The bullet-train project, eventually linking San Francisco to Los Angeles, would cost $68.4 billion, down from the $98.5 billion estimated in November, according to the California High- Speed Rail Authority’s revised business plan released today. The proposal saves money by upgrading existing commuter and freight lines in some areas, rather than build new track, and counts on funds from California’s new program selling pollution credits.

California is the only U.S. state working to lay tracks for trains to run as fast as 220 miles (354 kilometers) an hour, after Congress cut off 2012 funds for such projects. In January, a state legislative review panel, questioning its long-term funding, recommended against selling debt to start the project.

“We have confidence in this plan, and in fact we are excited about this plan,” Dan Richard, the authority’s chairman, told reporters in Fresno. “This system will not only bring high-speed rail to California, but it will bring high- speed rail to America.”

Under the redrawn plan, California would route the main track down the backbone of the state from Merced, about 120 miles south of Sacramento, the capital, to the San Fernando Valley, north of Los Angeles. It would then connect to the population centers of Los Angeles and San Francisco by modifying existing commuter and freight lines to handle high-speed trains.

Double Estimate

Governor Jerry Brown has defended the project, which previously called for building the first phase in the state’s less-populous Central Valley and didn’t explain how the rest of it would be financed. Even trimming the bill by $30 billion, the price tag is still almost double what voters were told it would cost when they approved bonds for the project in 2008.

The new plan counts on money the state is expected to earn beginning later this year from its cap-and-trade air-pollution program. The funds would help jump-start construction until federal and local financing arrive.

California will auction tradeable allowances that permit industries such as power generators and oil refiners to release carbon into the atmosphere if they can’t meet requirements to lower their pollution to 1990 levels. Brown estimates the state will take in about $1 billion in the year beginning July 1. Under the law that created the program, the money is supposed to be used on programs that help to reduce greenhouse gases.

Government, Private Investment

State Auditor Elaine Howle criticized the high-speed rail plan in January as lacking specifics about how the state might come up with the money. California has received commitments for $3.5 billion in federal funds. State officials have said they plan to rely on a mix of government and private investment to complete the line, including as much as $9.95 billion in bonds.

Brown will ask lawmakers in the next few weeks to approve spending some of the bond money to start construction. State Treasurer Bill Lockyer would then sell the securities. The first section will use $2.7 billion of those bond funds, including $597 million in 2013, according to the business plan.

In January, the high-speed rail board’s chairman and chief executive officer both announced they were stepping down amid criticism of the plan.