Dive Brief:
- California High-Speed Rail Authority CEO Ian Choudri resigned Oct. 28 due to “personal and family priorities,” he said in a letter to the authority, the Los Angeles Times reported. He had been in charge since August 2024.
- The resignation follows a Sept. 15 report from the Office of the Inspector General for the High-Speed Rail Authority that identified over $2 million paid to consultants for travel-related costs that did not comply with state regulations and contract requirements, including more than $595,000 in unallowable expenses.
- The authority board in October canceled the CEO’s authority to authorize and oversee contracts under $25 million and required the agency’s in-house attorneys to approve or change any new or existing contracts, according to CalMatters. Contracts over that amount already required the board’s vote.
Dive Insight:
Uncertainties surround the state’s high-speed rail project. Last year, the Trump administration canceled about $4 billion in unspent federal grants previously awarded.
The authority’s only guaranteed funding source, above what is already on hand, is California’s commitment to provide $1 billion annually toward the project from the state’s cap-and-invest program through 2045. If the state permits the authority to issue bonds against the projected income, it would make the funds available sooner but with interest costs. The authority’s 2026 business plan estimates interest costs for borrowing against future cap-and-invest funds at $3.6 billion, but the OIG says costs could run as high as $6.6 billion.
The authority on Friday awarded Siemens Mobility a $772 million contract for three high-speed train sets, spare parts, 10 years of maintenance and a provision for cost escalation, foreign exchange rates, taxes and other items, even as a July 31 report from the authority’s OIG warned the authority it could run out of money by December 2027.
A new governor will take command next year. Xavier Becerra, a Democrat, leads the polls with 61% of likely voters and Republican Steve Hilton with 34%, according to the Los Angeles Times. Becerra supports the project but told KCRA, “High-speed rail has got to look really different if we’re going to continue this project," adding that it needs to regain the public’s confidence.
Choudri was working to bring private investors to the project. The authority in June entered a co-development agreement with a consortium of high-speed rail, infrastructure and investment firms in hopes of attracting outside investors. The $25 million agreement comes with an initial term of 30 months.
The authority board named Joe Stephenshaw, director of the California department of finance, as interim chief executive officer on Oct. 29.
