Duffy threatens to pull California's high speed rail funding

The Trump administration notified California officials Wednesday that federal funding for the state's massive high-speed rail project is at risk of being pulled after a four-month review concluded the California High-Speed Rail Authority (CHSRA) has "no viable path" to complete the project on time or on budget.

"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," Transportation Secretary Sean Duffy said in a statement on the Federal Railway Authority (FRA)'s 310-page compliance review. "Our country deserves high-speed rail that makes us proud – not boondoggle trains to nowhere."

The Department of Transportation (DOT) has given CHSRA "up to 37 days" to respond before it moves forward with terminating two grants worth roughly $4 billion.

A CHSRA spokesperson told The Hill that the state agency "strongly disagrees" with the federal government's assessment of the project's progress, noting that most of the money for the high-speed rail system is coming from the state.

"We remain firmly committed to completing the nation's first true high-speed rail system connecting the major population centers in the state," the spokesperson said. "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."

Gov. Gavin Newsom (D) addressed concerns about the project's future under the Trump administration during a news conference in Sacramento last month.

"You can see the progress we've actually made with our high-speed rail system," he told reporters. "We're now on the other side of the environmental reviews; we're on the other side of the land acquisition."

"We're now on the other side, and we want to get this done," he added.

The FRA report highlighted the project's change in scope since its initial approval in 2008 under then-Gov. Arnold Schwarzenegger (R).

"The purpose of the Federal commitment was clear: to facilitate the delivery of true high-speed rail and serve as a catalyst for future deployment of high-speed rail beyond California," FRA acting administrator Drew Freely wrote in a letter to CHSRA officials. "FRA cannot continue to commit taxpayer dollars to CHSRA’s Sisyphean endeavor, which now stands as a fraction of what was promised back in 2008."

"In short, the CHSR project is a story of broken promises and of waste of Federal taxpayer dollars," he added.

Additionally, he wrote that the federal government is not seeking reimbursement from the state "at this time" for money already distributed but noted the FRA "reserves the right to do so consistent with applicable law."

The CHSRA spokesperson said the state plans to "fully address and correct the record in our formal response."

Duffy launched the review of California's high-speed rail project shortly after he was confirmed for as Transportation chief in February. According to the DOT, the investigation's findings were based on discussions with state oversight and CHSRA officials, construction site visits, a risk analysis and reviews of "several thousand documents."

It cited numerous change orders, increased costs, missed deadlines, funding gaps, construction delays and questions about ridership projections among the most severe concerns raised.