U.S. seeks return of $2.5 billion California high-speed rail funds

Gavin Newsom elected governor of California

Gavin Newsom elected governor of California

The U.S. Transportation Department said on Tuesday it will cancel $929 million in federal funds awarded by the Obama administration for a California high-speed rail project and is "actively exploring every legal option" to seek the return of $2.5 billion the state has already received.

The U.S. Department of Transportation announcement follows through on President Donald Trump's threats to claw back $3.5 billion that the federal government gave to California to build a bullet train between Los Angeles and San Francisco. However, the Democratic governor insisted he isn't killing the rest of the project altogether and said the state will explore ways of financing a project that links the Bay Area with Southern California.

"Abandoning high speed rail entirely means we will have wasted billions of dollars with nothing but broken promises and lawsuits to show for it", Newsom said.

The Federal Railroad Administration determined that the California High-Speed Rail Authority, the state-run organization tasked with overseeing the project "has materially failed to comply with the terms" of the agreement that promised $929m in federal funds for construction, Batory wrote in a letter to Brian Kelly, the authority's chief executive.

However, after his announcement, President Donald Trump excoriated the project, tweeting on February 13, "We want that money back now".

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The train project has faced repeated cost overruns and delays since California voters approved it in 2008.

Newsom, in a statement, linked the Trump administration action to California leading 15 other states in challenging what he called "the President's farcical 'national emergency, '" to obtain funds for building a wall along the U.S. -Mexico border. "We're not giving it back", he tweeted last week in response to Trump's threats.

In addition, the rail authority "has failed to provide FRA with timely and satisfactory financial reports and other related deliverables". This included not making reasonable progress on the project and significantly endangering substantial performance.

He said the project is already creating thousands of jobs, and he lauded Newsom's idea of focusing on the Merced-to-Bakersfield segment first, then ultimately connecting the whole state. The state has not started spending that money. "You can't rip us up and leave".

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