The Federal Transit Administration yesterday gave final design approval and $158.7 million of federal funding to the $5 billion Dulles Metrorail extension project, citing a "substantially improved" proposal, FTA officials said.

But the rest of the $900 million of federal funds that Virginia officials say are needed for the project remain in limbo over several concerns, including whether the project can be completed on time and within the budget, FTA administrator James S. Simpson said yesterday in a conference call.

The Transit Administration officially committed to providing the $158.7 million for the project in a letter to Congress that said the funds should be used for the completion of a financial plan, construction plans, detailed engineering specifications and cost estimates, and other technical requirements, according to Simpson.

The funding marked what project officials hope will be the beginning of a turnaround for the federal government. FTA officials in late-January told Gov. Tim Kaine that the project did not meet federal funding cost-benefit requirements and said they could not provide the nearly $1 billion for construction without drastic changes in the management of the project, which is being run by the Metropolitan Washington Airports Authority.

"We have sat back here for the last three months and worked on this," Simpson said. "I can tell you, this is all down to a strict calculus. We're still not there yet. We're not at a full-funding grant agreement."

However, he added: "It's not the same project that was proposed in January. It's really improved."

Simpson said he expects that an agreement can be reached in six to nine months for final full-funding approval, pending the projects' weaknesses are improved.

The trouble spots include the MWAA's ability to ensure that: sufficient funds are available to cover risks; it can demonstrate that the project will proceed on schedule and on budget; and that the state-of-good-repair needs for the entire Metro system will be addressed.

"Gov. Tim Kaine deserves much credit for his overwhelming commitment to this proposal and for spearheading the changes necessary to move it forward," U.S. Secretary of Transportation Mary S. Peters said in a statement. "Today's action is the first step toward final approval, but it should by no means be seen as a guarantee of full funding."

The MWAA is managing the 23-mile subway extension project under an agreement with Virginia and had planned to issue about $2 billion of bonds to finance the project. The bonds would be backed by tolls from the Dulles Toll Road, which the authority controls. The MWAA operates Dulles International Airport and Ronald Reagan Washington National Airport, but has never headed a rail project.

The FTA is expected to provide $900 million for the estimated $2.6 billion first phase of the project - an 11-mile stretch between the West Falls Church Metrorail station and a new station at Wiehle Avenue in Reston, Va. The second phase is still estimated at about $2.5 billion, but that most likely will be revised, Virginia deputy secretary of transportation, Barbara Reese said during a conference call with reporters yesterday.

During the same call, Kaine said he felt that the project has been dealt with in a "very fair" way. He noted that it is "very critical that we find the dollars for Metro. Of the various concerns that are out there, I would say the funding of Metro is the most important."

"I look forward to continuing our productive working relationship on this project and the others in the future," the governor said in an earlier statement. The joint work of our professional staff and partners since February will serve as a model of how complex transportation projects must be developed and evaluated."


Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.