As California’s High Speed Railroad Bureau awaits words from the Trump administration about future support for the train, leaders overseeing the project were wary of its economic viability.
The authorities’ board of directors approved a contract for the development of the Central Valley Station design on Thursday, and voted to approve and approve the construction bid for Fresno Station. Prior to the vote, board member James Guilmetti raised concerns about the potential loss of funds from the Department of Transport and the risks of advancing payment commitments if federal funds are at risk.
“I’m extremely nervous about receiving federal funds,” Guilmetti said. “I want to make sure my fellow board members are aware that if federal money doesn’t go through, someone will mess up these contracts.”
Authority staff said the contract included a termination clause if there was not enough money, and emergency funds were present to make up for the shortfall if the funds were passed. Ghielmetti argued that he emphasized that if the end of the contract is simply moving the project further out of the course and the goal is to return to the schedule, those funds must exist.
The board is made up of nine members, each serving a four-year term tasked with approving policies relating to the project’s business, finance and strategy. Board member Martha Espea reiterated Guilmetti’s concerns and said that financial plans need to be solidified as the board continues to vote on whether the money will continue to be spent.
“We’re clearly in trouble,” she said.
The Transportation Department began a compliance review of the project in February following a call by Republican lawmakers to investigate delays and costs. This review focuses on $4 billion promises made under the Biden administration to build Central Valley.
Originally aiming to connect Los Angeles to San Francisco by train by 2020, the project costs $100 billion with initial budget and delayed schedules. This is an issue that railway experts have said will only get worse if the funding pool is reduced. Transport Secretary Sean Duffy called it a “silly project,” and said his department’s review would analyze whether spending was consistent with an agreement between the authorities and the US government.
Authorities have provided documents and are hoping for the findings soon.
Board chair Tom Richards said about $14 billion was spent on the project. The majority of that funding (82%) comes from the state. The remaining 18% is granted by the federal government. About $4 billion is in the bank, Richards said.
Despite uncertainty over federal funding, CEO Ian Choudri said the construction would be completed along a 119-mile stretch between Madera and Shafter in Central Valley. Choudri, who took on the CEO role last year and reported to the board, said private sector investments are key to the future of the project. Pending state approval, he hopes to implement a financial plan by the end of the summer, including that relationship.
The idea of the need for public-private partnerships for the project and non-government trust has emerged on the board and was regularly raised by state-appointed committee members advising the board.
With that support, Choudri said it could take about 20 years for the train to be completed.
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