California Eyes More Bullet-Train Funds Despite Trump Clawback

(Bloomberg) -- President Donald Trump is seeking to claw back billions in funds for a contentious California high-speed rail project. That’s not stopping the head of the agency running it from seeking even more federal financing.

Lenny Mendonca, the chair of the authority’s board, said that he expects there to be more federal support once the state completes an initial segment under construction in the interior agricultural region known as the Central Valley. In February, the Trump administration said it would cancel about $930 million in federal funds and try to recoup $2.5 billion already allocated to the project.

California Eyes More Bullet-Train Funds Despite Trump Clawback

“Don’t think about the federal government as the president of the United States,” Mendonca said in an interview in San Francisco. “The federal government is much broader.”

Mendonca said the U.S. transportation and railroad agencies -- which had informed California of the intent to claw back federal funds -- have been “great partners,” along with Congress. The state hasn’t received a response from federal authorities to its letters rebutting the reasons cited for pulling the funds, he said. His board will release an update of the project on May 1.

Initially conceived as connecting San Francisco and Los Angeles with a high-speed train that would slash travel times and transform the state’s economy, the project has been beset by cost overruns and delays causing its estimated price to balloon to $77 billion. Governor Gavin Newsom, who took office this year, said in a February speech that the rail as planned “would cost too much and take too long” and he would focus on finishing roughly 170 miles of track in the Central Valley and preliminary work on the entire system.

His comments were initially interpreted as walking away from the bullet train that has been in the works for more than a decade. Officials later said that the goal of connecting the two ends of California remains. Trump blasted the project as wasteful in tweets, and his agencies moved against it a week after Newsom’s remarks.

Once California can show a completed segment, more federal funding, as well as private investment, will follow, said Mendonca, who is also Newsom’s top economic and business adviser.

“As we deliver, there will be” more support, he said.

©2019 Bloomberg L.P.

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