California Fires Back at FRA Over High-Speed Report

By Jim Mathews / President & CEO

In a sharply worded rebuttal, the California High-Speed Rail Authority (CHSRA) yesterday accused the Federal Railroad Administration of advancing a misleading attack on the state’s high-speed rail project—just eight months after the same agency offered a clean bill of health for project compliance.

The FRA’s sudden pivot, which threatens to terminate billions in Federal funding agreements, "flies in the face of the FRA’s own Monitoring Report from October 2024," writes CHSRA CEO Ian Choudri. That report found no significant compliance issues, yet the FRA now claims California has failed to meet key obligations under two cooperative agreements signed as recently as Fall 2024.

“The proposed termination is apparently based on three broad conclusions: (1) the early operating segment (EOS) between Merced and Bakersfield is unlikely to be completed by 2033, (2) the Authority lacks a plan to fund the Project, and (3) the Authority has missed a project milestone to execute a contract for procurement of trainsets, which ‘calls into question the Authority’s ability to deliver on its promise to operate high-speed trains on the Central Valley Segment by 2033,’” Choudri writes. “These conclusions are not supported by the facts. And even if they were supported, they do not constitute grounds for terminating the Cooperative Agreements.”

The rebuttal letter begins by taking on the idea that there has been no meaningful progress, countering with images of major construction projects, including the complete and, in Choudri’s words, “magnificent,” San Joaquin River Viaduct in Fresno.

CHSRA’s forceful 14-page rebuttal outlines nine distinct counterarguments, each addressing specific findings in the FRA’s Compliance Review Report, which I’ve summarized here. Together, they form a portrait of a rushed and contradictory Federal effort to undermine a project that has become a political lightning rod. To read the full rebuttal, click here.

1. Change Orders Are a Red Herring

The FRA opens its critique by pointing to hundreds of millions of dollars in contract change orders, suggesting poor project management. But CHSRA notes that none of these were paid with Federal funds—and many stemmed directly from the FRA’s own safety mandates, including new intrusion protection barriers. Far from being evidence of mismanagement, the change orders reflect adaptive design improvements and compliance with Federal safety studies. Moreover, the FRA itself admits these changes don’t violate the terms of the agreements, and in any case change orders are common and expected in a project of this magnitude.

2. Trainset Procurement Delay Is Strategic, Not Derelict

The FRA claims California missed a milestone by not finalizing its rolling stock contract by the end of 2024. CHSRA doesn’t dispute the delay, but it argues the shift is intentional, designed to reduce costs and increase private-sector interest. By standardizing technical requirements before procurement, the Authority says it is aiming to avoid the kind of complexity that has bogged down major infrastructure projects nationwide. “This refined approach benefits the Authority, FRA, and the people of California,” the response reads.

I’m not convinced that taking another pass at the trainset designs and procurement is a good idea. In fact, I think it's a mistake. It misses an opportunity to help advance a standard single-level carbody platform for high-speed in the U.S., since Siemens has already created the widebody platform for Brightline. But that decision hardly constitutes dereliction, and certainly nothing on a scale that would justify pulling the cooperative agreement.

3. Funding Gap Is Narrowing, Not Disqualifying

Perhaps the most alarming of the FRA’s assertions is the claim that CHSRA lacks a credible plan to close a projected $7 billion funding gap for the Merced-to-Bakersfield segment. But the Authority counters with a new element: Governor Gavin Newsom’s May 2025 budget revision, which proposes locking in at least $1 billion annually through 2045 by extending the state’s Cap-and-Trade program, now called Cap-and-Invest. Combined with public-private partnership strategies already in development, CHSRA insists it now has a plausible, and legislatively backed, path to full funding. Your Association this week wrote letters to California legislative leaders supporting Newsom’s $1 billion predictable and dedicated funding plan. You can read the Rail Passengers Association letter here.

4. Project Schedule Is Feasible and Transparent

According to the FRA, the project’s Early Operating Segment, or EOS, cannot realistically be completed by 2033, but CHSRA calls this assertion unsupported. It points out that the FRA had access to all relevant schedule and budget materials when it approved and amended the project agreements less than a year ago. The same 2024 Business Plan used to question the timeline now was already under Federal review then. California officials also promise a new Supplemental Project Update Report this summer detailing how accelerated procurement and delivery will help meet the 2033 goal.

