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BREAKING: U.S. DOT Terminates Agreement with California High Speed Rail Authority

Takes back more than $928 million not yet spent on construction of the bullet train

By Katy Grimes, February 19, 2019 5:02 pm

The U.S. Department of Transportation terminated its agreement with the California High Speed Rail Authority in a letter Tuesday, and ordered the return of more than $928 million not yet spent on construction of the bullet train.

The Federal Railroad Administration said it intends to terminate the grant effective March 5, and said California rail officials failed to comply with the terms of the funding, appropriated in 2010 by Congress.

As California Globe noted last week:

“California’s High Speed Rail scheme no longer resembles the Proposition 1A bond initiative sold to voters back in 2008, or the promise of true high speed rail service from Los Angeles to San Francisco or Sacramento.”

Proposition 1A, $9 billion in bonds for high-speed rail, included numerous mandates, none of which can be legally bypassed on the way to building the massive train system.

Top on the list is that the rail system must be high-speed. “Electric trains that are capable of sustained maximum revenue operating speeds of no less than 200 miles per hour,” the law states. However, most of the planned segments in the Central Valley are not high-speed; nor will high-speed be attainable in dense cities.

The Federal Railroad Administration said in the letter California High Speed Rail Authority project has missed “timely and satisfactory financial reports,” as well as several important deadlines tied to the $928 million appropriation. The letter addressed that CHSRA has no chance of finishing the first phase of the project by the 2022 deadline.

The Federal Railroad Administration said it “has regularly communicated its concerns on the above issues to CHSRA,” and noted that “California Governor Newsom presented a new proposal that represents a significant retreat from the state’s initial vision and commitment.”

The FRA said because the CHSRA “failed to take appropriate corrective actions,” the FRA plans to “de-obligate the full $928,620,000 obligated under the agreement.”

This follows last Wednesday when President Donald Trump demanded California Governor Gavin Newsom return the $3.5 billion the state received from the federal government for the “disaster” high-speed rail project. “California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars,” Trump tweeted. “They owe the Federal Government three and a half billion dollars. We want that money back now. Whole project is a ‘green’ disaster!”

As Newsom said in his State of the State address last week about the High Speed Rail scheme, “But let’s be real. The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency.” Newsom said while there isn’t a path to get from Sacramento to San Diego, or from San Francisco to LA, “we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.”

“And by the way,” Newsom added, “I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump.”

It appears the capacity to to complete a high-speed rail link between Central Valley towns Merced and Bakersfield has just been “de-obligated,” with the DOT saying it will pursue “every legal option” to get back all of its grant money given to CHSRA.

Katy Grimes

Katy Grimes, the Editor of the California Globe, is a long-time Investigative Journalist covering the California State Capitol, and the co-author of California's War Against Donald Trump: Who Wins? Who Loses?
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