California high-speed rail officials on Monday called on the Trump administration to engage in constructive talks – rather than threats – over $3.5 billion in disputed federal funding for the state’s bullet train project in the Central Valley.
Writing in response to a federal warning last month – and to tweeted demands by President Donald Trump to give federal funds back – California High-Speed Rail Authority CEO Brian Kelly argued that “withdrawing federal funds from this project is unwarranted, unprecedented and harmful to the people and the economy of the Central Valley, California and the nation.”
Kelly told Federal Railroad Administration chief Ron Batory that the state has “met our obligations under our federal grant agreements to date” despite federal contentions to the contrary.
“I urged him to follow a more constructive path: join me in restoring a functional relationship between our agencies and engage in a structured process to share information, review project risks and resolve all issues to move forward on the project together,” Kelly said in a press statement released Monday afternoon.
The response from Kelly comes one day before a deadline federal officials set for comments from California. The Federal Railroad Administration had sent a letter to Kelly last month saying it plans to withhold a crucial $929 million in upcoming bullet train grant funds, and may start a legal process to recoup another $2.5 billion it has already granted the state.
Federal officials contended that California is not making adequate progress on the project under the terms of the federal funds. In a letter to the state, federal officials pointed out that the state’s new governor, Gavin Newsom, had described the project as bloated and in danger of failing unless the scope of the initial phase is cut back.
“The current project, as planned, would cost too much and take too long,” Newsom said during his State of the State speech.
Newsom said he wasn’t abandoning the rest of the project, but admitted the state does not have the money for now to extend the line from the Valley to the Bay Area and to Los Angeles.
The Federal Railroad Administration pointed out that the federal funds were granted with the idea of building a system that would “connect San Francisco in the north and Los Angeles and Anaheim in the south.”
In his letters to the FRA Monday, California’s high-speed rail head Kelly sought to reconcile Newsom’s comments with the terms of the state’s federal funding agreements. Kelly said Newsom is offering a “pragmatic” approach to using the existing federal and state funding to “get high-speed rail trains on the ground as soon as possible - by completing an early high-speed rail link operating in the Central Valley.” Ultimately, the line would connect to the coast, he said. He described the Newsom view as “wholly consistent with the train project concept the state submitted to the FRA previously.”
Kelly said the challenges the state’s high-speed rail project faces “are the product of joint decisions” made over the years by the state and federal officials. “I am committed to successfully managing those risks, and I am requesting your partnership to do so,” Kelly told Batory.
The FRA press office issued a statement Monday afternoon saying the agency has received Kelly’s response and is reviewing it.
High-speed rail has been burdened with problems for years, and last fall the California State Auditor in a scathing report warned the High-Speed Rail Authority it was in danger of losing its federal grants because it was proceeding too slowly. The auditor said the rail project must “double the rate” of Valley construction to meet a December 2022 deadline imposed by the feds. At current rates, the Valley segment won’t be done until 2027, the auditor said.
Trump has tweeted repeatedly in recent weeks that the state’s high-speed rail project is a disaster and a waste, and demanded the state give money back.
State high-speed rail officials said they plan to come out with a new project update report in May that should include an assessment of the changes Newsom has proposed.