Another California High Speed Rail Disaster: Brightline West Makes Federal Loan Bailout Request

California’s perpetually incomplete high-speed rail project has no operational trains and no high-speed track laid on the actual alignment, as of August 2026. Gov. Gavin Newsom has blown $18 billion on the High Speed Rail and the project is about to run out of money, the Globe reported in “Gavin’s High Speed Rail Disaster in August.” So the governor replaced the prior variable 25% share of Cap-and-Trade auction proceeds, which were set to expire in 2030, with a set $1 billion per year for high-speed rail starting in FY 2026-27 in the 2026-27 California budget, after the loss of roughly $4 billion in federal grants in 2025.

California’s High-Speed Rail boondoggle, voter approved in 2008 for a San Francisco to Los Angeles line, has been whittled down to a Merced-to-Bakersfield line, is now estimated to cost taxpayers more than $231 billion, up from its original $33.5 billion price tag when voters passed Proposition 1A.

It is 2026, eighteen years later, and still there are NO trains running and the project is bankrupt.

But wait – there’s more!

There is another failing California high-speed rail project, this one is to connect the suburb community of Rancho Cucamonga, CA to Las Vegas, NV, known as Brightline West.

Brightline West has been working under a series of financing deadlines tied to its existing bonds. Bondholders agreed in early August 2026 to push the Equity Contribution Condition Deadline from August 1 to September 10, 2026. That extension gave the company extra time to raise at least $400 million in additional equity (part of an earlier commitment) and to continue lining up the rest of its capital.

In 2025, the Globe reported that the Brightline West Rail Project unveiled higher than anticipated estimate ticket prices. But that was just the tip of the spear. Tickets were increasing to $119 for standard class and $133 for premium class one-way tickets. Before taxes, a bare bones, no parking included, round-trip ticket was going to cost a minimum of $238.

When you can fly from Ontario to Las Vegas for $66, why take an expensive train?

In October 2025, the U.S. Department of Transportation revealed that Brightline West submitted an unprecedented $6 billion federal taxpayer loan request to salvage the financially distressed project.

As with California’s High Speed boondoggle, Brightline construction costs have nearly tripled from original estimates, and the parent Brightline company’s inability to pay interest as recently as November 2025 on $1.2 billion in Brightline Florida bonds led S&P Global Ratings & Fitch Ratings to downgrade much of Brightline’s debt to ‘junk’ status, Bondbuyer reported.

An April 30 Ernst & Young audit revealed that Brightline is $5.5 billion in debt, “does not currently have the liquid funds necessary to service its debt and meet such other obligations as they become due,” and may be bankrupt by mid-June. The auditors also flagged “substantial doubt” about its ability to continue as a going concern, Bondbuyer reported.

The audacious scale of this federal bailout request is unprecedented, as the largest-ever Railroad Rehabilitation & Improvement Financing (RIFF) loans ever previously approved were only for existing rail systems requiring rehabilitation and improvement, John Sitilides told the Globe. Sitilides is federal affairs advisor to ReRoute the Route, ReRoute the Route, a Texas business and civic coalition opposed to federal subsidies for the proposed Dallas to Houston high-speed rail project. Those were for three aggregate RRIF loans made in July 2024 totaling $4.06 billion to rehabilitate and expand the Hudson Tunnel Project between New York and New Jersey, and the $2.45 billion loan approved in 2016 to Amtrak to improve the Northeast Corridor and purchase 28 new Acela trainsets.

No other Railroad Rehabilitation & Improvement Financing loan has ever exceeded $1 billion, yet Brightline is requesting a $6 billion loan for a project not yet under construction and years away from a hoped-for completion. Brightline launched the project in 2020 as an $8 billion “private venture” with a projected completion within four years. At the time of launch, Brightline struggled to secure investors willing to purchase an initial $3.2 billion in bonds, due to institutional skepticism that the projected construction costs were unrealistically low and could not be covered by overly ambitious projected revenues.

“The Biden Administration sought to salvage the project in two tranches. In January 2024, the Department of Transportation approved $2.5 billion of private activity bonds for the project, and in September 2024, Transportation Secretary Pete Buttigieg approved a $3 billion grant request,” Sitilides said. “The project’s original $8 billion costs have escalated dramatically to $21.5 billion, nearly tripling in just five years, due to rising construction expenses, labor shortages, and materials inflation. These challenges have strained funding sources, delayed timelines, and raised doubts about the project’s long-term viability and revenue projections.”

Its other project, Brightline Florida, has failed to meet revenue projections, has never turned a profit, and used financial reserves to cover interest payments. That’s why credit agencies downgraded Brightline’s debt to CCC- “deep junk” status and now warn of the company’s possible 2027 default.

Brightline Florida’s 2025 revenue was about $214 million—roughly one-third of the figures used in recent bond documents—and ridership of 3.1 million passengers was well below earlier projections. The company has posted large net losses every year of operation, including $549 million in 2024 and $233 million in 2025; it has never recorded an operating profit after depreciation and interest, according to the Palm Beach Post. 

Adding to the issues, in mid-August, Bloomberg reported that Brightline West President Sarah Watterson stepped down as President of the financially distressed project:

Brightline West Loses President for Cash-Strapped Rail Project

“A key executive at Brightline West has stepped down as the overbudget project to build a private high-speed passenger railroad from Southern California to Las Vegas struggles to fill in funding gaps. Sarah Watterson is no longer president and instead serving as a special adviser to the company. The change was disclosed by mortgage lender Rocket Cos. Inc., where Watterson is joining as an independent board member, according to a statement Monday. Watterson, who’s been at Brightline for seven years, will assist with the transition, according to a Brightline spokesperson. Mike Reininger remains as managing director, responsible for delivering the project.”

If federal funds have been cut from the State of California’s high speed rail, why should U.S. federal taxpayers be on the hook for an unprecedented $6 billion federal loan bailout to salvage the failing Brightline West high-speed rail project?

Railway Supply explains more on the financially distressed Brightline West high-speed rail project:

…the company Brightline West seems to be angling for some U.S. Department of Transportation hint or indication by September 10 of hopeful eventual approval of the $6 billion federal Railroad Rehabilitation & Improvement Financing (RRIF) loan request for its Rancho Cucamonga to Las Vegas project.

The underlying obligation dates to November 2025, when Brightline West committed under a Transaction Support Agreement to raise at least $400 million in capital by 31 March 2026. Of that amount, $250 million was earmarked to redeem part of the Series 2025B Bonds. The agreement records a commitment by the company; it is not confirmation that the capital has been received.

“This is not a private project, but instead a hybrid one whose costs are increasingly socialized, even as Brightline hopes to completely capture all profits if the project is ever completed,” John Sitilides said in a letter to the U.S. Department of Transportation. “Brightline’s open pivot from private bank debt to federal taxpayer bailouts suggests that the private investor markets assess the project’s volatility as too risk-laden to assure eventual viability.”

The original Brightline West “private venture” promise has effectively collapsed. The Railroad Rehabilitation & Improvement Financing request makes clear that the project, if built, can only move forward with monies largely from taxpayers and tax-exempt bonds.

The private venture market has effectively declined to fully fund this project, and now taxpayers are being asked to fill the gap the market would not.