WASHINGTON - A citizens group has dropped a lawsuit aimed at blocking a proposed $5.1 billion, 23-mile subway extension to Washington Dulles International Airport, but the project faces a bigger challenge - whether the Federal Transit Administration will provide $900 million of much-needed funding.

TysonsTunnel.org - a citizens group that wanted more competitive bidding on the project and opposed other aspects of it - on Wednesday dropped the suit it filed Nov. 27 against the U.S. Department of Transportation and the FTA in U.S. District Court in Alexandria, Va. Citing the FTA's decision in late-January to defer from giving the $900 million to the project, the group's president said it was a sign that competitive bidding could occur in the future.

"It appears that FTA and U.S. DOT are making it pretty clear to other transit agencies, and anybody that's applying for public dollars, that they expect fair and open competition to be a part of the deal," said Scott A. Monett, the group's president.

The Metropolitan Washington Airports Authority is managing the subway extension project under an agreement with Virginia, and the agency 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 MWAA controls. The FTA was expected to provide $900 million for the estimated $2.7 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.

But in late-January, FTA officials told Virginia Gov. Tim Kaine that the project did not meet the federal funding cost-benefit requirements and said they could not provide nearly $1 billion for construction without drastic changes in the management of the project.

FTA officials also said then that they had concerns about the MWAA's ability to build a "mega project." The authority operates Dulles International Airport and Ronald Reagan Washington National Airport, but has never headed a rail project.

Neither FTA nor MWAA officials would provide much information about the talks, but Andrew Rountree, deputy chief financial officer of the authority, said the discussions are ongoing and that officials "remain optimistic."

"I'm not sure I can give you any kind of date by which we may hear some ultimate final decision," he said.

FTA spokesman Paul Griffoadded: "We're continuing to review the updated information that [Virginia officials have] provided us."

Kaine submitted a detailed report to the DOT in February addressing the FTA's concerns about the project.

Virginia Secretary of Transportation Pierce Homer also would not speculate as to the status of the talks, which began in early February.

"The airports authority and the FTA are talking on a daily basis, and both parties are making diligent efforts to meet their respective objectives. The commonwealth is guardedly optimistic," Homer said.

And while the MWAA has submitted new information to the FTA, Homer added that "it would be inappropriate for either party to set an arbitrary deadline" as to when the negotiations would be completed.

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.