California Construction News staff writer
The U.S. Department of Transportation has issued a formal warning to California, stating that approximately $4 billion in federal funding for the state’s high-speed rail project is at risk of termination. The announcement follows the release of a 315-page compliance review by the Federal Railroad Administration (FRA), which found the California High-Speed Rail Authority (CHSRA) in violation of key terms in two major federal grant agreements.
The report, published June 4, details nine key findings, including missed construction deadlines, a $7 billion funding gap for the Merced-to-Bakersfield segment, inflated ridership projections, and insufficient budget contingency planning. The FRA concluded that the CHSRA has failed to present a viable plan to complete the 171-mile segment by the required deadline.
U.S. Transportation Secretary Sean Duffy said the state has 37 days to respond to the findings. If the response is deemed inadequate, the federal government may rescind both a $929 million grant issued in 2010 and a $3.07 billion award provided last year, totaling nearly $4 billion.
“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,” Duffy said in a statement.
The FRA’s report criticized what it described as persistent project delays and lack of financial clarity. The agency noted that without immediate corrective action and additional funding, the CHSRA will not meet its construction goals, placing the entire federal investment at risk.
The CHSRA has not yet released a formal response but has previously maintained that the state remains committed to completing the high-speed rail project, which it says will provide a critical transportation link between major population centers in California.
The Merced-to-Bakersfield segment is currently the only portion of the larger San Francisco-to-Los Angeles rail line under active construction. The federal review represents the most serious challenge to the project’s future since its inception.
