US cancelling another $175 million in California high-speed rail projects

By David Shepardson

Aug 26 (Reuters) - The U.S. Transportation Department said on Tuesday it is cancelling $175 million for four projects that are part of California's high-speed rail project, following cancellation of $4 billion in federal grants for the state's ambitious but much-delayed high-speed rail project in July.

The Trump administration said Tuesday it will withdraw funding for grade separation, overcrossing, design work and to build a high-speed rail station in Madera. California in July sued to challenge the withdrawal of funding, calling the decision illegal.

President Donald Trump and California Governor Gavin Newsom have repeatedly clashed and earlier on Tuesday USDOT threatened to cancel $33 million in safety funding for the state after the department said California was not enforcing federal rules requiring truck drivers to be able to speak English.

The funding cuts are another hurdle to the 16-year effort to link Los Angeles and San Francisco by a three-hour train ride, a project that would deliver the fastest passenger rail service in the United States.

The California High-Speed Rail Authority said Tuesday the announcement "is a continuation of the Trump Administration’s illegal, politically motivated, and baseless attack on California High-Speed Rail and Central Valley communities... While opponents are recycling tired political attacks, California is building the future of American transportation.”

The rail system, whose first $10 billion bond issue was approved by California voters in 2008, has built more than 50 major railway structures, including bridges, overpasses, under-crossings and viaducts, and completed 70 miles (113 km) of guideway.

The funding cancellation marked the latest confrontation between the Republican president and a Democratic governor widely viewed as a leading contender for his party’s 2028 White House nomination.

The two men have clashed over issues from transgender athletes and electric car rules to the use of National Guard troops during Los Angeles protests and even egg prices.

The San Francisco-to-Los Angeles route was initially supposed to be completed by 2020 for $33 billion. But the projected cost has since risen to $89 billion to $128 billion, and the start of service is expected by 2033.

A previous move by Trump during his first term in 2019 to revoke $929 million in federal grants was challenged by the state, leading to a settlement in June 2021 under Democratic President Joe Biden restoring the full amount.