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California’s High-Speed Rail Project Sees New Funding, Bidders

A Sacramento manufacturing plant could stand to benefit from the $3.1 billion federal grant awarded last month to revive an over-budget and overdue high-speed rail project between Merced and Bakersfield.

A Siemens worker assembles part of an Amtrak Airo train at the company's manufacturing facility in Sacramento on Wednesday, Oct. 11, 2023.
Cameron Clark/
(TNS) — A Sacramento manufacturing plant could stand to benefit from the $3.1 billion federal grant awarded last month to revive an over-budget and overdue high-speed rail project between Merced and Bakersfield.

Siemens Mobility, the German company whose North American train manufacturing hub is in Sacramento, is one of two bidders the California High-Speed Rail Authority selected to vie for $561 million they have allocated to pay for train cars.

The authority announced on Jan. 5 that it had determined that Siemens and French-manufacturer Alstom both had the technical expertise to bid on building the high-speed trains.

The winning bidder will build six high-speed trains capable of operating speeds of 220 miles per hour and a simulator where the trains’ operators can learn the systems. The contract will include a stipulation that the company will maintain the trains for 30 years.

Formal bids are expected to be solicited by the end of March with delivery of the first two trains by 2028.

High-Speed Rail Authority CEO Brian Kelly in a statement said the new federal funds are key to implementing rail service.

“With this recent federal grant, we are able to move forward with this major step on the project” he said.

Michael Cahill, a president at Siemens Mobility’s North American, said in another statement that after being shortlisted by the authority his company is now poised to submit a bid showing that it is the best manufacturer to build the trainsets.

“For more than 40 years, we’ve designed, built and delivered passenger rail vehicles, right here in Sacramento,” Cahill said in a statement. “We know that our trains, not only will meet the needs of passengers, with wide aisles, connectivity, and comfort, but also will help the state meet its sustainability goals with its compatibility to green energy sources.”

Officials at Alstom did not respond to requests for comment. The company would build the trains in upstate New York if it won the contract.

The authority hopes to introduce its first train service on the 171-mile stretch between Merced and Bakersfield between 2030 and 2033.

Ultimately, the train service is supposed to travel between San Francisco and Los Angeles in less than 3 hours but the cost of the project has ballooned from $33 billion when voters approved a bond issue in 2008 to as much as $128 billion today.

It’s unclear how the additional funding will be secured to build out the entire system which was supposed to be completed by 2020. No competition date has been set for the construction of the full San Francisco to Los Angeles route.

A second route between Sacramento and San Diego was also supposed to be built after the San Francisco to Los Angeles line was complete but only initial studies have been done.

For now, all eyes are on the first part of the system between Merced and Bakersfield.


The high-speed trains are supposed to reduce the current train time between Merced and Bakesfield to an hour, around half the current time on Amtrak’s San Joaquins train service.

But there are also funding challenges for the initial phase of the high-speed rail service leaving the possibility that purchased trains sit unused.

An updated estimate last March from the rail authority for the first phase of the high-speed train service between Merced and Bakersfield put the cost to begin service between a low of around $32 billion and a high of approximately $35 billion.

That exceeds the authorities’ secured funding for the project by at least $4 billion and up to $7 billion, even with the new federal grant. The amount of the shortfall depends on whether the cost of building the first part of the high-speed systems comes in at the lower or higher estimate.

In the past five years, the cost of building the starter phase of the high-speed program has risen by almost $10 billion. Governor Gavin Newsom’s plan five years ago for the first phase of the train service between Merced and Bakersfield put the cost at $22.8 billion.

Authority officials said inflation, cost overruns and design changes have increased the cost of the first segment.

Construction on 119 miles of right of way, including elevated viaducts, of the 171-mile high-speed train line between Merced and Bakersfield has been completed. However, the bidding process to hire companies to lay the train tracks wouldn’t occur until later this year.

The California High-Speed Authority has applied for $4.7 billion in additional federal funding from the Biden administration to help close its funding gap to build the line between Merced and Bakersfield on top of the $3.1 billion it is receiving.

But even if it gets the additional federal funds, the authority could have a $3-billion shortfall to begin operations on the first phase if costs come in at the high estimate of $35 billion, California high-speed rail officials said.

State legislative leaders have balked at providing new funding to the high-speed rail authority, leaving the federal funding spigot as a key funding source.

The authority does receive around $1 billion a year in funding from California’s cap-and-trade program in which companies buy offsets to compensate for greenhouse emissions higher than allowed by the state.

The program is scheduled to expire in 2030, but an extension could provide additional funds for the first phase of the service between Merced and Bakersfield, said Brian Annis, the authority’s chief finance officer.

The issue is that while the high-speed rail program will need continuous and sustained funding to start operations, more funding isn’t guaranteed, said Giovanni Circella, director of the 3 Revolutions Future Mobility Program at the UC Davis Institute of Transportation Studies.

While the Biden administration has been supportive of the high-speed project, the divided political environment in Washington D.C. leaves open the question of whether the rail authority will be able to receive the additional funding it needs to start service, he said.

Former President Donald Trump took away $1 billion in federal funds from the California high-speed rail project but the money was restored by the Biden administration.

Circella said the lack of guaranteed funding sources, and the fact that the U.S. doesn’t have a culture of people taking trains like in Europe, could hinder the California high-speed rail program.,

“It’s an open question of whether there will be enough money to start the service,” he said.

©2024 The Sacramento Bee, Distributed by Tribune Content Agency, LLC.