Funding cut for California project seen as a setback

California's high-speed rail project, the largest infrastructure undertaking in the United States, faces a significant setback after the administration of President Donald Trump announced the termination of $4 billion in federal grants to the already troubled initiative.

The project, which originated in the early 2000s, was designed to position California as a leader in advanced transportation while stimulating the state's economy. However, the original scope has been repeatedly scaled back due to extensive delays and substantial cost overruns.

The Federal Railroad Administration at the US Department of Transportation issued a report last week finding that the high-speed rail project has broken the terms of two federal grants totaling approximately $4 billion. Key findings include missed deadlines, budget shortfalls and inflated ridership projections.

The federal agency has given the California High-Speed Rail Authority, or CHSRA, responsible for designing, building and operating the state's high-speed rail system, until July 11 to propose corrective measures before the funding termination. California's officials have indicated they will pursue legal action once the grant is withdrawn.

"Upon termination of the grant, California can file suit under the Administrative Procedure Act, or APA. The act permits challenges based on various grounds," David Freeman Engstrom, a law professor at Stanford University, told China Daily.

"The most likely claim that California will assert under the APA is that the Federal Railroad Administration acted in an arbitrary and capricious manner, by failing to apply the right factors in terminating funding or by failing to show a rational connection between the facts found and the decision to cut off funds," Engstrom explained.

It marks the second time that California has confronted the administration over high-speed rail funding. In 2019, during Trump's first term, nearly $1 billion in grants were slashed, prompting California to file a lawsuit.

Experts said any new lawsuit could extend for years, while the funding termination threatens to significantly affect construction progress and potentially result in layoffs.

The high-speed rail project was originally conceived to connect Los Angeles and San Francisco with trains capable of completing the journey in under three hours at speeds exceeding 322 kilometers per hour, according to the CHSRA.

Since California voters approved project bonds in 2008, estimated costs have surged from the initial $33 billion to $128 billion over the past 17 years. The project currently focuses on a 277-km segment from Bakersfield to Merced in the Central Valley, with completion targeted for 2033.

The US currently operates no high-speed rail networks. Two high-speed rail lines are under construction — the California High-Speed Rail and Brightline West, which will link Las Vegas to Southern California.

Political considerations have long influenced California's high-speed rail project.

Ray LaHood, former transportation secretary under former president Barack Obama and co-chair of the US High-Speed Rail Coalition, attributed the US failure to develop high-speed rail networks to insufficient federal support and lack of political consensus.

"Opponents of California's high-speed rail program continue to jeer from the sidelines, as the project reports new cost increases. But the real impediment to progress is a long-term lack of federal support for high-speed rail," wrote LaHood in a 2023 article for CalMatters, a nonprofit news organization.

The funding cuts have ignited political debate across California and Washington, with arguments largely following partisan lines. Supporters, predominantly Democrats, maintain that the project is essential for the state's future mobility and climate goals, while opponents, primarily Republicans, cite ongoing delays, cost overruns, and the system's reduced scope as evidence of mismanagement.