Dive Brief:

• The future of Minnesota's $1.79 billion, 14.5-mile Southwest Light Rail project is unclear after the state Legislature failed to pass $135 million in funding, according to the Star Tribune.
• The state's 10% financial participation was necessary for the project to receive a much-needed $895 million in matching funds from the federal government — a sum that rail officials at the Minneapolis Metropolitan Council are now scrambling to replace.
• The only current foreseeable alternative is special funding, granted at an optional legislative session, which would pay for a variety of public works and transportation projects. However, Minnesota Gov. Mark Dayton said he wasn't sure about the future of that initiative.

Dive Insight

Council Chairman Adam Duininck told the Star Tribune in a previous interview that there was no "Plan B" for financing, and even though the governor said he is not sure about his initiative for public works projects, trade associations and rail advocates are asking him to call a special session. President Barack Obama made a recommendation for the project to be allocated $125 million as part of his fiscal 2017 budget, but that has not yet been approved. Funding is critical for the Council, as it has already spent $130 million on planning and design.

One suggestion to make up the funding gap involved making the Hennepin County Regional Railroad Authority pay an additional amount into the project, but it is already contributing $165.3 million. The MCC was expected to begin construction on the system in 2017 and start service in 2020.

Looking west from Minnesota can reveal what might happen if a state doesn't have all its ducks in a row before embarking on a large infrastructure project. The California High Speed Rail Authority and its bullet train project did not have its plans fully fleshed out before it began construction, and it has been through a series of route changes, delays and cost overruns. It still has not acquired 100% of the land it needs for its route from Southern California to Northern California.

The Los Angeles Times has also been keeping an eye on the bullet train project and published several articles suggesting that the authority was not upfront with state lawmakers about how much the project would cost when it was going through initial approval. This ongoing scrutiny has spurred special legislative hearings into the rail's operation.

Involving a government agency has become such a painful and inconvenient process that more rail planners are seeking private money so that they don't have to deal with a public entity. Rail developers in several states, Reuters reported, are looking to Japanese and Chinese manufacturers, who have seen a slowdown in their own countries, as possible investors.