California high speed authority taps Plenary-backed team for P3

The California High Speed Rail Authority has tapped a Plenary Americas-backed consortium for a pre-development agreement that's the first step in a public-private partnership to help deliver the struggling bullet train.

The authority said it received one Statement of Qualifications in response to its Request for Qualifications, floated in December, to bring in a private partner to advance the project, which has been stung by the Trump administration's withdrawal of federal funds among other political and financial headwinds.

Momentum Alliance Partners includes Plenary Americas US Holdings Inc., CDPQ Infra Inc., Keolis Rail Services America, LLC, SV California HSR, Inc., Jacobs Project Management Co. / Jacobs Solutions Inc. (J), Sener Engineering and Systems, Ltd, and the Steer Group Ltd.

"We are wrapping up negotiations right now," CHSR Authority CEO Ian Choudri said Wednesday at the U.S. High Speed Rail Conference in Washington, D.C. "My intent is to get it done before the next board meeting," set for June 1.

The award launches a six-month pre-development agreement process in which Momentum will evaluate opportunities to design, build, operate, finance and maintain one or more segments of the high-speed rail program. The review will focus on key factors like availability versus revenue payment structures, where to build and opportunities to commercialize assets.

The board does not need to approve the PDA award as it falls under a certain monetary threshold.

The P3 will be backed by a securitization of future cap-and-invest revenue from the Greenhouse Gas Reduction Fund that allocates $1 billion through 2045.

The authority is currently exploring bonding or other financing legislation that would allow the state to securitize the $1 billion cash flow up front, according to its 2026 business plan.

The authority is ready to entertain a range of proposals, Choudri said. "We are open, we're absolutely open," he said. "We're not locking ourselves into one or two or three ways to do this program."

That includes starting work on the "bookends" of the project in Los Angeles and San Francisco in parallel with the Central Valley route, he said.

"Merced-Bakersfield is what we're building now, but that doesn't mean we can't do other things concurrently," he said. "If somebody comes up and says, 'Hey, I can build something in LA' ? Look, we are open for that business," he said.

That would require a legislative change loosening a restriction that the 171-mile, double-track segment in the Central Valley be fully funded before significant money goes elsewhere.

State Sen. Henry Stern, D-Los Angeles, in March introduced Senate Bill 1411 that would overturn a 2022 law that bars spending more than $500 million on most work until the initial Central Valley route is completed or 2030, whichever is earlier.

Choudri said the ability to commercialize the project beyond just ticket revenue will be key to paying taxpayers back.

High-speed trains in other countries are profitable not because of farebox revenue but because of other revenue-generating measures, he said. He compared the project to airports, which derive significant money from concessions and vendors.

Commercializing the project "is the most important strategy of our new approach and business plan," he said.

The fareboxes in other countries generate 35% to 42% of revenue "but somehow they're making hundreds of millions in profit," he said. "The reason is ? commercialize your assets."

The 2026 business plan proposes setting up "Enhanced Infrastructure Financing Districts" that would allow the CHSRA to capture a piece of future local taxes generated around stations.

The proposal immediately sparked controversy, and a group of local officials said this week they would likely sue if it becomes reality.

The updated plan included a re-estimated $231.1 billion price tag for a buildout based on the original design for the 500-mile route. That price would drop to $126.2 billion based on several cost-saving measures, including changing to a single-track system from a double-track system in the Central Valley.

Choudri, who took over in August 2024, lamented the political challenges facing the project, which is a favorite target of Republicans in the state and Washington, D.C. The Trump administration last July rescinded $4 billion of federal grant agreements, saying the authority could not meet binding obligations it made to receive federal funding.

The project "for right or wrong reasons, has been subjected to every possible politics that you can use in the country. It is very unfortunate," he said. "What is this obsession with this one project in the country that is actually building something?

"My next challenge is to solve this mystery around high-speed rail [that] if built in California is bad but if built in Texas is good, and if in the desert in Vegas it's slightly better," he said. "Let's just build it and get it done."