UPDATE 2-Biden restores $929 mln for California high speed rail withheld by Trump

(Adds Pelosi statement on rail reauthorization bill in paragraph 6)

June 11 (Reuters) - The Biden administration late on Thursday restored a $929 million grant for California's high speed rail that former president Donald Trump revoked in 2019.

The parties, which also include the California High-Speed Rail Authority and the U.S. Transportation Department, agreed to restore the grant within three days, according to the settlement agreement https://hsr.ca.gov/wp-content/uploads/2021/06/California-v.-DOT-Settlement-Agreement-Final-May-26.pdf.

Talks began in March, months after Biden became president, to settle the suit filed in 2019 after Trump had pulled funding for a high-speed train project in the state hobbled by extensive delays and rising costs. Trump had repeatedly clashed as president with California on a number of fronts

California's lawsuit claimed the Transportation Department lacked legal authority to withhold the $929 million the Obama administration allocated a decade ago but had remained untapped.

"The Biden Administration's restoration of nearly $1 billion for California's high-speed rail is great news for our state and our nation," U.S. House of Representatives Speaker Nancy Pelosi, a Democrat from California, said in a statement https://www.speaker.gov/newsroom/61021-4 reacting to the agreement.

The funding restoration occurs as the Biden administration tries to hammer out an infrastructure spending agreement with lawmakers.

"The announcement also comes as House Democrats make progress under Chairman Peter DeFazio on a robust surface and rail reauthorization bill, which includes strong funding for intercity and high-speed passenger rail," Pelosi said.

The U.S. Department of Transport did not immediately respond to a request for comment.

While Trump ridiculed the California project calling it a "disaster," Biden strongly supports high-speed rail and has vowed to ensure the United States "has the cleanest, safest, and fastest rail system in the world." Biden wants dramatically increasing funding for passenger rail networks.

California's system, which is billed by the state as the first U.S. high speed rail project, is estimated to cost from $69 billion to $99.8 billion and aims to be completed in the 2030s.

California Governor Gavin Newsom said https://www.gov.ca.gov/2021/06/10/governor-newsom-statement-on-federal-funding-agreement-for-california-high-speed-rail-project the funding restoration will "move the state one step closer to getting trains running in California as soon as possible."

California voters approved the initial $10 billion bond for the project in 2008, and $3.5 billion in federal money was allocated two years later. California previously received $2.5 billion.

California State Treasurer Fiona Ma noted in a letter Monday that the Obama administration had allocated $10.5 billion for high speed rail projections in 2009 and 2010 and that there are still no operational U.S. high-speed rail lines as a result.

"To be clear, a repeat effort that spends billions without getting any new lines operational after another decade will be the death of high-speed rail in America," Ma wrote to Congressional leaders.

"There is simply no way the public will continue to support such an agenda without seeing tangible results."

(Reporting by Derek Francis and Kanishka Singh in Bengaluru and David Shepardson in Washington Editing by Michael Perry and Mark Potter)

06/11/2021 7:05

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