770 L Street, Suite 620, Sacramento, CA 95814 • T: (916) 324-1541 • F: (916) 322-0827 For further information, visit the California High-Speed Rail Authority web site at http://www.hsr.ca.gov/ California High-Speed Rail
BRIEFING: March 4, 2026, Agenda Item #5
TO: Board Chair Richards and Board Members
FROM: Mark Tollefson, Chief of Staff
DATE: March 4, 2026
RE: Draft 2026 Business Plan Release
Summary
As required by Public Utilities Code Section 185033, the California High-Speed Rail Authority (Authority) is required to prepare, publish, adopt, and submit an updated Business Plan to the Legislature on May 1 of every even year. Statute dictates that at least 60 days prior to submittal to the Legislature, the Draft Business Plan be released for public review and comment. The Draft 2026 Business Plan was posted on the Authority’s website on February 28, 2026 thus opening the 60-day public comment period. Staff intends to present the plan and receive public comments at this March 4, 2026 Board meeting and through other public comment opportunities. After receipt of public comment, staff will present a proposed final 2026 Business Plan, with any recommended changes, to the Board for consideration and approval at the April 29, 2026, Board of Directors meeting.
Background
The Authority has produced business plans since 2012. All business plans provide a snapshot in time of the most current information about the high-speed rail program at the time of adoption. In requiring an updated plan every two years, the Legislature envisioned that these plans would reflect updated forecasts and estimates, decisions that have been made and changes that have occurred since the prior business plan. This has been the case with the Authority’s previous plans and remains so with the Draft 2026 Business Plan.
Discussion
The Draft 2026 Business Plan is available for review at the following URL:
https://hsr.ca.gov/communications-outreach/reports/business-plans/2026-business-plan/ The Authority is providing the following options for submitting comments:
• By the online comment form available at the following URL:
https://hsr.ca.gov/communications-outreach/reports/business-plans/2026-business-plan/2026-draft- business-plan-comment-form/
• B
y email at: [email protected]
• By U.S. mail to the Authority:
C
alifornia High-Speed Rail Authority Attn: Draft 2024 Business Plan ATTACHMENT 1
770 L Street, Suite 1180
Sacramento, CA 95814
Legal Approval
This is an informational item, Legal has reviewed and signed off on this item.
Budget and Fiscal Impact
This is an informational item on the Authority’s 2026 Business Plan and by itself does not have a budget or fiscal impact.
Recommendations
This is an informational item.
2026 Draft Business Plan
March 4, 2026
Chief of Staff Mark Tollefson
1 An Economic Corridor of Opportunity
• The benefits of high-speed rail extend
beyond mobility; it is a catalyst for economic
growth, environmental sustainability, and
social equity to help meet the needs of a
growing population.
• California is the world’s fourth-largest
economy, with a GDP of approximately $4.1
trillion. High-speed rail’s Phase 1 route, from
San Francisco to Greater Los Angeles, is
among the world's most productive
economic corridors.
• This corridor can convert travel-time savings
into labor-market expansion, expanded
housing opportunity, and new investment,
making it one of the strongest high-speed
rail markets anywhere.
2 2026 Business Plan Delivery Strategy
• Complete the Merced-Bakersfield initial operating segment and initiate service as early as possible
• Expand to major population centers to achieve revenue-positive operation and strengthen the foundation for future delivery
• Advance an early asset commercialization and ancillary revenue strategy – including power, broadband/technology, station-area opportunities, and other partnerships – to improve long-term financial performance and support system growth
3 4
Making the Vision a Reality: Merced to Bakersfield
DELIVERING EFFICIENCY & SAFETY FOR CALIFORNIA
The Authority is expediting work in the Central Valley by right-sizing the project for initial service.
SAVINGS
The Authority saved an
additional $2 billion in
the Merced-Bakersfield
segment through scope
changes related to
infrastructure delivery,
lowering the total cost to
$34.8 billion.
FARE SERVICE
With tracks & electric
system installation in
beginning 2026, the
Authority anticipates
fare service from
Merced to Bakersfield
beginning in 2033.
TRIPS PER DAY
Initial service will begin
with a planned 8 trips
per day in both
directions.
TRACKS
The Authority is
scheduled to begin
laying tracks in 2026 .
