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.
"We're evaluating what our options are to extend that date. We might not have any good options," Murphy said. "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.
"We don't know what the reasons are for this decision," Murphy said. "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.
On Feb. 3, House Democrats from California also sent a letter to Chao, but in support of the Caltrain grant.
Today, U.S. Congresswoman Jackie Speier issued a statement urging President Donald Trump to intervene to save the funding.
"Caltrain is the backbone of the Silicon Valley transportation system and this decision to delay would threaten to break the backbone of this economy," Speier said. "To make America great again, the president should order that this grant be made and then join us to turn dirt as 9,600 good American jobs related to this project-spread over thirteen states-are created."
Jim Wunderman, president of the Bay Area Council, a business group that regularly weighs in on public policy, also decried the FTA's decision.
"This unfortunate decision jeopardizes an important shovel-ready project that is critical not just to our region, but to the state and the nation," Wunderman said.