U.S. Transportation Secretary Sean P. Duffy today announced the Federal Railroad Administration terminated approximately $4 billion in unspent federal funding for California’s High Speed Rail Boondoggle. After 16 years and roughly $15 billion spent, not one high speed track has been laid by the California High-Speed Rail Authority (CHSRA). The $135 billion projected total cost of the project could buy every San Francisco and LA resident nearly 200 roundtrip flights between the cities.
“This is California’s fault. Governor Newsom and the complicit Democrats have enabled this waste for years. Federal dollars are not a blank check – they come with a promise to deliver results. After over a decade of failures, CHSRA’s mismanagement and incompetence has proven it cannot build its train to nowhere on time or on budget,” said U.S. Transportation Secretary Sean P. Duffy. “It’s time for this boondoggle to die. President Trump and I will always fight to ensure your tax dollars only go to projects that accomplish great, big, beautiful things.”
The decision follows FRA’s exhaustive compliance review , after which the California High-Speed Rail Authority (CHSRA) was given two opportunities to respond consistent with the grant agreements. Neither response addressed FRA’s significant concerns. CHSRA simply cannot meet its obligations under the grant agreement.
Read the full termination HERE .
In addition to canceling $4 billion in unspent federal funds to CHSRA, Secretary Duffy has directed FRA to review other obligated and unobligated grants related to the CHSRA project. The Department of Transportation will also consult with the Department of Justice on the finding of FRA’s Compliance Review, including potentially clawing back funding related to California’s train to nowhere and other potential issues under Federal law.
Additional Information:
CHSRA’s own Inspector General issued a report in February noting serious issues with the project, including that CHSRA would not complete the Merced to Bakersfield line by 2033.
Following this report, FRA conducted an exhaustive Compliance Review, which resulted in a comprehensive report over 300 pages long, containing 9 key findings, and ultimately concluding that CHSRA could not meet its binding obligations under the agreements it made to receive Federal funding.
The findings included:
- CHSRA has executed numerous change orders and will likely have many more change orders in the near future to account for contractor expenses as a result of project delays.
- CHSRA has already missed its deadline for finalizing its rolling stock procurement.
- CHSRA has at least a $7 billion funding gap to complete the EOS, with no credible plan to secure additional funds.
- CHSRA does not have a viable path to complete the EOS by 2033 per its commitment in the FY10 Agreement and the FSP Agreement.
- CHSRA relies on volatile non-federal funding sources, which present significant project risk.
- CHSRA lacks time and money to electrify the EOS by 2033.
- CHSRA’s budget contingency is inadequate to cover anticipated contractor delay claims.
- CHSRA has overrepresented its ridership projections for the EOS substantially.
- CHSRA lacks the capacity to deliver the EOS by 2033.
Following the Compliance Review, FRA sent CHSRA a formal Notice of Proposed Determination to Terminate on June 4th. Pursuant to the Notice, CHSRA provided an initial response on June 11th and a final response on July 7th. Neither response satisfactorily addressed FRA’s significant concerns, as described in the Compliance Review, and FRA has therefore decided to terminate the agreements.
By terminating these grant agreements, FRA is saving taxpayers nearly $4 billion dollars. FRA will start exploring how these funds can be made available to viable and meritorious passenger rail projects.