SAFETY
The project is already
having a positive impact
on road safety, with
dozens of new
overcrossings opening
throughout the area.
5 Streamlining & Cost Savings
OPTIMIZING SAVINGS AND FUTURE EXPANSION
New strategies and routes have helped decrease expected costs.
ACTION NEEDED
Achieving projected savings is
contingent on additional
authority and advancing related
policy and implementation
measures. Absent those steps,
costs could increase by
approximately 10 percent.
STRATEGY
The Authority has
prioritized lower capital costs
through streamlined station
designs, infrastructure, and
service levels while setting the
stage for future expansion.
ROUTES
A revised route from Palmdale
to the LA Basin would expedite
the introduction of service while
also helping to lower costs.
BILLIONS SAVED
Our optimized approach has
resulted in more than
$105 billion in program-wide
savings.
Reaching Population Centers Drives Opportunity for Revenue Growth and System Expansion
Buildout Scenario Total
Cost*
Net
Cost**
Annual Funding Commitment***
40-year Net
Operating
Profit^
2042
(15 years)
2047
(20 years)
2057
(30 years)
2072
(45 years)
San Francisco –Bakersfield $60.34 $25.57 $1.78 $1.46 $1.20 $1.04 +42.23 San Francisco – Palmdale $96.73 $61.97 $4.36 $3.59 $2.96 $2.56 +77.68 San Francisco –
Los Angeles/ Anaheim
(Phase 1)
$126.20 $91.43 $6.40 $5.25 $4.33 $3.75 +174.34
6 Table 3.1: Buildout Cost, Funding, and Profit Scenarios ($ in billions) *Construction cost estimates include a P65 level of contingency. ** Funding needed during construction period. Net cost is derived by excluding the cost of $34.8 billion for Merced – Bakersfield which is alternatively funded (using Cap-and- Invest).
*** Annual Funding Commitment is assumed to commence in 2028, includes debt service, and is dependent on the source(s) of revenue pledge offered, as well as prevailing market conditions.
^ Cumulative operating profit is based on a service start year of 2040, if built using financing against long term state funding.
Expanding High-Speed Rail Through Efficient Delivery
• As introduced in the 2025 Supplemental Project Update Report, the Authority’s strategy is to right-size each stage of delivery to initiate service sooner and effectively control costs, and then expand infrastructure as demand grows.
• The strategy combines shared corridor upgrades with designs that preserve opportunity for future expansion.
• Practical modifications will keep initial costs lower while maintaining the system’s fundamental purpose: reliable, high-speed service linking San Francisco and Los Angeles via the Central Valley.
7 8
Building & Leveraging Partnerships
LEVERAGING ASSETS
Commercialization strategies to
monetize the Authority’s assets
could include station real estate,
retail concessions, advertising, &
energy and technology projects.
Some of these initiatives can
generate ancillary revenues and
improve financial sustainability,
even before train service begins.
PARTNERSHIPS
Focused on the delivery and
operation of the rail system, a P3
partner could drive efficiency &
may share risk and contribute
financing for major infrastructure,
maintenance facilities, &
potentially train operations.
This approach accelerates delivery
& could reduce public
capital requirements.
FUNDING
The extension of Cap-and-Invest
provides $1 billion in annual
funding for high-speed rail through
2045, sufficient to fully fund and
deliver the Merced-Bakersfield
segment. Additional funding will be
required to ensure long-term
viability and complete Phase 1.
LOW-COST FINANCING
The Authority is exploring access
to low-cost financing to accelerate
delivery of M-B and reach dense
population centers as soon as
possible to achieve a profitable
train service.
Commenting on the Draft Business Plan
• The Draft 2026 Business Plan is available for review at the following URL:
• https://hsr.ca.gov/communications-outreach/reports/business-plans/2026-business- plan/
• The Authority is providing the following options for submitting comments:
• By the online comment form available at the following URL:
• https://hsr.ca.gov/communications-outreach/reports/business-plans/2026-business- plan/2026-draft-business-plan-comment-form/
• By email at: [email protected]
• By U.S. mail to the Authority:
» California High-Speed Rail Authority Attn: Draft 2024 Business Plan » 770 L Street, Suite 1180
» Sacramento, CA 95814
9 11
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