Sacramento: The Trump administration said Tuesday that it plans to cancel USD 929 million awarded to Californiaâs high-speed rail project and wants the state to return an additional USD 2.5 billion that it has already spent.
The US Department of Transportation announcement follows through on President Donald Trumpâs threats to claw back USD 3.5 billion that the federal government gave to California to build a bullet train between Los Angeles and San Francisco.
Gov. Gavin Newsom vowed a fight to keep the money and said the move was in response to California again suing the administration, this time over Trumpâs emergency declaration to pay for a wall along the US-Mexico border.
âThis is clear political retribution by President Trump, and we wonât sit idly by,â Newsom said in a statement. âThis is Californiaâs money, and we are going to fight for it.â
Itâs the latest spat between the White House and California. Trump earlier in the day linked the emergency declaration lawsuit to the train, noting that California filed the challenge on behalf of 16 states.
âCalifornia, the state that has wasted billions of dollars on their out of control Fast Train, with no hope of completion, seems in charge!â the president tweeted.
The train project has faced repeated cost overruns and delays since California voters approved it in 2008. The Trump administration argued Tuesday that the state hasnât provided required matching dollars and canât complete certain construction work by a 2022 deadline.
Newsom declared in his first State of the State address last week that he planned to scale back the project and focus immediately on building 171 miles (275 kilometers) of track in central California. His office said he still plans to complete the full line, although he said the current plan would cost too much and take too long.
Heâs pledged to continue environmental work on the full line, which is required to keep the federal money.
Congress nearly a decade ago approved the USD 929 million that Trump wants to cancel. The state has not started spending that money. But it has already spent the extra USD 2.5 billion that Trump now wants back.
The US Department of Transportation said it is âactively exploring every legal optionâ to get back the money.
The grant agreement between California and the federal government, signed in 2010, outlines several scenarios in which the federal government could take the money back. It can take the money back, for example, if the grantee fails to make âadequate progressâ or âfails to complete the project or one of its tasksâ or if the state doesnât meet its matching fund requirements.
If the federal government decides to take the money back, it doesnât have to wait for California to write a check. The agreement states the federal government could offset the money it would pay California for different transportation or other projects.
California hasnât yet fully matched the USD 2.5 billion in stimulus money. Itâs in the process of doing so now, using money from the 2008 bond passed by voters and revenue from the stateâs cap-and-trade program. It canât unlock the USD 929 million grant until it completes its match.
Still, the California High-Speed Rail Authority has already budgeted for the full USD 3.5 billion. Itâs put toward constructing a 119-mile (191.5-kilometer) segment of track in the Central Valley expected to cost USD 10.6 billion.
Dan Richard, the outgoing chair of the California High-Speed Rail Authorityâs board of directors, said peopleâs livelihoods depend on the project through jobs and other economic development in the Central Valley.
âIt would be very important to avoid anything that would disrupt the economic recovery in the Central Valley that has been brought about by high-speed rail,â he said.