(Reuters) - The U.S. Transportation Department said on Tuesday it will cancel $929 million in federal funds awarded by the Obama administration for a California high-speed rail project and is "actively exploring every legal option" to seek the return of $2.5 billion the state has already received.California Governor Gavin Newsom said last week the state will dramatically scale back a planned $77.3 billion high-speed rail project that has faced cost hikes, delays and management concerns, but will finish a smaller section of the line.
The Transportation Department’s Federal Railroad Administration said in a letter it wanted to halt funding because the state had "failed to make reasonable progress." It cited Newsom’s announcement to scale back the project.
Newsom, in a statement, linked the Trump administration action to California leading 15 other states in challenging what he called "the President’s farcical ’national emergency,’" to obtain funds for building a wall along the U.S.-Mexico border.
"This is California’s money, and we are going to fight for it," Newsom said of the rail funds.
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