California High-Speed Rail Inspector General Reviews 2026 Business Plan: Cost Estimates Not Comparable, Funding Could Run Out by December 2027
On July 31, 2026, the Office of the Inspector General for California high-speed rail submitted a review to the governor and legislative leaders finding serious transparency problems in the California High-Speed Rail Authority's 2026 Business Plan: the plan fails to clearly communicate the scope changes and cost increases behind its Merced-to-Bakersfield estimates, the Authority "has obscured basic facts about the project," and, the review warns, the Authority will exhaust its current funding as soon as December 2027 if it does not secure financing.
The inspector general's office said it had reviewed a draft of the business plan in April 2026 and found it missing many statutorily required elements, making the draft "objectively incomplete." The final plan improved in completeness, the review found, with one notable exception: it still did not provide funding plan information required by a recently enacted state law.
The review's central criticism is that the cost estimates cannot be compared. The Authority has produced three different estimates for the Merced-to-Bakersfield segment: $36.75 billion in the August 2025 Supplemental Project Update Report (171 miles, predominantly single track); $35.662 billion for the 2026 Business Plan's "reduced scope" segment (162 miles, with the Merced and Bakersfield stations relocated out of downtown); and $47.654 billion for the estimate the Authority says complies with state law SB 198 (171 miles, dual track, downtown stations). The plan, the review said, does not present the estimates in a directly comparable way as SB 198 requires, obscuring the fact that, absent scope reductions, costs have substantially increased.
The reduced-scope estimate also excludes significant costs, the review found: financing costs estimated at $3.6 billion to $6.6 billion, a default-level contingency difference of about $1.2 billion, $816 million in construction costs the Authority assumes other entities will pay, and about $1.7 billion tied to a local agreement the Authority assumes it will be able to modify. The draft business plan had also inadvertently omitted about $870 million from the segment estimate, an error corrected in the final plan.
On schedule, the plan disclosed a nine-month slip in the segment between August 2025 and March 2026 but offered no explanation of the "optimization and pending policy changes" it cited as the cause, the review said. Nor did the plan disclose that its risk-based statistical analysis had moved the schedule window from 2032-2033 to September 2034.
Inspector General Benjamin Belnap wrote that the Authority's recent annual reporting has been incomplete and late, and that the Authority "has obscured basic facts about the project, hindering lawmakers' ability to provide effective oversight." The office directed its recommendations to the Board, urging it to adopt and reinforce a policy governing the Authority's annual reports, with adequate timelines for preparing and reviewing complete reports before issuance.
The 2026 Business Plan puts the total cost of Phase 1, from San Francisco to Los Angeles and Anaheim, at about $126.1 billion. The Merced-to-Bakersfield segment is the first under construction, with 119 miles now being built in the Central Valley.
Source: Office of the Inspector General, High-Speed Rail, Review of the 2026 Business Plan (July 31, 2026).
Source: 加州高铁监察长办公室《2026年商业计划审查报告》
Published by GSM · USA (original Chinese edition)
Photo: 图：圣华金河高架桥航拍（加州高速铁路局图）。Aerial view of the San Joaquin River Viaduct. (California High-Speed Rail Authority)
