The United States Department of Transportation (US DOT) has announced it is terminating approximately 4 billion USD in unspent federal funding allocated to the California High-Speed Rail project.

The decision, outlined by Transportation Secretary Sean P. Duffy on 16 July, follows a compliance review conducted by the Federal Railroad Administration (FRA). This review concluded that the California High-Speed Rail Authority (CHSRA) could not meet its obligations under existing grant agreements.

The California High Speed Rail system plans to run from San Francisco to Los Angeles in under three hours at speeds of over 200 miles per hour

© State of California

The California High-Speed Rail project plans to connect Los Angeles and San Francisco. According to the Department of Transportation, the project has spent around 15 billion USD since its inception in 2008 without completing any high-speed track. The FRA’s review highlighted concerns including missed deadlines, funding gaps, and cost overruns.

However, this investment has already generated nearly 22 billion USD in economic activity.

Transportation Secretary Sean P. Duffy said:

This is California’s fault. Governor Newsom and the complicit Democrats have enabled this waste for years. Federal dollars are not a blank check – they come with a promise to deliver results. After over a decade of failures, CHSRA’s mismanagement and incompetence has proven it cannot build its train to nowhere on time or on budget.

It’s time for this boondoggle to die. President Trump and I will always fight to ensure your tax dollars only go to projects that accomplish great, big, beautiful things.

The FRA’s compliance review report, spanning over 300 pages, cited nine key findings. These included CHSRA’s delays in procuring rolling stock, a projected funding shortfall of at least 7 billion USD to complete the initial operating segment (EOS), reliance on unstable non-federal funding sources, and what the FRA described as inadequate budget contingency planning.

In contrast to these conclusions, the state’s Cap-and-Invest programme is projected to generate approximately 1 billion USD annually through 2045 for the project. What’s more, the CHSRA intends to issue a Request for Expressions of Interest (RFEI) to attract potential private sector partners for future phases of the project.

The US DOT report also noted CHSRA’s Inspector General had published a separate report in February 2025 indicating that the Merced to Bakersfield segment would not be completed by 2033, the target set under federal agreements. Following that, the FRA issued a formal Notice of Proposed Determination to Terminate funding on 4 June 2025. CHSRA submitted responses on 11 June and 7 July, which the FRA found did not sufficiently address its concerns.

In addition to terminating the current grants, Secretary Duffy has directed the FRA to review other federal grants related to the project. The Department of Transportation stated it would consult with the Department of Justice regarding potential recovery of previously allocated funds.

In spite of this controversy, work remains ongoing on the California High-Speed Rail project, and the state remains confident that its benefits will be realised.

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