

One of the more audacious claims within the 2026 Business Plan is the anticipated ridership of 23.6 to 30.6 million passengers annually for Phase 1. However, this projection hinges on a modest frequency of two trains per hour, which stands in stark contrast to Europe’s robust networks—Madrid-Barcelona operates around 90 trains daily, while Milan-Rome-Salerno runs over 160.

Travel Time Assumptions

The planned travel speeds show a stark difference: trains can reach up to 220 miles per hour on dedicated tracks; however, the “blended system” approach will limit speeds to 110 miles per hour on existing tracks. This discrepancy raises doubts about the feasibility of achieving mandated travel times under California law.

Legal Compliance and Operating Subsidies

As laid out in Proposition 1A, the planned service mandates no operating subsidies. Yet, the Authority’s own projections reveal a necessity for such support, directly contradicting the law’s stipulations.

Concerns Over the Tamien to Gilroy Segment

Significantly, the Tamien to Gilroy segment—a critical part of the northern route—has been notably excluded from primary cost estimates, with vague placeholders ranging from $2 billion to $5 billion. This omission could lead to substantial underestimations regarding overall project costs.

CEO Leadership Under Scrutiny

Compounding the project’s challenges, CEO Ian Choudri’s leave of absence—amid legal troubles—comes at a pivotal moment. His absence during the upcoming oversight hearings raises concerns about the Authority’s ability to effectively advocate for necessary financing and legislation.

The Path Forward: Public Transparency and Legislative Action

To move forward, the Authority must address its legal and financial shortcomings transparently. A return to the ballot, articulating the project’s true costs and implications, appears to be the most honest solution.

The California High-Speed Rail initiative continues to be a topic of significant scrutiny as stakeholders await the Authority’s next moves and the legislative response to the 2026 Draft Business Plan.

For more information on California’s High-Speed Rail developments, you can refer to the California High-Speed Rail Authority and the California Assembly Transportation Committee.