As California’s High-Speed Rail Authority waits anxiously for a response from the Trump administration regarding the future of the train, project leaders are sounding the alarm about its financial stability. The authority’s board of directors gave the green light on Thursday to contracts for designing Central Valley stations and to seek and approve construction bids for the Fresno station. Prior to the votes, board member James Ghielmetti expressed concerns about the potential loss of funds from the Department of Transportation and the risks associated with advancing payment commitments when federal funding is in doubt.
“I’m pretty nervous about getting that federal money,” Ghielmetti admitted. “I just want to make sure my fellow board members are aware that if the federal funds don’t come through, someone’s gotta step in to cover these contracts.” Authority staff reassured that the contracts have termination clauses in case of insufficient funds, and there are contingency funds available to bridge any funding gaps. However, Ghielmetti argued that terminating contracts would only derail the project further and emphasized the need for funds to stay on track if they want to meet their deadlines.
The board, consisting of nine members serving four-year terms, is responsible for approving policies related to the project’s finances, strategies, and businesses. Board member Martha Escutia echoed Ghielmetti’s worries, insisting on the importance of solidifying a financial plan as they continue to make decisions on expenditure. “We’re clearly in a tough spot,” she acknowledged.
In February, the Department of Transportation initiated a review of compliance with the project following demands for an investigation by Republican lawmakers due to delays and cost overruns. The review is specifically looking into a $4-billion commitment made under the Biden administration for construction in the Central Valley. The project, initially aimed at connecting Los Angeles to San Francisco by train by 2020, is now $100 billion over budget and years behind schedule.
Transportation Secretary Sean Duffy didn’t mince his words, labeling it a “crappy project” and indicating that his department’s review would assess whether the spending aligns with the agreements between the authority and the U.S. government. The authority has furnished the necessary documentation and is awaiting the review’s findings. Approximately $14 billion has already been spent on the project, with 82% of the funding coming from the state and the remaining 18% from the federal government. Board Chair Tom Richards disclosed that around $4 billion is currently available.
Despite uncertainties surrounding federal funding, Chief Executive Ian Choudri emphasized the immediate goal of completing construction on a 119-mile stretch between Madera and Shafter in the Central Valley. Choudri, who assumed the CEO role last year, stressed that private sector investment would play a crucial role in the project’s future. Pending state approval, he aims to have a financial plan in place by the end of summer, including establishing partnerships with the private sector.
The notion of public-private partnerships and reducing dependence on government support has been discussed in board meetings, and state-appointed committee members have consistently raised this point. Choudri mentioned that even with support, it could take up to two more decades to finish the train project.
Overall, the future of California’s high-speed rail remains uncertain, with financial challenges and the need for alternative funding sources looming large.
