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Investor: Commuter line on track

Pittsburgh-area rail project will need millions in U.S. and state money. Developer says he'll get it.

As plans to start an Allegheny Valley commuter train proceed, the developer who proposed it doesn't have any assurance he can overcome serious financing obstacles.

The proposed rail line from Lower Burrell, about 20 miles northeast of downtown Pittsburgh, to the city's Strip District will need major government subsidies before it's built and after it's running.

The private investor planning to finance the commuter line, whose cost has been estimated at $350 million, will have to provide money until the federal government dedicates millions in grants to the project. Many projects throughout the country seek to tap the federal program the developers want to use, and demand is outstripping supply.

Once built, the rail line likely will need millions of dollars in operating subsidies from the state. There currently is no funding stream for it.

"There are legitimate questions you can't overlook," said Robert Ardolino, the developer pushing to build the line. "But I'm willing to face those questions head on."

Ardolino said he was convinced everything would fall into place so commuters would have another travel option within a few years. Construction could begin in 2013, he suggested.

Ardolino expects a majority of government assistance in the form of $180 million from the Federal Transit Administration's New Starts program. He said he also expected to get millions from other federal agencies, such as the Federal Railroad Administration.

Though transit administration officials are aware of Ardolino's plans, they say they have not received a formal application for a grant. They cautioned that the money available through New Starts was highly sought after and that the pot had dwindled.

To cover long-term operating costs, the rail line likely would need to be subsidized, as is common for public transportation systems. Ardolino said the train would need a subsidy from the state of 88 cents per passenger mile, less than the national average of $1.42. At the rate Ardolino suggested, the state's subsidy could range from $20 to $23 for a trip from Lower Burrell to Pittsburgh.

The state subsidizes operations of the Port Authority of Allegheny County, including its light rail - the T - in Pittsburgh.

Much of the line for the commuter rail already exists and is used as a freight corridor by the Allegheny Valley Railroad. But running commuter service from Lower Burrell to Pittsburgh would require construction at both ends. Extending the tracks from their current endpoint in the Strip District would be challenging because the proposal would have to clear environmental, financial, and political hurdles.

State Rep. Frank Dermody (D., Oakmont) contended the state could be in a position to subsidize the project, saying, "It would be part of an overhaul of the transportation funding system in the commonwealth."

Dermody criticized Gov. Corbett's administration for failing to immediately address the state's transportation needs, which he described as "a $3 billion problem" of failing infrastructure and mass-transit systems.

Corbett has said he won't rush to offer a long-term plan to increase transportation funding. An advisory commission he appointed presented him with a plan in August that it said would increase transportation funding up to $2.7 billion annually within five years. The governor has not implemented the recommendations or alternatives.

A spokesman in Corbett's office deferred comment about funding the proposed commuter train to the Pennsylvania Department of Transportation.

"Once we had an application or proposal, we would have to weigh that against other requests," PennDot spokeswoman Erin Waters said. "Without increased revenue for transportation, it would be difficult to envision being able to give capital to a new project."