US Secretary of Transportation Sean P. Duffy yesterday ordered the Federal Railroad Administration (FRA) to investigate whether $4bn pledged by the Biden administration for the California High-Speed Rail project should be withdrawn.
The 494-mile Phase 1 link would connect San Francisco in the north to Los Angeles and Anaheim in the south. Its estimated cost has risen from around $33bn in 2008 to more than $100bn today.
The review will examine the California High-Speed Rail Authority’s compliance under the FRA-administered grant agreements to see if it has met its obligations under the award terms.
“For too long, taxpayers have subsidised the massively over-budget and delayed California High-Speed Rail project,” Duffy said.
“President Trump is right that this project is in dire need of an investigation. That is why I am directing my staff to review and determine whether the CHSRA has followed through on the commitments it made to receive billions of dollars in federal funding. If not, I will have to consider whether that money could be given to deserving infrastructure projects elsewhere in the United States.”
Funding gaps
Duffy noted that the California High-Speed Rail Office of the Inspector General has calculated that just the Merced-to-Bakersfield segment has a funding gap of at least $6.5bn.
He also noted that in March 2023, the CHSRA Peer Review Group reported an “unfunded gap of $92.6 billion to $103.1 billion between estimated costs and known State and Federal funding” for the whole San Francisco-to-Los Angeles connection.
In January, the Inspector General noted estimates saying the entire link would “cumulatively create a total of 1,034,000 job-years of employment, and total economic activity of $221.8 billion”.
Ian Choudri, chief executive of the California High-Speed Rail Authority, said the agency welcomes the FRA investigation.
“With multiple independent federal and state audits completed, every dollar is accounted for, and we stand by the progress and impact of this project,” he said, reports Reuters.
“California’s high-speed rail is 171 miles under active construction, with over 50 major structures completed, 14,700 jobs created, and more than 880 small businesses engaged.”
On the Brightline side
After criticising the California High-Speed Rail Authority for slow progress, Duffy praised another high-speed project in the region, the $12bn Brightline West scheme, a 218-mile link between Las Vegas and Rancho Cucamonga, near Los Angeles.
The Biden administration granted it $3bn at the end of 2023. The rest of the funding is expected to come from private investment. It’s aiming to start operating in 2028.
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