California high-speed rail loses $929M in federal funds over 'critical failures'

The Federal Railroad Administration (FRA) announced on Thursday that it would end an agreement with the California High-Speed Rail Authority, withholding nearly $1 billion in federal funds, and putting the future of the project in question.

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The decision was made based on the rail authority’s “repeated failure to submit critical required deliverables and its failure to make sufficient progress to complete the project.”

The government has determined that a fiscal 2010 deal was violated as the state has “failed to make reasonable progress.” It also determined the rail authority is likely unable to accurately forecast a long-term schedule and costs. As such, more than $928.6 million will be de-obligated.

“As described further below, CHSRA [California High-Speed Rail Authority] is chronically behind in project construction activities and has not been able to correct or mitigate its deficiencies. Overall, such critical failures completely undermine FRA's confidence in CHSRA's ability to manage the project effectively,” Federal Rail Authority chief Ronald Batory wrote.

The FRA has given the project $2.5 billion, with $929 million more pledged. The administration previously threatened to withhold the promised funds in March, prompting a response from the California Rail Authority alleging that would “gravely harm” the project, which needs the money to fund the “final set of tasks” for completion.

Trump has been highly critical of the plan, claiming “many billions of dollars” had been wasted on it.

The initial plan was to build a line connecting San Francisco to Los Angeles, which would cost $79 billion. However, Gov. Gavin Newsom pared down the project earlier this year, concentrating on a line connecting Bakersfield to Merced. The governor acknowledged that critics might call this “a train to nowhere,” which he said was wrong. At the time, he said the initial project would “cost too much” and “take too long.” He did acknowledge he would eventually continue the broader project.

The project was supported by Newsom’s predecessor Gov. Jerry Brown. It was estimated that it would have been completed by 2033. It is projected the train would have transported more than 120,000 riders per day, at speeds of up to 200 mph.

The project is among the most expensive infrastructure projects in the U.S. According to a recent report from the state’s High-Speed Rail Authority, the line in California’s Central Valley, which is under construction, will cost $12.4 billion – up from initial estimates of $10.6 billion. The entire Central Valley segment is expected to cost more than $20 billion.

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Oracle co-founder Larry Ellison previously said the initiative could become one of the state’s “great embarrassments” during an interview with FOX Business. In his opinion, in the future people are going to be taking autonomous electric cars from Los Angeles to San Francisco “at a tiny fraction of the cost,” affording them the leisure to leave whenever they please.