Plenary‐led Team Wins California High‐Speed Rail Co‐Developer Procurement

In May, the California High-Speed Rail Authority (CHSRA) announced the selection of Momentum Alliance Partners (MAP) as the co-development partner for the beleaguered high-speed rail project. The announcement concludes a procurement that has been underway since late last year to bring on a co-development partner that could eventually invest in and help deliver the project. Once the co-development agreement is finalized, MAP and CHSRA will partner to develop a financeable project scope, likely a component of the full high-speed rail project, that MAP can take forward into development. The project’s $1 billion in semi-secured annual cap-and-invest funding may be a key component of the financing.

MAP is led by Plenary. Other development team members include CDPQ Infra, Keolis Rail Services America, SV California HSR, Jacobs, SENER Engineering and Systems, and the Steer Group.

The co-development partnership is a key step in CHSRA CEO Ian Choudri’s push to inject new life, and maybe eventually private capital, into the troubled megaproject. The big question is whether it is too little, too late. The Authority published its Request for Expressions of Interest seeking industry input last summer, just as the Trump Administration was completing its investigation of the project and withdrawing roughly $4 billion in federal grants that were awarded to the project by prior administrations.

California originally sued to restore those federal grants, but dropped the suit late last year. That leaves only state funding for the foreseeable future.

Part of MAP’s mandate during predevelopment will be to come up with one or more commercialization projects (called Asset Commercialization Opportunities) to support the project’s economics. However, a key objective of Choudri’s approach is to develop a project financing backed by the state’s cap-and-trade funding revenue stream for California High-Speed Rail.