Biden restores $1.23 billion for California high-speed rail withheld by Trump

US President Joe Biden wants dramatically increasing funding for passenger rail networks.
US President Joe Biden wants dramatically increasing funding for passenger rail networks.PHOTO: AFP

CALIFORNIA (REUTERS) - The Joe Biden administration late on Thursday (June 10) restored a US$929 million (S$1.23 billion) grant for California's high-speed rail that former president Donald Trump revoked in 2019.

The parties, which also include the California High-Speed Rail Authority and the US Transportation Department, agreed to restore the grant within three days, according to the settlement agreement.

Talks began in March, months after Mr Biden became president, to settle the suit filed in 2019 after Mr Trump had pulled funding for a high-speed train project in the state hobbled by extensive delays and rising costs.

Mr Trump had repeatedly clashed as president with California on a number of fronts. California's lawsuit claimed the Transportation Department lacked legal authority to withhold the US$929 million the Barack Obama administration allocated a decade ago but had remained untapped.

"The Biden administration's restoration of nearly $1 billion for California's high-speed rail is great news for our state and our nation," US House of Representatives Speaker Nancy Pelosi, a Democrat from California, said in a statement reacting to the agreement.

The project had over 35 active construction sites along 119 miles in the Central Valley as of March, according to the California High-Speed Rail Authority. The project had created over 5,500 jobs, authorities said in March.

The funding restoration occurs as the Biden administration tries to hammer out an infrastructure spending agreement with lawmakers.

While Mr Trump ridiculed the California project, calling it a "disaster", Mr Biden strongly supports high-speed rail and has vowed to ensure that the United States "has the cleanest, safest and fastest rail system in the world".

Mr Biden wants dramatically increasing funding for passenger rail networks.

California's system, which is billed by the state as the first US high-speed rail project, is estimated to cost from US$69 billion to US$99.8 billion and aims to be completed in the 2030s.

California Governor Gavin Newsom said the funding restoration will "move the state one step closer to getting trains running in California as soon as possible".

California voters approved the initial US$10 billion bond for the project in 2008, and US$3.5 billion in federal money was allocated two years later. California previously received US$2.5 billion.

California State Treasurer Fiona Ma noted in a letter on Monday that the Obama administration had allocated US$10.5 billion for high-speed rail projections in 2009 and 2010 and that there are still no operational US high-speed rail lines as a result.

"To be clear, a repeat effort that spends billions without getting any new lines operational after another decade will be the death of high-speed rail in America," Ms Ma wrote to congressional leaders.

"There is simply no way the public will continue to support such an agenda without seeing tangible results."