US DOT to Review Funding for California High-Speed Rail

The US Department of Transportation (US DOT) has announced a review of the California High-Speed Rail project to assess whether federal funding commitments should continue.

The Federal Railroad Administration (FRA) will conduct the review under the direction of Transportation Secretary Sean P. Duffy.

The California High-Speed Rail Authority (CHSRA) was awarded federal grants under the Biden-Harris administration. However, the US DOT is now assessing whether around 4 billion USD of committed funding will be awarded.

This is due to concerns over the project’s delays and cost overruns. Secretary Duffy states that the project requires scrutiny to determine whether CHSRA has met the conditions for receiving federal funds. The review will assess CHSRA’s adherence to its grant agreements and evaluate whether funds should be reallocated to other infrastructure projects.

US Transportation Secretary Sean P. Duffy said:

For too long, taxpayers have subsidised the massively over-budget and delayed California High-Speed Rail project. President Trump is right that this project is in dire need of an investigation. That is why I am directing my staff to review and determine whether the CHSRA has followed through on the commitments it made to receive billions of dollars in federal funding. If not, I will have to consider whether that money could be given to deserving infrastructure projects elsewhere in the United States.

The California high-speed rail project was originally planned to connect San Francisco and Los Angeles at an estimated cost of 33 billion USD; however, the current estimate for this full connection has now increased to 106 billion USD. This increase is partly attributed to the COVID-19 pandemic, supply chain issues, and the freezing of federal funding during President Trump’s last term in office.

Although a significant investment is required to build the high-speed rail line, it is important to note that equivalent projects to expand highways or airport runways to meet the same capacity demands can cost twice as much and deliver none of the greenhouse gas emission benefits.

Indeed, Jim Mathews, President and CEO of the National Association of Railroad Passengers, has previously highlighted “the cost of doing nothing”, as not pursuing high-speed rail projects would also be expensive. This approach would still require billions of dollars to be spent, with funds instead spent on augmented issues such as congestion and road fatalities.

Meanwhile, CHSRA’s latest Economic Impact Analysis Report indicated that the project has generated nearly 22 billion USD in total economic activity. With a 13 billion USD investment to date, the project is reported to have played a key role in creating jobs and boosting local economies, particularly in disadvantaged communities.

Despite these benefits, the project’s initial phase between Merced and Bakersfield, has drawn criticism for its limited reach. At Global Mobility Call last year, Peter Brown, General Manager at Oceano Community Services District argued that while this segment was selected as the “path of least resistance,” it lacks in population density and travel demand. This raises concerns about the project’s ability to attract riders and deliver meaningful connectivity unless the full connection between San Francisco and Los Angeles is delivered.

The FRA’s investigation will focus on compliance and performance to identify reasons for the delays and increased costs. This review follows comparisons with other high-speed rail projects, including Brightline West, which aims to connect Los Angeles and Las Vegas with a projected start date of 2028.

As part of the process, FRA will examine CHSRA’s progress on the Merced-to-Bakersfield corridor and determine whether commitments made under federal grant agreements have been met. Further updates on the review’s findings and potential implications for federal funding allocations are expected in due course.