Derailed? Feds plan to cancel nearly $1B for California's high-speed rail project

Sheyanne N Romero
Federal Railroad Administrator Ronald Batory wrote Tuesday to state officials that the administration was canceling its grant agreement with the California High-Speed Rail Authority, and halting $928.6 million in future grant payments it was expected to make to fund the project through 2022.

The U.S. Department of Transportation plans to cancel $929 million in federal funding for California's high-speed rail project, threatening the state's plan to complete the first phase of a project that has intensified a rivalry between President Donald Trump and California Gov. Gavin Newsom.

In a Tuesday letter from the Federal Railroad Administration addressed to Brian Kelly, CEO of California's High-Speed Rail Authority, Administrator Ronald Batory wrote that the cancellation of funds will take effect on March 5. The FRA is also considering legal action to recover $2.5 billion in federal funds already used on a 119-mile stretch that would connect Merced and Bakersfield in the state's Central Valley.

Newsom, though, has repeatedly said the state will not return the money. 

Gov. Gavin Newsom said he wants to finish high-speed rail construction that’s already underway on a segment through the Central Valley.

"CHSRA has materially failed to comply with the terms of the agreement and has failed to make reasonable progress on the project ... significantly endangering substantial progress," Batory wrote. 

The rail project has faced cost overruns and years of delays. The Trump administration argues California hasn’t provided required matching dollars and can’t complete work by a 2022 deadline.

“This is clear political retribution by President Trump, and we won’t sit idly by,” Newsom said in a statement. “This is California’s money, and we are going to fight for it.”

Last week, Newsom announced he’s putting on hold a plan to build a high-speed rail line between Los Angeles and San Francisco. The project has ballooned to $77 billion.

“Let’s be real,” Newsom said in his first State of the State address. “The current project, as planned, would cost too much and respectfully take too long. There’s been too little oversight and not enough transparency.”

This is the latest spat between the White House and California. Earlier Tuesday, Trump linked the emergency declaration lawsuit to the train, noting that California filed the challenge on behalf of 16 states.

“California, the state that has wasted billions of dollars on their out of control Fast Train, with no hope of completion, seems in charge!” the president tweeted.

Contributing: The Associated Press

This article originally appeared on Visalia Times-Delta: Derailed? Feds plan to cancel nearly $1B for California's high-speed rail project