According to a report from the U.S. Department of Transportation’s Federal Railroad Administration (FRA), the California High-Speed Rail Authority (CHSRA)’s high-speed rail project has no path forward and faces termination of its $4 billion in grant funding.
Citing missed deadlines, budget shortfalls, and overrepresentation of projected ridership, the Compliance Review Report found that the project is in default of the terms of its federal grant awards and falls short of the funding it needs in order to complete the project, despite receiving nearly $7 billion in federal grants. The report noted the project’s delays, mismanagement, waste and skyrocketing costs without a single track laid.
“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,” U.S. Transportation Secretary Sean Duffy said. “Our country deserves high-speed rail that makes us proud – not boondoggle trains to nowhere.”
In a letter to CHSRA’s CEO, Ian Choudri, the FRA said the organization has up to 37 days to respond to the report, or face grant termination.
In February, Duffy said the US DOT would be investigation the project and reviewing two grants awarded to the project – a $929 million cooperative agreement from 2010 and a $3.07 billion Cooperative Agreement from 2024. Under his direction, the FRA conducted a review of CHSRA’s compliance with federal grant agreements related to more than $4 billion funding. The resulting 310-page report found that CHSRA has executed numerous change orders and will likely have many more to account for contractor expenses resulting from project delays. Additionally, the report found CHSRA has missed deadlines for finalizing rolling stock procurement, has a $7 billion funding gap to complete the Early Operating Segment (EOS) and no plan to secure additional funds, as well as no path to complete the EOS by 2033, and lacks the time and money to electrify the EOS by 2033.
“Given CHSRA’s past performance, including substantial change orders, numerous contractor delay claims, protracted third-party arrangements, failure to account adequately for project risk, and lack of a credible plan to close the $7 billion funding gap, CHSRA is not likely to complete the Early Operating Segment (EOS) by 2033,” the report said. “In executing the FSP Agreement and re-obligating the FY10 Agreement, FRA relied on CHSRA’s representations, which were included as commitments in the funding agreements, that CHSRA would deliver the EOS by 2033.”
As such, CHSRA’s inability to deliver the EOS by 2033 renders the CHSR Project inconsistent with the goals of the HSIPR Program and constitutes a Project Material Change under the FSP Agreement. These findings support a conclusion that CHSRA is in default under the FSP Agreement and the CHSR Project no longer effectuates the goals of the funding programs, which may give rise to an action under the funding agreements, which could include termination.”