Press Releases

Congressional GOP Transportation Leaders Probing Failed California High-Speed Rail Project

Washington, D.C., May 29, 2024 | Justin Harclerode (202) 225-9446
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U.S. House Transportation and Infrastructure Committee Chairman Sam Graves (R-MO) and U.S. Senate Commerce Committee Ranking Member Ted Cruz (R-TX) are asking the Department of Transportation (DOT) to turn over documents and information regarding the Biden administration’s decision to waste billions in taxpayer money on the failed California High-Speed Rail project.

While California High-Speed Rail was intended to cost California taxpayers a total of $33 billion and be completed four years ago, not a single segment of the system has been completed to date. Meanwhile, the total estimated cost has ballooned to $128 billion (and counting), and there is no expected date of completion. 

In a letter to DOT Secretary Pete Buttigieg, Rep. Graves and Sen. Cruz highlighted that the high-speed rail project has far exceeded its proposed budget despite the fact that it is nowhere close to being finished.

"Voters were promised that the California High-Speed Rail project would cost the state $33 billion and be completed by 2020. Fifteen years later, the California High-Speed Rail project has become one of the most troubled ‘megaprojects’ in the nation.

“The California High-Speed Rail Authority (CHSRA) still has not completed a single segment of the system, the total estimated cost has ballooned to $128 billion and counting, and there is no expected completion date. CHSRA has recently focused its efforts on completing a 171-mile segment between Merced and Bakersfield. This segment alone will cost more than $35 billion to serve about two million riders annually.”

As the letter points out, California is now seeking substantial federal subsidies as the project far exceeds the state’s ability to finance it. Even the California High-Speed Rail Peer Review Group, an independent group of California passenger rail experts, has called into question whether the project is even possible given the roughly $100 billion gap between estimated costs and known funding.

“In March 2023, the CHSRA Peer Review Group, whose job is to evaluate CHSRA’s funding plans, sounded the alarm. It reported an astounding ‘unfunded gap of $92.6 billion to $103.1 billion between estimated costs and known State and Federal funding’ for the full San Francisco-to-San Diego system.

“Moreover, for just the Merced-to-Bakersfield section, the unfunded gap is at least $2.5 billion. The CHSRA Peer Review Group further concluded, with poignant understatement, that ‘there are few who would argue that completing this short section, by itself, at a cost of up to $35 billion, can be justified. Rather it would make sense only in the context of a commitment to building the complete . . . system.’ Furthermore, the entire ‘system poses a growing financial challenge for the State because the gap is already large, and costs have been increasing faster than identifiable potential financing while forecast ridership has fallen.’ To put it another way, even if California could find the billions of dollars it needs to complete the Merced-to-Bakersfield section, it would not be prudent to use that funding unless the state could also commit to an additional $100 billion to build the entire system. Indulging this endeavor may also have substantial implications for both California and the Federal government’s ability to improve the broader interstate surface transportation system.”

Given the fact that there is no reasonable path forward for successful completion of the California High-Speed Rail project, Rep. Graves and Sen. Cruz questioned the Biden administration’s decision to award the project billions of dollars in federal taxpayer funds—funding that could have been spent on more cost-effective and successful projects.

“Despite evidence that continues to show that the California High Speed Rail project has critical issues indicating there is no reasonable path forward for successful completion of the project . . . the Biden administration continues to allocate substantial federal taxpayer dollars on this highly questionable endeavor.

. . .

“Recent submissions to the California legislature continue to reflect significant concerns that this project will fail. In its March 2024 update, the Peer Review Group noted that the $3.3 billion in DOT awards over the last year have not closed even half of the unfunded gap for the isolated Merced-to-Bakersfield segment. The Inspector General (IG) of CHSRA also highlighted the need for a more detailed funding plan for Merced-to-Bakersfield and for management controls to limit project risk. The prognosis for the full system is bleak, with an unfunded gap as high as $99 billion.

“DOT grant programs provide valuable funding for critical infrastructure projects across the country for our constituents, yet funding is not available for every project. As such, DOT must ensure funding goes to the most viable and effective projects. DOT itself states that its project review process must ‘help ensure that taxpayers are getting the highest value for every dollar invested.’ It is unclear if DOT complied with its own guidance to safeguard taxpayer dollars when selecting CHSRA for such a large amount of grant funding. As such, many other cost effective and worthy projects may have lost out on this funding in favor of CHSRA. Accordingly, DOT’s recent refusal to provide the Senate documents regarding the evaluations of applications, which could shed light on the relative merits of non-selected projects, compounds existing concerns.”

The letter concludes by asking DOT to schedule an in-person briefing with Committee staff and turn over documents and information related to the California High-Speed Rail project no later than June 12, 2024.

To read Rep. Graves and Sen. Cruz’s full letter to DOT, CLICK HERE.

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