By Allen Payton
On Thursday, the Federal Railroad Administration (FRA) terminated the 2010 grant of $928.62 million to the California High-Speed Rail Authority, due to the new governor’s plans to scale back the project and the failure of the authority to deliver the project within the timeframe originally projected.
The FRA issued the following statement regarding the matter:
“After careful consideration, the Federal Railroad Administration (FRA) has terminated Cooperative Agreement No. FR-HSR-0118-12-01-01 (the FY10 Agreement) with the California High-Speed Rail Authority (CHSRA), and will deobligate the $928,620,000 in funding under that agreement. The decision follows FRA’s Notice of Intent to Terminate and consideration of the information provided by CHSRA on March 4, 2019. FRA finds that CHSRA has repeatedly failed to comply with the terms of the FY10 Agreement and has failed to make reasonable progress on the Project. Additionally, California has abandoned its original vision of a high-speed passenger rail service connecting San Francisco and Los Angeles, which was essential to its applications for FRA grant funding. FRA continues to consider all options regarding the return of $2.5 billion in American Recovery and Reinvestment Act (ARRA) funds awarded to CHSRA.”
The action was in response to Governor Gavin Newsom’s announcement during his State of the State speech in February, in which he outlined his administration’s plans to scale back the project, and threats to revoke the funds from President Trump.
“[L]et’s level about High-Speed Rail. The project, as currently planned, would cost too much and take too long,” Newsom stated. “There’s been too little oversight and not enough transparency. Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA. I wish there were. However, we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.”
In addition to the FRA’s statement, FRA Administrator Ronald Batory sent a scathing letter to Brian Kelly, CEO of the California High-Speed Rail Authority, detailing the reasons for the revocation of the funds. CHSRA – FRA Ltr 5-16-2019
“FRA has determined that CHSRA has violated the terms of the FY 10 Agreement and consistently failed to make reasonable progress on the Project. Despite FRA’ s identification of Project issues, and the ample time provided to CHSRA to take appropriate remedial actions, CHSRA instead chose delay and inaction,” Batory wrote in conclusion. “In FRA’s view, there is nothing in FRA’ s long working relationship with CHSRA to suggest that CHSRA would likely be able to initiate and complete the necessary corrective actions, if given yet another opportunity. Finally, the dramatically reduced scope of California’ s current plan for its HSR System is simply not consistent with the Project as CHSRA proposed in its applications for Federal financial assistance on the Project. For these reasons, and those set forth in this decision, FRA has determined to terminate the FYlO Agreement, effective today, and will deobligate the associated funds.”
To see all the related documents related to the termination of the grant, click here.