Duffy threatens to pull $4 billion from California high-speed rail

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Duffy threatens to pull $4 billion from California high-speed rail

Transportation Secretary Sean Duffy holds a news conference at Newark Liberty International Airport, where he announced the reopening of a major runway at the airport, nearly two weeks ahead of schedule on June 2, 2025 in Newark, New Jersey.

Spencer Platt | Getty Images

The future of a high-speed rail project in California is under threat after Transportation Secretary Sean Duffy said the project has violated some terms of its federal grant agreements.

The California High-Speed Rail Authority “has no viable path to complete this project on time or on budget,” Duffy said in a Wednesday

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.

“CHSRA is on notice — if they can’t deliver on their end of the deal, it could soon be time for these funds to flow to other projects that can achieve President Trump’s vision of building great, big, beautiful things again,” Duffy said.

The Federal Railroad Administration’s

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, which includes a letter addressed to California High-Speed Rail Authority CEO Ian Choudri, listed nine “broken promises” where the project allegedly breached terms outlined in its federal grants, including missed deadlines, funding gaps and a lack of adequate time and money to complete the project as promised.

The rail system group bristled at the Trump administration’s threat. The authority “strongly disagrees” with the report, a spokesperson told CNBC. Noting that most of the project’s funding is provided by the state of California, the authority spokesperson says the group plans to “correct the record” in its response to the Federal Railroad Administration.

“We remain firmly committed to completing the nation’s first true high-speed rail system connecting the major population centers in the state,” the spokesperson said.

The federal grants, which total roughly $4 billion, are funding the creation of a high-speed rail service in California’s Central Valley, which would connect major metropolitan cities between Merced and Bakersfield, roughly 170 miles.

The report gives the rail authority seven days to provide an initial response and 30 additional days to provide a dispute or risk losing its grant funds.

“Simply put, CHSRA is not using state or federal funding to advance responsibly the CHSR Project,” Federal Railroad Administration Acting Administrator Drew Feeley said, in part of the report.

Feeley pointed to “poor planning” as part of the problem.

The Wednesday development follows a February 

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 by rail authority’s inspector general, which claimed that the 2033 schedule was “unlikely.” That review cited increased uncertainty about the project’s future due to funding gaps and construction delays, among other reasons.

The high-speed rail efforts in California date back to 2009, when the Federal Railroad Administration invested $2.55 billion in the creation of the country’s first high-speed railway intended to connect the 800 miles of land between Los Angeles and San Francisco. The ride was

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to take under three hours.

Some 10 years later, California Gov. Gavin Newsom dramatically

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on the vision for the project, intending it to only serve the stretch of land between Merced and Bakersfield.

The current Central Valley project was projected to cost roughly $22 billion, according to the Federal Railroad Administration, with a completion date set for 2033.

“At this rate, CHSRA will never complete the CHSR System,” the report read.

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