By David Shepardson
WASHINGTON, Dec 26 (Reuters) - California has dropped a lawsuit challenging the decision by the administration of President Donald Trump to cancel more than $4 billion in federal grants for the state's high-speed rail project, the state said late on Friday.
The California High-Speed Rail Authority, which filed the suit in July, said the decision to abandon it on Tuesday reflected the state's "assessment that the federal government is not a reliable, constructive, or trustworthy
partner in advancing high-speed rail in California."
The agency said it plans to move forward without federal funding, adding that only 18% of program expenditures for the long-delayed project have come from federal funds. A judge this month rejected a bid to dismiss the lawsuit.
The U.S. Transportation Department and White House did not immediately respond to requests for comment.
LATEST HEADACHE FOR PROJECT PLAGUED BY DELAY, COST OVERRUNS
Governor Gavin Newsom, a Democrat, said in July that termination of the grants by the administration of Republican President Donald Trump amounted to "petty, political retribution, motivated by President Trump's personal animus toward California and the high-speed rail project, not the facts on the ground."
The funding cuts are the latest hurdle in the 16-year effort to link Los Angeles and San Francisco by a three-hour train ride, a project that would deliver the fastest passenger rail service in the United States.
Originally planned for completion by 2020 at a cost of $33 billion, the project is now forecast to cost between $89 billion and $128 billion, with service now expected to start by 2033.
The rail system, whose first bond issue was approved by California voters in 2008, has built more than 50 major railway structures, including bridges, overpasses, undercrossings and viaducts, and completed nearly 80 miles (130 km) of guideway for the project.
The Transportation Department in August canceled another $175 million for four projects that are part of the high-speed rail program, following the cancellation of $4 billion in federal grants.
The California agency said this week it was beginning a process to attract private investors and developers by summer 2026. The agency said on Friday the loss of federal funding will not derail the project and construction, adding it was making progress.
"Rather than continuing to spend time and money challenging the termination, the state is moving forward without them," the agency said, noting legislation signed in September secures $1 billion for the program annually through 2045.
The Federal Railroad Administration issued a 315-page report in June finding the project was plagued by missed deadlines, budget shortfalls and questionable ridership projections.
During his first term, Trump revoked $929 million in federal grants, a move challenged by the state, leading to a settlement in 2021 under Democratic President Joe Biden restoring the full amount.
(Reporting by David Shepardson in Washington)
