US Sees No Viable Path for California High-Speed Rail Project, May Rescind $4 Billion

The Trump administration said Wednesday there is no viable path forward for California's High-Speed Rail project and warned it may rescind $4 billion in government funding in the coming weeks.

The U.S. Transportation Department released a 315-page report from the Federal Railroad Administration that cited missed deadlines, budget shortfalls, and questionable ridership projections. One key issue cited is that California has not identified $7 billion in additional funding needed to build an initial segment between Merced and Bakersfield, California.

USDOT gave California until mid-July to respond and then the administration could terminate the grants. Trump said last month the U.S. government would not pay for the project.

The FRA report Wednesday said California had "conned the taxpayer out of its $4 billion investment, with no viable plan to deliver even that partial segment on time."

The California High-Speed Rail System is a planned two-phase 800-mile system with speeds of up to 220 miles per hour that aims to connect San Francisco to Los Angeles/Anaheim and in the second phase extend north to Sacramento and south to San Diego.

Voters approved $10 billion for the project in 2008 but the costs have risen sharply. The Transportation Department under former President Joe Biden awarded the project about $4 billion.

The entire San Francisco-to-Los Angeles project was initially supposed to be completed by 2020 for $33 billion but has now jumped from $89 billion to $128 billion.

The California High-Speed Rail Authority, which did not immediately comment Wednesday, said last month the rail project "is delivering real results. There is active civil construction along 119 miles in the Central Valley, resulting in over 15,000 construction jobs, and design and pre-construction activities are underway on the extensions to Merced and Bakersfield totaling 171 miles."

In 2021, Biden restored a $929 million grant for California's high-speed rail Trump had revoked in 2019 after the Republican president called the project a "disaster."