Concerns are mounting regarding the future of California’s high-speed rail project after Transportation Secretary Sean Duffy indicated that the initiative has breached key terms of its federal grant agreements.
In a statement released on Wednesday, Duffy asserted that the California High-Speed Rail Authority (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,” Duffy emphasized.
A Compliance Review Report from the Federal Railroad Administration noted nine alleged “broken promises” from the project that reportedly violate terms of its federal grants. These include missed deadlines, funding deficiencies, and insufficient resources to fulfill project commitments.
The rail authority has expressed strong dissent regarding the Trump administration’s assertions. A spokesperson stated to Finance Newso that the authority “strongly disagrees” with the findings of the report, highlighting that the majority of the funding is sourced from the state of California. The spokesperson further mentioned that they intend to “correct the record” in their response to the Federal Railroad Administration.
“We remain firmly committed to completing the nation’s first true high-speed rail system that will connect major population centers in the state,” the spokesperson affirmed.
Roughly $4 billion in federal grants are designated for developing high-speed rail service across California’s Central Valley, which is planned to link major urban areas between Merced and Bakersfield—a distance of about 170 miles.
The report stipulates that the rail authority has seven days to issue an initial response, followed by an additional 30 days to contest the claims or face the potential loss of grant funding.
“Simply put, CHSRA is not using state or federal funding to advance responsibly the CHSR Project,” stated Federal Railroad Administration Acting Administrator Drew Feeley in the report, attributing part of the issue to “poor planning.”
This announcement comes after a flag raised in February by the rail authority’s inspector general, which questioned the feasibility of the 2033 completion schedule. The review noted increased uncertainty surrounding the project’s trajectory due to financial gaps and construction delays, among other challenges.
California’s high-speed rail ambitions trace back to 2009, when the Federal Railroad Administration allocated $2.55 billion for what was intended to be the United States’ first high-speed railway linking Los Angeles and San Francisco across 800 miles. The trip was projected to take less than three hours.
However, ten years later, California Governor Gavin Newsom significantly scaled back the initiative, focusing solely on the section between Merced and Bakersfield.
The current Central Valley project is estimated to cost around $22 billion, as per the Federal Railroad Administration, with a targeted completion timeframe set for 2033.
“At this rate, CHSRA will never complete the CHSR System,” the report concluded.
