Major Caltrain upgrade at risk over federal funding

A massive Caltrain project to convert the commuter train system from diesel fuel to electric power was derailed Saturday when the Federal Transit Administration decided to hold up a nearly $650 million construction grant.

The FTA said that it will defer a final decision about the money until the Trump Administration develops its 2018 fiscal year budget.

That might effectively kill the Caltrain project because the transit agency needs to meet a March 1 deadline to issue a Notice to Proceed to its contractors, said Caltrain spokesman Seamus Murphy.

Murphy said:

“We’re evaluating what our options are to extend that date. We might not have any good options. A decision to defer the decision on the grant could have the same result as rejecting the grant itself.”

The entire project price tag is $1.98 billion, with $1.3 billion already committed from local, state and regional sources, Murphy said.

The final $647 million was to be from the FTA’s Core Capacity grant program and the project was already vetted and approved by the federal agency’s staff after a two-year evaluation process.

The FTA’s decision comes on the heals of a letter critical of the funding sent to U.S. Transportation Secretary Elaine Chao by the 14 members of California’s Republican caucus, including House Majority Leader Kevin McCarthy, R-Bakersfield.

The letter, sent Jan. 24, urges Chao to reconsider the grant on the basis that it is tied up with California’s high-speed rail project, which the letter says ballooned in price from $33 billion to over $100 billion and is already the beneficiary of roughly $3.55 billion in federal funds.

The letter says providing any further federal money to the project would be “an irresponsible use of taxpayer dollars” until there is “a full and complete audit of the project and its finances can be conducted.” The Caltrain project would electrify the tracks between San Francisco and San Jose for commuter trains but it would also serve as the high-speed rail corridor along the Peninsula.

The FTA, however, gave no reason for its decision to defer a final decision on the $647 million grant.

Murphy said:

“We don’t know what the reasons are for this decision. They’ve held up this grant and certainly we’re the canary in the coal mine here.”

Murphy said the Caltrain project would be the first project to ever lose funding after making it so far down the approval process.