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Home / News & Reviews / News Wire / FRA set to cancel $929 million California high speed rail grant, wants billions repaid NEWSWIRE

FRA set to cancel $929 million California high speed rail grant, wants billions repaid NEWSWIRE

By Bob Johnston | February 20, 2019

State has until March 5 to show Feds how it complied with terms of grant

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WASHINGTON – Federal Railroad Administration Administrator Ron Batory has sent a letter to the California High Speed Rail Authority announcing that the federal agency intends to terminate its existing grant agreement and “de-obligate” the entire $928.62 million grant that hasn’t been spent. The letter also states that the FRA is “is exploring all available legal options” to recover the nearly $2.5 billion in federal funds that have already been spent.

This follows California Gov. Gavin Newsom’s “state of the state” address last week in which he announced a scaled-back, 160-mile project in the Central Valley between Bakersfield and Merced, shelving plans to complete a Los Angeles-San Francisco system. A subsequent tweet meant to clarify that environmental work would continue, and the state wouldn’t be giving the money back, prompted a response from President Trump.

Beginning with management of the American Recovery and Reinvestment Act of 2009 grant during the Obama Administration, the FRA has challenged – but essentially accepted – the California High Speed Rail Authority’s explanation of why benchmarks in the agreement were missed.

But Batory’s letter cites the governor’s statement as “reinforcing concerns” and justifying termination, based on:

  • Failure to meet matching grant deadlines
  • Missing the project’s 2022 “period of performance” benchmark
  • Inability to effectively manage delivery of the project
  • Not taking “appropriate corrective actions to ensure delivery of the project”
  • Failure to produce realistic construction schedules

The letter, available below, asks for a response to these complaints by March 5.

22 thoughts on “FRA set to cancel $929 million California high speed rail grant, wants billions repaid NEWSWIRE

  1. I thought CA had made it plain in recent years that it would be quite happy outside the USA– unless the rest of the states would let CA dictate to everyone else just how things were to be run.

  2. For all you supposedly smart people, Anna included, it’s not true that once you join the Union you can’t leave. A state can leave, but Congress has to approve it…and there’s no way that Congress is going to give up the 16,6% of Federal income tax that California provides. Nor is the state bankrupt has some like to think, we passed that stage several years ago and are quite solvent, thank you.

    For those complaining about not spending California money to build it, you do realize that everything above and beyond the 3.5 Billion is from California and includes ZERO(0) Federal money. Also, that 929 Billion is for the CalTrain electrification, not HSR, and that is being built.

    As for Batory’s other statements…go look at the history of Highway construction with Federal money, none have ever been completed on time or within budget. Plus, even though this is for intra-state transportation, our economy supports the entire Southern United States, this would have just allowed us to grow even bigger and provide more money to Washington…maybe would should just stop collecting and sending the Federal portion in and see how they like it.

  3. GERALD You say no federally-aided highway projects have been completed on time or on budget.

    Your statement is utterly false. As a Wisconsin state taxpayer I can tell you that you know not of what you speak. Plenty of major highway projects are completed on time on budget.

    Even those that exceed schedule or exceed budget, typically come nowhere near, not within an order of magnitude, of the California rail boondoggle. There’s a difference between a highway project coming in 5% over budget, and Governor Brown’s HSR coming in at double or triple budget.

  4. Charles, have to love your pointless utterly false comments as well. Talk about the kettle calling the pot black. Why don’t you give your trolling a break and state something meaningful about Trains.

  5. 1. I thought CA’s Pension Systems were still way underfunded. If they are, CA’s financial woes have not been solved.
    2. Is CA actually spending nearly a trillion dollars to fund Cal Train electrification? That’s hard to believe even for CA.
    3. Federal funded highway projects often do come in on time and sometimes on budget. It just depends on what area of the country they are being built. The urban parts of the country are where the major problems seem to occur the most.

  6. Hey, here’s a source of funds to build the wall along the U.S.-Mexico border. Later, we can build another wall around California in order to keep them from polluting the rest of our country. Everywhere they go, problems caused by them always follow.

  7. Timothy – Sorry if I disappointed you. This thread- – this article – is about finance, not trains. See my comments under today’s thread about “Amtrak floats plan ….” On that topic I made comments about railroading. Scroll down and enjoy!

    The best comments on this – or any – blog are made by those with some experience or some pertinent opinions – about various topics. TRAINS-MAG is more than a railfan foamer magazine. It’s a professional journal read by people who know more than just about brass lanterns and Morse code telegraph.

  8. Get the money back. California has zero right to keep it. Gov. Newsom talking out of both sides of his mouth doesn’t strengthen his case.

  9. Well, let’s see now…three big ones…California can defund public assistance programs, fire prevention, the University of California, Medi-Cal, school lunches and school breakfasts, increase the gas tax, increase fines for traffic offences, charge for stays in jails…that ought to just about cover it…

    Oh, and there will need to be more cuts in these areas to fund the enhanced law enforcement that will be required.

    And abolish all public defender’s offices. Almost forgot. That ought to keep the Correctional Officers’ Association happy.

    The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Find your own damn lawyer.

  10. Typical California style construction project. They want everyone else to pay for their railroad and see nothing wrong with that. The ‘it’s our money, you gave it to us so you can’t have it back’ garbage is what is expected from the left coast. If it were to run from say Phoenix to LA or San Francisco, across state lines, maybe, but within Calf. for the benefit of only Calf. is of no interest to me. I’d rather waste my money between Boston abd Washington or Chicago and Detriot, ect. at least they cross state lines and are inter-state not intra-state rail lines.

  11. ANNA – Yes, if California pays back the money – as they should – they can cut their other programs to come up with the money. Not a problem for me if the squeeze a few percent out of the state’s useless spending, especially the billions paid to illegals who shouldn’t even be here.

  12. The feds should demand the money back and if it isn’t paid sue the state for it. And, for good measure, throw them out of the union and let them sink or swim on their own. Good riddance.

  13. ROBERT – Yes, California can secede from the union or if it doesn’t it should be thrown out. I’m so sick of reading that “California is the world’s 5th largest economy”. The size of an economy is not a measure of its viability or its stability. California is bankrupt and it’s dragging down the other 49 states with it.

  14. If we want to see high speed passenger trains, then first do it on the NEC, where ridership already exists. The pros & cons will be self evident. In America, NIMBY is the foil to just about all infrastructure improvements, and without a lot of positive feedback, HSR won’t get out of the starting gate.

  15. Mister Landey:

    I would be delighted if California, Oregon, Washington, Alaska, and maybe Idaho were to secede from the Union and either form the nation of Cascadia or merge with British Columbia and Alberta.

    But there is no legal way for this to happen.

    We fought a civil war on this very issue. The secessionists lost, as I recall. Once a territory joins the Union as a state, it is in for good. No takebacks.

    The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Find your own damn lawyer.

  16. Bahhh, 3 B’s, just a rounding error (or 3 F-35’s, depending how ya look at it). Wake me when they start talking about some real money…

  17. What rock do you live under Gerald McFarlane ? California supports the entire southern US ? LOLOLOLOLOL !! It’s the other way around. Without energy production of the rest of the country (mainly the south) California would cease to exist.

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