By Maxwell Adler, Bloomberg
California has withdrawn a lawsuit against the Trump administration that sought to recover roughly $4 billion in federal funds pulled from the state’s long-delayed high-speed rail project, after concluding it can no longer rely on the federal government to help deliver the system.
The suit was filed after the Federal Railroad Administration began canceling federal grants for the project totaling about $4 billion, arguing the California High-Speed Rail Authority had failed to deliver on commitments amid years of delays and cost overruns.
State officials challenged the action in court, saying that the administration was violating binding grant agreements. But California has now opted to drop the case and press ahead without backing from the federal government under President Donald Trump.
“This action reflects the State’s assessment that the federal government is not a reliable, constructive, or trustworthy partner in advancing high-speed rail in California,” a spokesperson for the California High-Speed Rail Authority said in an email.
The Federal Railroad Administration had warned that all work performed by the authority remained “at risk” of nonpayment, the spokesperson said, leading the state to conclude that the administration was unlikely to uphold its commitments.
The authority framed the move as an opportunity to streamline construction. “Federal requirements have, at times, hindered project delivery by adding cost and delays without adding value,” the spokesperson said.
The Federal Railroad Administration did not immediately respond on Wednesday to a request for comment.
The California High-Speed Rail Authority launched an effort to bring in private investors on Dec 19, issuing a request for qualifications to select a co-development partner to help deliver the project faster.
Approved by voters in 2008 with an initial $33 billion price tag, the project is now estimated to cost as much as $128 billion. An inspector general report earlier this year found the system is unlikely to begin passenger service on its first segment by 2033 and faces a multibillion-dollar funding gap even before the loss of federal aid.
–With assistance from Robert Burnson.
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