Trump is clawing back $4 billion, but new CEO Ian Choudri has a host of ideas \u2014 including leasing land for data centers \u2014 to bring in more revenue to pay for the costly project.<\/p>\n
With the clawing back of $4 billion<\/a> in federal grants to support it, the Trump Administration seems hell bent on ensuring that California\u2019s high-speed rail project ends up as precisely the \u201ctrain to nowhere\u201d the President has lambasted it as. Gov. Gavin Newsom is suing to keep the money, but the train\u2019s new CEO has big ideas for saving the priciest U.S. infrastructure project. They include new long-term funding, private partnerships and even turning to one of California\u2019s newest \u201cnatural\u201d resources: The AI data center.<\/p>\n Ian Choudri, who spent decades working on global mega-infrastructure projects for major engineering firms Bechtel, Alstom and Parsons before taking the high-speed rail job last September, is on a mission to convince skeptics that after years of slow progress, the Golden State\u2019s bullet train from San Francisco to Los Angeles can be built\u2013 perhaps for less than its $128 billion price tag and even without federal support.<\/p>\n \u201cWe\u2019re getting contacted by Silicon Valley investors now asking, \u2018Hey, can we move data centers into Fresno and plug into your power grid that\u2019s renewable?\u2019\u201d\n<\/p>\n Ian Choudri<\/p>\n \u201cWe\u2019ll show that it becomes less cumbersome on taxpayers because it\u2019s generating revenue,\u201d he told Forbes, without providing financial details. In addition to future ride revenue, he thinks the system can make money by letting tech firms build data centers on its land, powering them with solar farms that will also propel its trains<\/a>. Other ideas include selling the rights to telecom companies to lay fiber optic cable along the train\u2019s path, and promoting real-estate development projects on its route, particularly in the lower-priced Central Valley region.<\/p>\n \u201cWe\u2019re getting contacted by Silicon Valley investors now asking, \u2018Hey, can we move data centers into Fresno and plug into your power grid that\u2019s renewable?\u2019\u201d Choudri said. \u201cIf I combine all those ancillary revenue sources, roughly it\u2019s going to be 30% to 40% of the farebox revenue.\u201d<\/p>\n He\u2019s submitting a revised plan this week that maps out steps to complete an initial 119-mile segment through California\u2019s Central Valley by 2033, and then expand service north to San Francisco and San Jose and south to Palmdale in Southern California as soon as 2039, with Los Angeles to follow later. His focus is on sequencing construction phases to maximize revenue as quickly as possible, making the project less dependent on government money.<\/p>\n Gov. Gavin Newsom speaks at the opening of a railhead facility in January, joined by CEO Ian Choudri, right.<\/p>\n California High-Speed Rail Authority<\/p>\n \u201cBuild the initial sections where you can. Start using the service. Have the highest impact on the economic transformation of the towns and cities that are getting connected, and then add more value by monetizing all the assets you have along the corridor,\u201d said Choudri, sitting in a conference room overlooking the copper-topped California Capitol building in Sacramento. \u201cThat\u2019s so critical in our new approach because it offsets a lot of this demand for continuous funding\u2013whether federal, state or a combination of both\u2013because your system goes live and becomes a corridor of opportunities for everybody.\u201d<\/p>\n \u201cPeople are looking for new approaches, creative approaches, to deliver the project more efficiently and more quickly.\u201d\n<\/p>\n State Senator Scott Wiener<\/p>\n The plan is a massive change from the project\u2019s past. But it hinges on critical legislation: a long-term funding plan proposed in May by Newsom would provide an additional $20 billion, or $1 billion a year through 2045, along with a bill to speed up permitting for High-Speed Rail Authority construction work and relocate portions of roads and utilities that are in the way.<\/p>\n State Senator Scott Wiener of San Francisco, who authored the permitting bill, isn\u2019t certain the funding plan will be authorized in the current session that ends on Sept. 12. But he thinks support for the project is improving.<\/p>\n \u201cPeople want to see a solid plan to deliver the project in a timely manner,\u201d he said. \u201cAnd people are looking for new approaches, creative approaches, to deliver the project more efficiently and more quickly.\u201d<\/p>\n No Land, Fuzzy Plan<\/p>\n Trump in May accused the long-maligned train of being \u201c30,40 times<\/a>\u201d over budget, calling it \u201cthe worst cost overrun I\u2019ve ever seen. It\u2019s totally out of control.\u201d<\/p>\n The price tag for a bullet train operating at speeds over 200 miles per hour between San Francisco and Los Angeles has ballooned, though not nearly by the amount Trump falsely claims. It\u2019s tripled from an estimated $45 billion<\/a> in 2008, when state voters approved a $10 billion bond measure for it (up from an initial $33 billion<\/a> estimate), to as much as $128 billion<\/a> as of the 2024 business plan.