The California High-Speed Rail Project is being reviewed by the Federal Railroad Administration (FRA) under the direction of Secretary of Transportation Sean P. Duffy.

The review will help determine whether the roughly $4 billion in taxpayer money should remain committed to the proposed project to bring high-speed rail to the California Central Valley between Merced and Bakersfield.

Increasing Costs an Issue

Initially projected for completion by 2020 with a cost of $33 billion, the San Francisco to Los Angeles project has fallen behind those estimations. Currently, the Merced to Bakersfield segment alone is estimated to cost more than the original projection for the entire project.

The latest estimates for the project estimate a cost of $106 billion, more than three times the original estimate.

“For too long, taxpayers have subsidized the massively over-budget and delayed California High-Speed Rail project,” said U.S. Transportation Secretary Sean P. Duffy. “President Trump is right that this project is in dire need of an investigation. That is why I am directing my staff to review and determine whether the CHSRA has followed through on the commitments it made to receive billions of dollars in federal funding. If not, I will have to consider whether that money could be given to deserving infrastructure projects elsewhere in the United States.”

The California High-Speed Rail Office of the Inspector General recently noted that the Merced to Bakersfield segment alone has a funding gap of at least $6.5 billion. The gap remains despite California being due to receive over $4 billion from the Biden administration.

The Inspector General also found that the project has barely a projected ridership of about two million due to its failure to connect California’s larger cities and is unlikely to be completed by 2033.

Project Facing Funding Gap

In March of 2023, the California High-Speed Rail Authority (CHSRA) Peer Review Group evaluated their funding plans and reported an unfunded gap of $92.6 billion to $103.1 billion between estimated costs and known state and federal funding.

The Federal Railroad Administration is investigating the delays and cost overruns through a compliance and performance review. 

The Federal Railroad Administration review will examine the CHSRA and the progress made on the Merced to Bakersfield Corridor. The detailed review will also examine the California High-Speed Rail Administration’s compliance with the Federal Railroad Administration grant agreements to determine whether obligations have been fully met.