California High-Speed Rail Project Pays Record $537M Settlement

Governor Newsom backs bill to hide project reports as costs spiral

Published on Feb. 11, 2026

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California's high-speed rail project has agreed to a record $537.3 million settlement with a construction firm overseeing a 65-mile stretch of track, the largest change order payout in the project's history. This comes as Governor Gavin Newsom was touting the project's 'track-laying phase' as a milestone, while simultaneously backing legislation that would allow the project's Inspector General to withhold reports from the public that reveal 'weaknesses' about the troubled venture.

Why it matters

The high-speed rail project has been plagued by years of delays, cost overruns, and mismanagement, with the latest settlement highlighting the state's failure to hold up its end of the contract. Critics argue the billions spent on this project could be better used to improve infrastructure and services that directly benefit Central Valley residents. The push to hide oversight reports also raises concerns about transparency and accountability for taxpayer funds.

The details

The $537.3 million settlement was approved unanimously by the California High-Speed Rail Authority's board on January 21, resolving hundreds of change order requests tied to work delays caused by the state. The original $1.2 billion contract with Dragados-Flatiron Joint Venture has now increased by nearly 50%. Meanwhile, Governor Newsom touted the project's 'track-laying phase' as a milestone, without mentioning the record-setting payout.

  • The California High-Speed Rail Authority's board approved the $537.3 million settlement on January 21, 2026.
  • Governor Newsom made remarks about the project's 'track-laying phase' as a milestone in the Central Valley the same week the settlement was approved.

The players

California High-Speed Rail Authority

The state agency overseeing the construction of California's high-speed rail project.

Dragados-Flatiron Joint Venture

The construction firm that was awarded a $1.2 billion contract to oversee a 65-mile stretch of the high-speed rail project in Fresno, Tulare, and Kings counties.

Governor Gavin Newsom

The Governor of California who has continued to support the high-speed rail project despite its escalating costs and delays.

Alexandra Macedo

Republican Assemblymember representing the counties where the high-speed rail construction is taking place.

Lori Wilson

Democratic Assemblymember who is advancing legislation with Governor Newsom to allow the high-speed rail project's Inspector General to withhold reports from the public.

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What they’re saying

“I think it's interesting that the governor left out of his press conference [last week] that perhaps one of the largest settlements ever, $500 million, was paid to a construction company because we failed to comply with our contract — delay related.”

— Alexandra Macedo, Republican Assemblymember (New York Post)

“Taxpayers continue to be swindled. Out of control costs, delays and mismanagement, it is time for the governor to redirect the billion dollars he committed to the high-speed FAIL to pay for projects that actually improve people's lives in the Central Valley.”

— Alexandra Macedo, Republican Assemblymember (New York Post)

“The limited instances in which something would be deemed confidential would include information security and physical security — which could be exploited by individuals attempting to harm the interests of the state or inappropriately benefit from the project.”

— Newsom spokesperson (New York Post)

What’s next

The judge overseeing the high-speed rail project will decide on Tuesday whether to allow the Inspector General to withhold reports from the public as proposed in the new legislation backed by Governor Newsom.

The takeaway

California's high-speed rail project has become a cautionary tale of government mismanagement, with ballooning costs, lengthy delays, and a lack of transparency that has eroded public trust. The record-setting settlement and efforts to conceal oversight reports suggest the project's priorities lie more with saving face than serving taxpayers in the Central Valley.