Last month, the Federal Transit Administration announced the second round of grant recipients from its Rail Vehicle Replacement Program (RVRP). Unlike most grant programs however, which give away money in annual installments, the first two rounds of this program have committed almost all of the $1.5 billion that the Infrastructure Investment and Jobs Act (IIJA) provided for this program.

The announcements on February 21 promise to provide $631 million in federal funding to replace 302 aging transit railcars in three metropolitan areas:

• Chicago, IL: The Commuter Rail Division of the Regional Transportation Authority (METRA) will receive $100 million to buy 50 modern, multi-level railcars that will feature new passenger safety, accessibility, and rider comfort amenities to replace older railcars that have been in service for more than 40 years.
• Baltimore, MD: The Maryland Department of Transportation Maryland Transit Administration (MDOT MTA) will receive approximately $214 million to buy 52 new light rail vehicles to replace older vehicles that have been in service for more than 25 years.
• Philadelphia, PA: The Southeastern Pennsylvania Transportation Authority (SEPTA) will receive approximately $317 million to buy up to 200 new rail cars to replace older rail cars that have been in service for nearly 25 years, operating along the Market Frankford Line (the east-west Blue Line), the most heavily used line in SEPTA’s system.

As shown in the table below, the first round of RVRP grant announcements, in May 2023, promised all of the fiscal 2022 and 2023 funding provided by the IIJA as well as one-third of the fiscal 2024 money. Last month’s second round promised the remainder of the 2024 money, all of the fiscal 2025 money, and almost half of the fiscal 2026 funding. Only $166 million of the $1.5 billion program is left for any future rounds (or future Administrations) to give away.

Some metro area funding was confined to one fiscal year, while other areas had their grant award split over multiple years.

The program provides up to 50 percent of the cost of replacing each railcar. With the optional additional contributions from other federal aid programs (especially a transit agency’s §5307 urbanized area formula apportionment), the total federal share of a railcar’s replacement is capped at 80 percent.

FTA has not made the specifics of each grant agreement available, so we don’t know precisely how much each agency is paying for its new railcars, but the RVRP contribution ranges from a high of $4.1 million per railcar (St. Louis, Baltimore) to a low of as little as $667 thousand per car (Chicago CTA) if the entire 300-car order is filled.

In all, the first two tranches of grant announcements under this program will replace up to 770 railcars.