(Bloomberg) -- The Trump administration officially canceled $929 million in federal grants earmarked for California’s ambitious high-speed rail project, escalating tensions between the federal government and the most-populous U.S. state.
Federal Railroad Administrator Ronald Batory said in a letter Thursday to Brian Kelly, the chief executive officer of the state agency running the project, that California has failed to show progress and meet requirements under the agreements for the funds.
"It is now clear that California has no foreseeable plans, nor the capability, to pursue that statewide HSR System as originally proposed," Batory wrote.
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, a Democrat who took office in January, said Feb. 12 that the rail project as planned “would cost too much and take too long,” and he would focus on finishing roughly 170 miles of track already under construction in the Central Valley.
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