USDOT's Duffy: No viable path forward for California high-speed rail project

Editor's note: This story has been updated with comments from the California High-Speed Rail Authority.

U.S. Transportation Secretary Sean Duffy today announced the Federal Railroad Administration's compliance review of California's high-speed rail project has found the project is in default of the terms of its federal grant awards.

The California High-Speed Rail Authority (CHSRA) has up to 37 days to respond to the FRA's findings, after which the grants could be terminated, according to a U.S. Department of Transportation press release.

The FRA's review report contains nine findings, including missed deadlines, budget shortfalls and overrepresentation of projected ridership. The project's two federal grants total about $4 billion.

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 $6.9 billion in federal funding over the past 15 years but has not laid a single high-speed track, USDOT officials said. Even with continued federal support, the project is far short of the funding needed to finish just a fraction of the track, they added.

"This report exposes a cold, hard truth: CHSRA has no viable path to complete this project on time or on budget," said Duffy.

A spokesperson for the CHSRA described the FRA's conclusions as "misguided" and said they don't reflect the project's substantial progress.

"We remain firmly committed to completing the nation’s first true high-speed rail system connecting the major population centers in the state," the CHSRA spokesperson said in an email. "While continued federal partnership is important to the project, the majority of our funding has been provided by the state."

To that end, California Gov. Gavin Newsom's budget proposal now before the state Legislature would extend at least $1 billion per year in funding for the next 20 years, which would provide the necessary resources to complete the project's initial operating segment in California's Central Valley, the spokesperson said.

"The authority will fully address and correct the record in our formal response to the FRA's notice," the spokesperson added.

In February, Duffy announced the FRA would review two grants awarded to CHSRA: a $929 million cooperative agreement from 2010 and a $3 billion cooperative agreement from 2024. A copy of the report and the full letter to Choudri can be read here.