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California high-speed rail could run out of money by December 2027, as authority cuts train order in half

From CBS News · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Ongoing story
  • California's high-speed rail project faces a potential funding shortfall, risking exhaustion of current resources by December 2027.
  • The project's inspector general warned of a $9.5 billion funding gap over five years, with borrowing costs potentially adding billions more.
  • The High-Speed Rail Authority has halved its train order and removed

California's ambitious high-speed rail project could run out of money by December 2027, according to a stark warning from the project's inspector general. The authority faces a $9.5 billion funding gap over the next five years, necessitating billions in borrowing that could inflate the project's costs by up to $6.6 billion in interest alone.

This financial warning arrives as a CBS California Investigation revealed the authority's repeated failure to meet deadlines for acquiring trains, a critical component of a $4 billion federal funding agreement. These deadlines were stipulated in the grant agreement and even promised to a federal judge. The authority subsequently dropped its lawsuit against the Trump administration shortly after missing a revised deadline.

The High-Speed Rail Authority "will exhaust its current funding resources as soon as December 2027 if it does not secure financing."

— Inspector General Ben Belnap's officeWarning about the project's financial future.

In response to these issues, the authority has revised its procurement notice. The train order has been cut in half, from six trainsets to three, with options for 19 more that carry no guarantee. The delivery deadline has also been pushed to February 2030. Furthermore, the authority is now considering a lease-purchase financing structure, potentially meaning the state may not own the trains outright. Crucially, the "Buy America" requirements, which mandate domestic assembly and components, have been removed for the initial trainsets. CBS California Investigates has sought clarification on the reasons for this removal, its implications for domestic manufacturing, and the impact on remaining federal funds, but the authority has not yet responded.

Legislative leaders in California are now calling for answers regarding the project's financial stability and procurement practices. The situation highlights significant challenges in delivering the high-speed rail vision, raising questions about accountability and the project's long-term viability.

"no Contract has been executed with any party"

— High-Speed Rail AuthorityAcknowledging the lack of a finalized train purchase agreement.
DistantNews Editorial

Originally published by CBS News. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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