WASHINGTON — The Department of Transportation is proposing an end to federal funding of the California high-speed rail project.

What You Need To Know

  • Drew Feeley, acting administrator for the Federal Railway Authority, said the California high-speed rail project is in default of the terms of its federal grant awards

  • The two grants are made up of roughly $4 billion in taxpayer funds, which the federal government plans to revoke unless the California High-Speed Rail Authority takes corrective action

  • The compliance review, according to Feeley, revealed “patterns of unattainable proposals and unrealistic assumptions on a wide range of issues” 

  • The project was placed under a compliance review in February by Duffy, focused specifically on the $4 billion in grants the Biden administration awarded for two parts of the high-speed rail between Los Angeles and San Francisco

The announcement came in the form of a 315-page letter from Drew Feeley, acting administrator for the Federal Railway Authority, saying the project is in default of the terms of its federal grant awards, including missed deadlines, budget shortfalls and over representation of projected ridership. The two grants are made up of roughly $4 billion in taxpayer funds, which the federal government plans to revoke unless the California High-Speed Rail Authority takes corrective action in the next 37 days.

The compliance review, according to Feeley, revealed “patterns of unattainable proposals and unrealistic assumptions on a wide range of issues,” including the availability of funding, the cost of electrification, the schedule for train set procurement and safety and performance testing, and projected ridership data. Feeley also criticized the “countless change orders” for the project, which CHSRA estimates cost around $1.6 billion over the last two years.

“Simply put, CHSRA is not using State or Federal funding to advance responsibly the CHSR Project. Rather, it is simply perpetuating the same inefficient project management activities with change order after change order,” Feeley said.

"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,” Department of Transportation Secretary Sean Duffy said in a statement. “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.”

A spokesperson for Gov. Gavin Newsom referred Spectrum News to the California High-Speed Rail Authority and pointed to comments the governor made on May 14 defending the rail project.

"The Authority strongly disagrees with the FRA’s conclusions, which are misguided and do not reflect the substantial progress made to deliver high-speed rail in California," a spokesperson for the California High-Speed Rail Authority said in a statement. "We remain firmly committed to completing the nation’s first true high-speed rail system connecting the major population centers in the state. While continued federal partnership is important to the project, the majority of our funding has been provided by the state. To that end, the Governor’s budget proposal, which is currently before the Legislature, extends at least $1 billion per year in funding for the next 20 years, providing the necessary resources to complete the project’s initial operating segment. The Authority will fully address and correct the record in our formal response to the FRA’s notice."

The high-speed rail project was initially approved by California voters in 2008 and was projected to cost $33 billion with a target completion date of 2020. But a 2022 business plan by the California High-Speed Rail Authority projected a $105 billion price tag, over triple the original cost, with only 22 miles of the 400 mile route ready for tracking. Earlier this year the first piece of track was laid.

The project was placed under a compliance review in February by Duffy, focused specifically on the $4 billion in grants the Biden administration awarded for two parts of the high-speed rail between Los Angeles and San Francisco — in Merced and Bakersfield. The state has invested $15 billion on the project, while the federal government has invested $2.7 billion previously.

Earlier this year, the California Legislative Analyst’s Office projected there was a $7 billion gap between projected funding and costs.

California Republicans, who have been critical of the project and stood behind Duffy in February when the compliance review was announced, were quick to support Wednesday’s announcement.

“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,” said Bakersfield Rep. Vince Fong, R-Calif., in a statement on X. “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.”