Leaders of California’s high speed-rail project are sounding the alarm on the project’s financial future after nearly 20 years of delays and billions of tax dollars spent, the Los Angeles Times first reported.
After California’s High-Speed Rail Authority board members voted to approve new contracts for the Central Valley station and construction bids for a Fresno station on Thursday, several members raised concerns over the project’s financial commitments and future, the publication reported. The railway, which was supposed to be completed by 2020 and cost $33 billion, was recently projected to reach $106 billion, prompting lawmakers and the Trump administration to place the entire project under a microscope.
“I’m very nervous about receiving the federal funding,” board member James Ghielmetti said. “I want to make sure my fellow board members are aware that if the federal money does not come through, somebody’s got to backstop these contracts.”
Initially pitched as a high-speed rail system linking Los Angeles and San Francisco with a target completion around 2020, the Bakersfield-to-Merced segment isn’t expected to be finished before 2030 at the earliest.
Authority staff noted that the federal contracts contain termination clauses in case of insufficient funding and that contingency funds are available to cover potential shortfalls. Ghielmetti warned that canceling contracts would only further delay the project and emphasized the importance of having those funds in place to stay on track.
The Department of Transportation launched a compliance review of the project in February after Republican lawmakers called for an investigation into its delays and rising costs. The review is examining a $4 billion funding commitment made during the Biden administration for construction in the Central Valley.
The investigation should determine whether the project will retain its federal funding.
“For too long, taxpayers have subsidized the massively over-budget and delayed California High-Speed Rail project,” Transportation Secretary Sean Duffy said in a press release on the investigation. “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,” Duffy continued.
“The Governor — like a majority of Californians — fully supports the project and he wants it delivered as quickly and efficiently as possible,” a spokesperson for Democratic California Gov. Gavin Newsom told the Daily Caller News Foundation. “With 50 major structures built, walking away now as we enter the track-laying phase would be reckless — wasting billions already invested and letting job-killers cede a generational infrastructure advantage to China.”
Ian Choudri, CEO of California High-Speed Rail Authority, said the project could take another 20 years and would need financial support from the private sector.
“We are obviously in trouble,” board member Martha Escutia said, noting that a concrete financial plan is necessary.
A little less than 20% of the funding comes from the federal government, and the other 80% is state funded, with about $4 billion in the bank, board chair Tom Richards said.
“No state in America is closer to launching high-speed rail than California – and today, we just took a massive step forward,” Democratic Gov. Gavin Newsom said in a January press release, before the Trump administration launched its investigation. “The future of transportation is being realized right here in the Central Valley with thousands of good paying jobs already created and 171 miles being worked on. As only California can, we’re building America’s biggest infrastructure project.”
The California High Speed Rail Authority and its board members, and the Department of Transportation did not immediately respond to the Daily Caller News Foundation’s request for comment.
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