Finance executives from the Infrastructure Management Group and Lehman Brothers, today met with private investors and board members of the California High-Speed Rail Authority, outlined a funding strategy to build the high-speed train system.

"We already know that high-speed trains will be good for business, now we can say that the system is open for business. This is the first step in securing the private investment that the Governor and our financial planners believe will allow us to build this system," said High-Speed Rail Authority executive director Mehdi Morshed.

Officially dubbed a "Request for Expressions of Interest for Private Participation," the public session was convened to discuss the public-private partnerships (P3) approach that will be used to help fund the train system. More than 70 private contractors, equipment vendors, operators and financiers were in attendance to hear an outline of the funding strategy from the system's financial advisory team.

The finance team, including Infrastructure Management Group, Lehman Brothers, and Sperry Capital, was retained in January 2007 with the objective of developing a financing strategy and model for the full implementation of the high-speed train system. Led by Sasha Page, Vice-President for Finance, Infrastructure Management Group, Inc., the advisors concluded that a viable funding strategy for California's high-speed train requires both an up-front commitment of state funding and significant investment of political capital to obtain other needed funding.

According to Morshed: "State support will be critical to mitigate risks and attract needed funding as private sector partners will seek returns commensurate with perceived risks. Federal financial and regulatory support is also crucial to the project's success."

Based on initial discussions with private operators and investors, the financial advisors outlined their belief that public-private partnerships could serve as a source of financing for a portion of the high-speed train system and absorb various risks.