California’s much-maligned High-Speed Rail project was hit with a dose of reality on Wednesday, with $4 billion in funding hanging in the balance.
U.S. Transportation Secretary Sean Duffy released a compliance review of the project on Wednesday, finding that it has no viable path forward to completion.
The backstory: California voters approved High-Speed rail in 2008 for a projected total cost of $33 billion to connect San Francisco to Los Angeles by 2020.
- That pitch proved to be overly ambitious, with the High-Speed Rail Authority revealing that it won’t be able to even complete the Merced to Bakersfield line by 2031 at the earliest.
- The project’s total cost has also ballooned to around $130 billion, and in March, the California Legislative Analyst’s Office told state lawmakers that the project has a $7 billion funding gap that could grow even greater just to complete the Merced to Bakersfield line.
- High-Speed Rail has not even laid any track in the initial 171-mile stretch through the heart of the Central Valley.
- Duffy also launched an investigation into the project in February, putting $4 billion in federal funding at risk.
The big picture: Duffy’s report found that High-Speed Rail is in default of the terms of its federal grant awards, meaning around $4 billion in federal funding could be terminated after 37 days – the period that the California High-Speed Rail Authority has to respond.
- Along with the report, Duffy sent a letter to High-Speed Rail Authority CEO Ian Choudri detailing a trail of project delays, mismanagement, waste and skyrocketing costs.
- The 310-page report has nine key findings detailing the numerous change orders resulting in delays, missed deadlines and the $7 billion funding gap.
- It also found that the authority does not have a viable path to complete the Merced to Bakersfield line by 2033 and lacks the time and money to electrify the line by then.
- The report also found that the authority has substantially overrepresented its ridership projections, along with other findings.
Zoom in: The Federal Railroad Administration conducted a site visit on April 25 to the 32-mile stretch between Ave. 19 in Madera County to E. American Ave. in Fresno County. Officials found that the authority has spent over 75% of its contracted funds for this stretch and has completed 18 structures with 11 currently under construction.
- “The contractor has expended 75.2 percent of contract funds, suggesting there is still roughly a quarter of the contract work to complete in the next 19 months of a 13-year contract period of performance,” the report reads. “This is a compressed timeline given there are 15 structures and 21 miles of guideway to complete.”
- The report also called the delays and concessions that local interests are able to extract “absurd,” detailing a 400-foot section in Kern County in an otherwise continuous 22.5-mile strip of completed guideway that remains incomplete due to protracted negotiations with the owner of a displaced irrigation canal. Negotiations have been ongoing with the canal owner for nearly two years without any meaningful progress.
- Further, a critical section at Herndon Ave. in Fresno has been delayed because the right-of-way owner has required at least seven rounds of revisions of the structure’s design.
- The report also detailed wasteful spending by the authority, including an agreement to build a farmworker housing project in Wasco. The farmworkers were living in a complex that was not impacted directly by the project but was situated next to it. The authority could have paid for a sound barrier wall to mitigate noise impacts but instead paid $10 million to relocate the workers. Wasco then demanded that the authority clean up the original farmworker housing, which became blighted. The authority initially refused before agreeing to clean it up and sought a $24 million federal grant to do so.
What they’re saying: “I promised the American people we would be good stewards of their hard-earned tax dollars. This report exposes a cold, hard truth: CHSRA has no viable path to complete this project on time or on budget. CHSRA is on notice– if they can’t deliver on their end of the deal, it could soon be time for these funds to flow to other projects that can achieve President Trump’s vision of building great, big, beautiful things again,” Duffy said. “Our country deserves high-speed rail that makes us proud – not boondoogle trains to nowhere.”
- Rep. Vince Fong (R–Bakersfield) applauded the report, saying High-Speed Rail has become one of the most glaring examples of government waste in California history.
- “This failed project has spiraled into a chronically mismanaged and over-budget endeavor – costing taxpayers billions with little to show for it,” Fong said. “I applaud the Federal Railroad Administration for releasing today’s Compliance Review Report that finds the California High-Speed Rail Authority’s project is in default of the terms of its federal grant awards – likely leading to the termination of both their Technical Assistance Cooperative Agreement and the FY10 Financial Assistance Cooperative Agreement. This report confirms what we’ve known all along: continually missed deadlines, massive budget overruns, and wildly inflated ridership projections.”
- Fong continued, “This report exposes the drastic failure of California’s High-Speed Rail Authority and sends a clear and necessary message: the federal government will no longer bankroll broken promises and failed leadership. The federal government is stepping up to protect California taxpayers and reinforce the values of fiscal responsibility, transparency, and accountability. It’s time to move past costly pipe dreams and focus on real, achievable infrastructure solutions that truly serve the needs of our communities.”
- On the other hand, Rep. Jim Costa (D–Fresno) blasted the Trump administration for pulling $4 billion in federal funding for the project.
- “He doesn’t understand the San Joaquin Valley or the legal challenges that have delayed this project. Instead, he is stalling progress and killing good-paying jobs to score political points,” Costa said. ”While President Trump remains stuck in the past, the people of California and the Valley are focused on building a cleaner, more connected future through modern rail infrastructure.”
- Costa added, “The President of the United States asked the question years ago, why America doesn’t have high-speed rail systems like those in Europe and Asia. The answer to that question is simple. He could provide the leadership to build high-speed rail corridors in America, as other countries have over the last 40 years in other parts of the world.”
