The Trump administration announced on Tuesday that it plans to cancel the nearly $1 billion in federal grant funds for California’s high-speed rail project that was promised to create a direct route from San Francisco to Los Angeles.
The Department of Transportation (DOT) in a press release also announced that it is “exploring every legal option to seek the return from California of $2.5 billion in Federal funds FRA previously granted for this now-defunct project.”
The Federal Railroad Administration (FRA) in a letter to the California High-Speed Rail Authority (CHSRA) released by DOT on Tuesday states that the FRA “intends to promptly de-obligate the full $928,620,000” earmarked for the project.
FRA indicates in the letter that CHSRA “has materially failed to comply with the terms” of the funding agreement “and has failed to make reasonable progress on the Project … significantly endangering substantial performance.”
Another factor that contributed to FRA’s decision to cancel funding was California Gov. Gavin Newsom’s announcement that the project would be scaled back amid delays and cost overruns, constituting “a fundamental change in the purpose of the overall project for which Federal funding was awarded.”
CHSRA has until March 5, 2019 to contest the cancellation.
The decision came soon after Gov. Newsom announced changes to the project in his State of the State address last week, namely “that the $77-billion project needed to be rethought and that the initial run would be in the Central Valley, not the San Francisco-to-Los Angeles route voters approved a decade ago,” The Los Angeles Times reports.
Trump following Newsom’s announcement criticized the project as a “‘green’ disaster’” and demanded California return $3.5 billion in federal stimulus funds.
“California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars,” he tweeted. “They owe the Federal Government three and a half billion dollars. We want that money back now. Whole project is a ‘green’ disaster!”
He followed that tweet with another indicating that the White House would be “reviewing the funding bill” for the project.
Gov. Newsom has defended his change in strategy for the bullet train which is severely over budget and behind schedule.
He tweeted in response to Trump, "This is CA's money, allocated by Congress for this project. We're not giving it back."
Trump again tweeted about the project early Tuesday, saying that the “failed Fast Train project” is “hundreds of times more expensive than the desperately needed Wall.”