Trump Administration Official Says California Project In Default – Could Be On The Hook For BILLIONS

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Transportation Secretary Sean Duffy said California’s high-speed rail project is in default of its federal grant awards totaling $4 billion.

Duffy said there’s “no viable path” to complete the project on time or within budget.

“California 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 @POTUS’ vision of building great, big, beautiful things again,” Duffy said.

From the U.S. Department of Transportation:

U.S. Transportation Secretary Sean P. Duffy today released the Federal Railroad Administration (FRA) Compliance Review Report finding that the California High-Speed Rail Authority (CHSRA)’s high speed rail project is in default of the terms of its federal grant awards. The detailed report, which is over 300 pages, contains 9 key findings including missed deadlines, budget shortfalls, and overrepresentation of projected ridership. The two grants total roughly $4 billion in taxpayer money. As the letter notes, CHSRA has up to 37 days to respond, after which the grants could be terminated.

In a letter to CHSRA’s CEO, Ian Choudri, the FRA noted its report identified a trail of project delays, mismanagement, waste, and skyrocketing costs. The project has received approximately $6.9 billion in federal dollars in roughly fifteen years but has not laid a single high-speed track. Even with continued federal support, the project is far short of the funding needed to finish just a fraction of the track.

“I promised the American people we would be good stewards of their hard-earned tax dollars. This report exposes a cold, hard truth: CHSRA has no viable path to complete this 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,” said U.S. Transportation Secretary Sean P. Duffy. “Our country deserves high-speed rail that makes us proud – not boondoogle trains to nowhere.”

More from the New York Post:

Originally passed as a ballot initiative in 2008, the 800-mile rail line was supposed to be completed in two phases on a $33 billion budget by 2020, with a main line connecting San Francisco with Los Angeles and branches stretching north to Sacramento and south to San Diego.

By 2019, California Democratic Gov. Gavin Newsom announced that there was no path forward after costs ballooned to $77.3 billion and the project was drawn down to a 171-mile section between Merced and Bakersfield.

CHSRA officials later applied for $8 billion in grants from former President Joe Biden’s 2021 infrastructure law to help complete that Central Valley Segment, which has since been abbreviated further — to just 119 miles.

But nine months after the first tranche of money went out the door in September 2024, the authority had blown through a deadline to buy rail cars for the project, according to a Wednesday letter from Federal Railroad Administration (FRA) acting administrator Drew Feeley.

Feeley noted other procurement issues and up to $1.6 billion in misspent funds due to more than 1,000 change orders, pushing the projected budget up as high as $128 billion and making it unlikely the authority will meet its revised 2033 completion date.

In February, the state rail authority’s inspector general also found a $7 billion budget shortfall — roughly the same amount ($6.9 billion) that the feds had already forked over in grants since 2009.

Duffy launched the compliance review of the funding the same month, which found that CHSRA “currently has no credible plan, beyond seeking additional Federal funds, to address this funding gap.”



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