“Let’s be real. The project, as currently planned, would cost too much and take too long,” said Newsom. “There’s been too little oversight and not enough transparency.”
In 2008, the total estimated cost of the rail was $40 billion, but delays and inflation have increased the estimate to anywhere from $98.5 billion to $118 billion.
California’s state auditor, Elaine Howle, submitted a report in November, concluding that poor decision making and management led to delays and wasted money.
“We determined that even with a grant deadline extension until December 2022, the [California High-Speed Rail] Authority could miss the new deadline unless Central Valley construction progresses twice as fast as it has to date. Missing the deadline could expose the State to the risk of having to pay back as much as $3.5 billion in federal funds.”
“We determined that the Authority has failed to implement sound contract management practices. As a result, it cannot demonstrate that the large amounts it has spent on its contracts have been necessary or appropriate,” according to the report.
Newsom said he does not plan to abandon high-speed rail entirely. Instead, he intends to build a link between Merced and Bakersfield. To critics who argue the train would lead to nowhere, he said Central Valley has potential.
“We can align our economic and workforce development strategies, anchored by High-Speed Rail, and pair them with tools like opportunity zones, to form the backbone of a reinvigorated Central Valley economy,” he said.
We're going to make high-speed rail a reality for CA. We have the capacity to complete the rail between Merced and Bakersfield. We will continue our regional projects north and south. Finish Phase 1 enviro work. Connect the Central Valley to other parts of the state.
— Gavin Newsom (@GavinNewsom) February 12, 2019
Brian Kelly, CEO of California High-Speed Rail Authority, welcomed Newsom’s proposed plan.
“We are eager to meet this challenge and expand the project’s economic impact in the Central Valley,” said Kelly in a press release.
Newsom also said he is “not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump.”
The next day President Trump replied in a tweet, “We want that money back now. Whole project is a “green” disaster!”
California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars. They owe the Federal Government three and a half billion dollars. We want that money back now. Whole project is a “green” disaster!
— Donald J. Trump (@realDonaldTrump) February 14, 2019
Newsom has plans to invest elsewhere. Some of the issues he proposed for funding are water, education, and housing.
He intends to set aside $80 billion for education, more than half a billion for homeless centers, and hundreds of millions of dollars more on housing.