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FRA pulls funds from California high speed project

20 Feb 2019

USA: The Federal Railroad Administration announced on February 19 that it intended to cancel $929m of federal grant destined for the high speed rail project in California. In addition, FRA ‘is actively exploring every legal option to seek the return from California of $2·5bn in Federal funds FRA previously granted for this now defunct project’.

Writing to California High-Speed Rail Authority CEO Brian Kelly, FRA Administrator Ronald L Batory said that CHSRA had ‘materially failed to comply’ with the terms of the Co-operative Agreement providing for FRA funding for the project. It had also ‘failed to make reasonable progress on the project’.

Further, Batory pointed out that CHSRA had in December 2018 not achieved agreed commitments for funding contributions from the state of California, which was ‘an example of CHSRA’s failure to advance construction work and expend funds at a pace necessary to complete the project according to its schedule’. The FRA had therefore determined that CHSRA ‘will not complete the project by 2022’ as agreed.

CHSRA had also ‘failed to provide FRA with timely and satisfactory financial reports and other related deliverables’. This meant that the Authority had not demonstrated that it was making reasonable progress, nor was it effectively managing the project. Finally, Batory noted that CHSRA had ‘failed to take the appropriate corrective actions to ensure delivery of the project’.

The FRA’s decision to cancel the federal grant followed Governor Gavin Newsom’s announcement on February 12 that the California high speed programme would be scaled back, but not cancelled outright.