(Bloomberg) -- The war between California and the Trump administration has escalated, but in the matter of high-speed rail, there’s an opportunity for compromise.
In May, Trump’s Federal Railroad Administration said it will cancel a $929 million grant to California’s high-speed rail project, saying it failed to comply with requirements. Initially conceived as connecting San Francisco and Los Angeles with a bullet 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 $79 billion.
The state filed suit to challenge the decision. In the meantime, it has continued to sell bonds to finance the project, which first-term Governor Gavin Newsom had said in February “would cost too much and take too long” as originally planned. Instead, he has directed the focus to finishing roughly 170 miles of track already under construction in the state’s agricultural region.
State and federal officials will meet in a settlement conference on this matter in January 2020, according to documents circulated to investors ahead of a sale of $1.13 billion of various purpose California bonds on October 16. That could lead to a resolution outside of trial.
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