DOT Announces Funds for Bus Upgrades

May 5, 2010 Updated: October 1, 2015

The U.S. Department of Transportation will make $775 million in discretionary funds available to upgrade buses and bus facilities. (Spencer Platt/Getty Images for Fortune Magazine)
The U.S. Department of Transportation will make $775 million in discretionary funds available to upgrade buses and bus facilities. (Spencer Platt/Getty Images for Fortune Magazine)
The U.S. Department of Transportation (DOT) announced Sunday that it will make $775 million in discretionary funds available to transportation service providers to upgrade buses and bus facilities.

The funds will go to eligible parties based on merit determined by the Federal Transportation Administration (FTA).

The funds are part of DOT’s “State of Good Repair” (SGR) grants initiative. The money is to “replace, rehabilitate, and purchase buses and related equipment and to construct and rehabilitate bus related facilities, including programs of bus, and bus related projects,” according to the available funds notice in Tuesday’s Federal Register.

“These funds will get us started, but we still have a long way to go,” said Transportation Secretary Ray LaHood in a DOT press release.

The FTA estimated a $50 billion backlog (2008 dollars), for seven of the nation’s largest bus and rail providers in its 2009 Rail Modernization Study. The study found that a third of these companies' transportation assets were in “marginal or poor condition.”

The limited state and local resources are causing transportation providers to fall behind in repairing and replacing buses and trains, according to the FTA. The agency said 8,000 buses need to be replaced annually.

The FTA has proposed an additional $2.9 billion for new a Bus and Rail State of Good Repair fund for the fiscal year 2011 budget. The $775 billion available now is the first implementation of the grants.

Eligible recipients for the funds include state and local governments, public agencies, and private companies that provide public transit as well as Indian tribes. Sub-recipients eligible for funds include "public agencies, private nonprofit organizations, and private providers engaged in public transportation,” according to Tuesday’s federal register.

According to the DOT’s press release, the FTA will review project proposals submitted electronically by June 18. Awards are expected late in summer 2010.