February 19, 2019 / 11:10 PM / 2 months ago

UPDATE 1-U.S. agency to cancel $929 mln in California high-speed rail funds

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Feb 19 (Reuters) - The U.S. Transportation Department said on Tuesday it will cancel $929 million in federal grant 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.

The department’s Federal Railroad Administration said in a letter that the state had “failed to make reasonable progress” and cited Governor Gavin Newsom’s announcement last week that the state would dramatically scale back the project.

The announcement comes the same day U.S. President Donald Trump repeatedly criticized the project in a series of tweets.

Newsom said last week the state would 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. (Reporting by David Shepardson Editing by Phil Berlowitz)

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