The federal government plans to conduct a financial review of any federal funding earmarked for the California high-speed rail project, Transportation Secretary Sean Duffy said Feb. 20 at a press conference in Los Angeles' Union Station.

“I am going to exercise my authority as transportation secretary to direct the Federal Railway Administration (FRA) to initiate a compliance review of funding to the California high-speed rail authority,” he said. 

Duffy called the project a “black hole” of wasted money that is “severely off-track.” He said the financial review will focus on $4 billion that was pledged to the Merced-to-Bakersfield portion of the project by the Biden administration. More than $3 billion in construction has been completed there.

Duffy, who replaced Pete Buttigieg as transportation secretary last month, said this portion of the project in the state’s Central Valley is “going to cost California and federal taxpayers between $33 to $35 billion, and at best it won’t be complete until 2033 or 2035, which is way after this whole project was to be completed.”

He said the review will help determine whether billions of dollars of taxpayer money should be committed to California’s high-speed rail. “We are going to look at whether California high-speed rail has actually complied with the agreements that have been signed with the federal government,” said Duffy, adding that the federal government has already given the project $2.7 billion. “We can't just give money and not hold states accountable to how they spend that money.”

The California High Speed Rail Authority responded to Duffy on social media. “We welcome this investigation and look forward to working with federal partners,” the Authority wrote on X. “California high-speed rail has been audited over 100 times. Every dollar is accounted for and progress is real—50 structures built, 14,600 jobs created and 171 miles under construction.” 

When asked by ENR if he believes the rail project would be viable with proper oversight and contractors, the secretary responded that the DOT will “completely listen” to California if it submits a plan to the legislature and federal government that cuts red tape and is ready to build. 

“We are committed to investing in good projects that move people between cities, but you cannot invest in projects that go nowhere,” he said. “So can California figure out how to build a project in an allotted amount of time with an allotted amount of money, because right now, all of the estimates have been wrong.”

Duffy’s remarks come a week after President Trump called the project "mismanaged," and after a Feb. 3 report by the department's Office of Inspector General for the project found that just the Merced-to-Bakersfield segment has a funding gap of at least $6.5 billion. 

The first Trump administration in 2019 threatened to cancel $929 million in federal grant money for the planned Los Angeles-Bay Area line, shortly after California and other states challenged that administrations' attempts to declare emergency funding for a border wall.