5. Cap-and-Trade Revenue Is Stable, Not Volatile

Federal reviewers single out California’s Cap-and-Trade program as an unreliable revenue source — an argument that might have made a little bit of sense before Newsom’s budget revision. Not anymore. The new plan guarantees a $1 billion annual minimum, insulating the project from quarterly auction fluctuations. CHSRA’s response highlights the hypocrisy: the FRA cites one underperforming quarter (August 2024) while ignoring years of steady revenue and strong voter support — 67% approval statewide according to an April 2025 poll.

“This is another example of cherry-picked data,” the Authority’s letter says. “Although one quarter in 2024 (August 2024) fell below $187.5 million, which was the low projection for the quarter, that same page and chart shows that quarter was an extreme outlier. The quarters both preceding and succeeding the selected quarter exceeded the total of that quarter by more than $100 million and the total auction proceeds for the year were above the average projection.”

6. Electrification Timeline Is Sound

The FRA implies that CHSRA cannot complete electrification in time to support revenue service by 2033, citing cost overruns on Caltrain’s project as precedent. But CHSRA responds that the comparison is misleading. Caltrain had to electrify an active line under tight overnight windows, while California’s high-speed line will be built on a closed corridor with uninterrupted access. The Authority plans to mobilize construction contractors by 2026 and has already begun procuring materials...steps FRA ignored entirely.

7. Contingency Funds Are Larger Than FRA Claims

The FRA accuses CHSRA of lacking adequate contingency funds to address future contractor claims. Yet the Authority says the FRA underestimated that budget by nearly $1 billion. It also notes that the difference between what contractors request and what CHSRA ultimately pays is often substantial. Further, the Authority has implemented a raft of changes, both fiscal and managerial, to mitigate these risks. None of that progress is acknowledged in the FRA’s findings.

“The FRA is...wrong to rely on my statement that, absent changes, deficiencies in the current approaches to funding and contract procurement will continue to cause schedule risk and contractor delays,” Choudri wrote. “The FRA Report fails to acknowledge that CHSRA has made and is continuing to make changes to increase funding, increase efficiencies and mitigate schedule risk.”

8. Ridership Modeling Is Current and Peer Reviewed

Perhaps the most curious element of the FRA’s critique is its reliance on obsolete studies to question CHSRA’s ridership forecasts. It cites a 2010 UC Berkeley report and a 2008 ridership figure — neither of which are tied to the current forecast methods using Steer Davis Gleave Group’s California Rail Ridership Model (CRRM), which produced an updated assessment as part of the 2023 Fed-State Partnership application. That model was submitted as a grant deliverable, reviewed by FRA, and, crucially, received no objections at the time. CHSRA also calls out FRA for misattributing criticism to the state’s Inspector General, whose office has explicitly denied making such conclusions: OIG “has never concluded or otherwise noted anything related to the information the FRA attributes to our office in [that] statement.”

9. Capacity to Deliver Has Already Been Verified

The final FRA claim — that CHSRA lacks the capacity to deliver — is perhaps the most baffling, given the FRA’s own recent approval of the Project Management Plan just three months earlier. The Authority notes that this plan was developed with FRA guidance and defines precisely how CHSRA will meet Federal obligations for delivery, safety, and accountability. The FRA now questions that capacity based on issues — such as negotiating with host railroads and following Proposition 1A mandates — that have existed since 2009. To CHSRA, that amounts to moving the goalposts mid-game. “Information that FRA had when it chose to enter into the Cooperative Agreements” – in 2009! – “cannot now be a basis for termination of those agreements,” CHSRA writes. I have to agree.

In our view, the political motivations behind FRA’s report are laid bare here. The language in the Federal report — referring to taxpayers being “conned” and promises being “illusory” — leans more rhetorical than regulatory. It suggests that hostility to high-speed rail, and perhaps to California’s leadership, is driving the narrative, not any new factual development. “There have been no meaningful changes in the past eight months that justify FRA’s dramatic about-face,” Choudri dryly notes.

Indeed, the most important document the FRA’s report fails to engage is its own Monitoring Report from October 2024, which found no cause for concern. In my mind that raises serious questions about the timing, objectivity, and legitimacy of the new Federal posture.

With construction on 119 miles of guideway underway, more than 50 major structures completed, and tens of thousands of jobs already created, California’s high-speed rail project is well past the drawing board. As I noted in our letter this week to the legislators, California’s high-speed rail investment has already returned nearly 70% above what the state has spent—generating $22 billion in economic activity from the $13 billion invested to date. That’s a return of $1.69 for every public dollar spent, even before a single passenger boards a train, creating thousands of good-paying jobs, especially in underserved Central Valley communities. Whether it remains on track may now depend less on engineering or finance and more on whether Washington is willing to stick to its word.