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California is looking for new ways to finance its high-speed rail project following the Trump administration’s decision to pull billions of dollars in federal funds from the project.
Transportation Secretary Sean Duffy in July announced the administration is terminating $4 billion in unspent federal funding for the California High Speed Rail Authority (CHSRA) that was allocated by the Federal Railroad Administration. Duffy and President Donald Trump slammed the project as a “boondoggle” for its cost overruns and slow progress, while Duffy announced a new funding cut of $175 million this week.
The state of California filed a lawsuit against the funding cut, while Gov. Gavin Newsom called the move “yet another political stunt to punish California.”
With billions of federal dollars being potentially taken on the table, CHSRA and project supporters are looking for other ways to bring in the needed funding to move the project forward including building solar farms on adjacent land to help power the train and sell excess energy to power data centers.
TRUMP ADMIN PULLS PLUG ON $4B FOR CALIFORNIA’S ‘TRAIN TO NOWHERE’ PROJECT
The California High Speed Rail Authority is exploring other means of financing its project after the Trump administration cut funding. (David Paul Morris/Bloomberg via / Getty Images)
Other potential revenue streams under consideration include selling right-of-way for utilities to operate transmission lines, developing real estate near stations and allowing freight service in off-peak hours.
CHSRA said in a report released last week that, with its current funding and Newsom’s proposal to provide $1 billion a year from the state’s “Cap-and-Invest” program to high-speed rail for 2045, they are projected to be sufficient to complete the 171-mile Merced-to-Bakersfield segment and begin operations within the agency’s schedule window.
CALIFORNIA SUES OVER BILLIONS LOST IN HIGH-SPEED RAIL FUNDS AS NEWSOM BATTLES TRUMP ADMINISTRATION
California Gov. Gavin Newsom filed a lawsuit challenging the Trump administration’s move to cancel funding for the high-speed rail project. (John Nacion/WireImage / Getty Images)
“Private investors and industry partners are more likely to engage and partner to deliver the California high-speed rail project if the state demonstrates a long-term funding commitment. Such a commitment could encourage the private sector to offer additional financing and equity investment in exchange for operational rights,” CHSRA said.
The report added that strong public funding serves as a signal to the private sector about the project’s future and outlined potential long-term financing proposals the state could consider, though it cautioned that state action is needed to ensure that financing is available, and the project can be extended to the Bay Area.
TIMELINE OF CALIFORNIA’S YEARSLONG AND ‘DISASTROUSLY OVERPRICED’ HIGH-SPEED RAIL PROJECT
Transportation Secretary Sean Duffy rescinded federal funding from the CHSRA’s project. (Tierney L. Cross/Bloomberg via / Getty Images)
The CHSRA noted that there are “171 miles currently under design and construction from Merced to Bakersfield. Nearly 70 miles of guideway are complete, along with 55 fully completed structures; an additional 29 more structures are underway across Madera, Fresno, Kings and Tulare counties.”
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