<\/p>\n Approval of the train by voters 17 years ago was a leap of faith, because none of its backers, including then-Gov. Arnold Schwarzenegger, knew exactly how big a challenge it would be. In 2008, there was no fixed route, land or right of way and plans had to go through California\u2019s grueling environmental impact review process. The project has also had limited eminent domain authority when it came to things like getting utilities to move power lines and pipes. Negotiating terms to acquire thousands of parcels of land was an expensive, excruciating slog with repeated court challenges.<\/p>\n In its early years, the project also relied heavily on outside consultants, instead of staffing up with megaproject experts\u2013like Choudri. He\u2019s also built up his team with rail and infrastructure veterans, including Construction Chief Edward Fenn, who helped build Brightline\u2019s Florida system, and Soon-Sik Lee, chief of planning and engineering, who previously worked on the UAE\u2019s Etihad high-speed rail line and Caltrain.<\/p>\n A high-speed rail bridge under construction in California’s Central Valley.<\/p>\n California High-Speed Rail Authority<\/p>\n Despite its messy start, the project has made far more progress than Trump and Transportation Secretary Sean Duffy acknowledge. Some 2,300 parcels of land have been secured, environmental approvals are largely complete and active construction is underway, employing more than 15,000 people, on the 119-mile section between Fresno and Bakersfield, with preparations extended to Merced, Gilroy and Palmdale to tie into existing rail systems.<\/p>\n \u201cHigh-speed rail will be a game-changer for Fresno and the Central Valley\u201d\n<\/p>\n Fresno Mayor Jerry Dyer<\/p>\n After rocky years, \u201cwe’re now on the other side and we want to get this done,\u201d Newsom said after his budget, including about $800 million this year for high-speed rail, was signed into law in May.<\/p>\n \u2018Game-Changer\u2019<\/p>\n When fully built out, perhaps sometime in the 2040s, the railway is to be a 494-mile system, running from San Francisco in the north to Los Angeles and Anaheim in Southern California. The first step is completing the initial 119-mile section connecting the Central Valley cities of Fresno to Bakersfield. From there, the plan is to extend north from Fresno to Merced, connecting to Amtrak\u2019s service to Sacramento, and northwest to Gilroy and the Caltrain commuter system that feeds into San Jose and San Francisco.<\/p>\n From Bakersfield, Choudri wants to build south to Palmdale, a high desert city served by the Metrolink commuter rail line that runs to Los Angeles and Orange County. Billionaire Wes Edens\u2019 Brightline West bullet train from Las Vegas to suburban Los Angeles may also link to Palmdale via a proposed segment funded mainly by Los Angeles County\u2019s Metro transit agency. Those extensions could be in place by 2039, Choudri estimates, giving the system significant utility as construction of high-speed tracks progresses further south.<\/p>\n \u201cHigh-speed rail will be a game-changer for Fresno and the Central Valley\u201d\n<\/p>\n Fresno Mayor Jerry Dyer<\/p>\n Critics have said it would have been cheaper and faster to build the system along Interstate 5, the main freeway linking San Francisco to L.A. (Brightline West is doing that with its 218-mile line from Las Vegas to suburban Los Angeles<\/a> along Interstate 15, which could be running by 2028.) But the idea was scrapped long ago for a simple reason: It would exclude the state\u2019s interior cities.<\/p>\n A newly completed grade separation for California’s high-speed rail project in Fresno, California.<\/p>\n California High-Speed Rail Authority<\/p>\n \u201cHigh-speed rail will be a game-changer for Fresno and the Central Valley,\u201d Fresno Mayor Jerry Dyer told Forbes. \u201cWe\u2019re an ag-centric region, heavily reliant upon agriculture and commercial jobs that are associated with it. When Interstate 5 was built many, many years ago, it was built intentionally from Northern California to Southern California, and left the Central Valley out of the broader California economy.\u201d<\/p>\n He\u2019s convinced that links from his city, where median home prices are a third or less than in San Francisco or Los Angeles, to the state\u2019s main economic centers will bring profound changes. \u201cIt will allow people who work in Silicon Valley to be able to commute and live in Fresno. That’s exciting for us in Fresno because it would change our local economy,\u201d Dyer said.<\/p>\n Commute times between San Jose and Fresno could be as little as 45 minutes one day, according to Choudri.<\/p>\n \u201cA colossal boondoggle\u201d\n<\/p>\n Transportation Secretary Sean Duffy<\/p>\n In an op-ed last month, as the administration works to claw back funds, Duffy slammed the project as a \u201ccolossal boondoggle.