California's High-Speed Rail Authority quietly approved a $537 million settlement payout to contractor Dragados-Flatiron Joint Venture on Jan. 21 — the largest single payout in the project's history. The settlement resolves disputes over hundreds of change order requests tied to work delays, effectively increasing the contractor's original $1.2 billion contract by nearly half.

That's not a cost overrun buried in some future projection. That's a check the state already cut.

Meanwhile, Governor Gavin Newsom visited the Central Valley last week to celebrate what he called a milestone for the project, the New York Post reported. He did not mention the settlement. What he and Assemblymember Lori Wilson have been working on instead is an effort to allow the rail project's Inspector General to withhold reports from the public if they describe or reveal "weaknesses" about the project.

Build a train that doesn't work. Pay half a billion dollars because you can't manage the contract. Then change the rules so no one can read the audit. That's the sequence.

597 Change Orders and Counting

Dragados-Flatiron Joint Venture oversees a 65-mile route within Fresno, Tulare, and Kings counties. Since the project began, the contractor submitted 597 change orders — requests to revise the terms of their original contract. The settlement, according to the High-Speed Rail Authority, resolved those outstanding claims.

A spokesperson for the authority framed it as progress:

"It resolved outstanding claims and, importantly, ties payment to achieving defined performance milestones and completing the work necessary to accelerate track-laying this year."

Ties payment to milestones. As opposed to what they were doing before — paying without milestones? Nearly 600 change orders on a single contract suggest the original scope was either incompetently drafted or deliberately underscoped to get the project moving. Either way, taxpayers absorbed the difference.

Critics have pegged the project's cost at roughly $215 million per mile. For context, the project has dragged on for years past its initial launch date and has only now entered a "track-laying phase" for a limited Central Valley segment. Not Los Angeles to San Francisco. Not a functional intercity corridor. A stretch of track in the agricultural heart of the state, where a bridge photographed in August 2021 still had no tracks on it.

A Billion a Year Through 2045

Last year, Newsom and state legislators committed $1 billion annually through 2045 to the high-speed rail project through California's cap-and-trade program. That's a two-decade funding pipeline drawn from a program ostensibly designed to reduce carbon emissions — redirected to a construction project that has yet to carry a single passenger.

Assemblymember Alexandra Macedo didn't mince words about the math:

"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."

Read that again. The state didn't pay $537 million because the contractor failed. It paid because the state failed to comply with its own contract. The delays were California's fault, and the contractor billed accordingly.

Macedo went further in a text message:

"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."

She's raising the question that Sacramento refuses to confront: at what point does a project become so over-budget and behind schedule that continuing to fund it is itself the waste?

Transparency in Name Only

When asked about the push to let the Inspector General suppress unflattering reports, a Newsom spokesperson offered this:

"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."

That's a remarkably elastic definition. "Information that could harm the interests of the state" could mean anything from a genuine security vulnerability to a damning cost analysis that embarrasses the governor's office. When a project is hemorrhaging public money at this rate, the public's interest is in knowing the weaknesses — not in having them quietly filed away.

The rail authority defended its record, saying "the program is being delivered in full public view." A $537 million settlement approved on the same timeline as the governor's victory-lap press conference — where the settlement went unmentioned — is a strange definition of full public view.

The Pattern Is the Point

California’s high-speed rail project has turned into a clear example of how government megaprojects consume public money. It begins with ambitious promises of transformative infrastructure offered at a price that sounds achievable, followed by contracts that fall apart once real-world conditions set in and lead to costly settlements. Long-term funding commitments are secured before the public can fully judge the results, transparency tightens as the financial picture worsens, and officials close the loop with a press conference promoting the latest milestone as a success.

Every element of that cycle is present here. The original contract was $1.2 billion. It's now $1.2 billion plus $537 million for 65 miles of route. The state has committed a billion dollars a year for two more decades. And the mechanism for independent oversight is being weakened at precisely the moment the spending is accelerating.

This isn't a high-speed rail project anymore. It's a permanent construction program with no scheduled arrival.

The authority says its priority is "converting today's construction progress into a track-ready corridor as quickly as possible." Twenty-plus years in, that sentence should alarm rather than reassure. Somewhere between the ceremonial shovels and the half-billion-dollar settlements, the question stopped being whether the train would work and became whether anyone in Sacramento has the political courage to say it won't.