\u201d But Newsom pushed back, arguing for the value the project will bring to heavily red districts in the middle of the state. \u201cSecretary Duffy continues to call this a \u2018train to nowhere.\u2019 It\u2019s another slap in the face for the Central Valley,\u201d he said in an email. \u201cUnlike the Trump Administration, we\u2019re not going to abandon the Central Valley.\u201d<\/p>\n Private Partnerships<\/p>\n Losing $4 billion of federal funds would be a major setback, representing 14% of the $28 billion the project has raised, with the rest coming through state funding and a previous $3 billion federal grant. That\u2019s why Newsom hopes to finally stabilize the project with his $20 billion plan funded by California\u2019s Cap-and-Trade program, in which polluters pay for their carbon emissions. If approved, that would allow Choudri to make good on his vision and also create opportunities to bring in private infrastructure partners to assist with financing and construction, including companies like Bechtel, Meridiam and Plenary<\/a>.<\/p>\n \u201cUp to now, private investors, private equity, private operators really weren’t interested in taking a look at or investing equity or participating in any kind of a risk transfer in the California project because they weren’t sure of the commitment\u2013the financial commitment to long-term funding on behalf of the state,\u201d said Sia Kusha, head of business development for Plenary, which is working on transit and bridge projects across the U.S. and Canada.<\/p>\n The likelihood that the state will approve a 20-year financing plan is \u201cprobably the biggest impetus behind why there\u2019s new excitement in the private development community\u201d about the rail project, he said.<\/p>\n A guaranteed funding stream would allow Choudri to borrow against future revenue to accelerate the pace of construction. Already, the High-Speed Rail Authority, which has been building the embankments, bridges, tunnels and grade separations needed for the train over the last decade, like an overpass just completed in Fresno<\/a>, has begun ordering steel and other materials needed to finally begin laying tracks.<\/p>\n Choudri acknowledges past problems, which frustrated him as an outsider. \u201cIt was micromanaged in the law \u2013 which said, \u2018it should be this many minutes from here to this station\u2019 \u2013 back in 2008, when we didn’t even know where the alignment was going to go,\u201d he said. The initial cost and service estimates weren\u2019t useful because there was no detailed plan.<\/p>\n \u201cYou can\u2019t put 10 carts in front of the horse, and then say, \u2018Why isn\u2019t it moving?\u2019 It wasn\u2019t moving because it wasn\u2019t set up the way other countries do this.\u201d<\/p>\n Rendering of a high-speed rail train entering Fresno’s station.<\/p>\n Craig Kohlruss\/The Fresno Bee\/Tribune News Service via Getty Images<\/p>\n The approach seen in projects including Japan\u2019s shinkansen bullet train, to high-speed rail networks in China, Europe and dozens of other countries, focused on segment-by-segment plans to connect cities\u2013and with full national government support. He thinks it was a mistake to estimate the cost of California\u2019s entire system long before thorough planning was done and routing was determined.<\/p>\n \u201cThat’s why I left the private sector,\u201d Choudri said. \u201cI\u2019d been watching this program since 2012, and my mind was just going crazy.\u201d That motivated him to take the job last year, thinking, \u201cI need to go in and just say, \u2018Alright, let’s go fix this thing because we cannot fail.\u2019\u201d<\/p>\n More from ForbesForbesCalifornia Sues Trump To Hang Onto $4 Billion Of Bullet Train FundsBy Alan Ohnsman<\/a>ForbesTrump Could Derail California High-Speed Rail Project, Despite Billions SpentBy Alan Ohnsman<\/a>ForbesCalifornia\u2019s $100 Billion Electric Bullet Train Will Be Fully Solar PoweredBy Alan Ohnsman<\/a>ForbesIn Las Vegas, A Billionaire\u2019s Blueprint For Building Bullet TrainsBy Alan Ohnsman<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Trump is clawing back $4 billion, but new CEO Ian Choudri has a host of ideas \u2014 including…\n","protected":false},"author":2,"featured_media":79434,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,55902,55901,50345,2013,55903,7264,20444,74,3479],"class_list":["post-79433","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-bullet-train","tag-california-high-speed-rail","tag-fresno","tag-gavin-newsom","tag-ian-choudri","tag-infrastructure","tag-sean-duffy","tag-technology","tag-trump"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/79433","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=79433"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/79433\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/79434"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=79433"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=79433"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=79433"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}