The bipartisan infrastructure bill has a lot of local governments and transit agencies dreaming big, but SEPTA's biggest dream has been deferred.

The Southeastern Pennsylvania Transportation Authority's proposal to build a high-speed rail extension in King of Prussia was denied federal funding, leaving the project on indefinite pause, SEPTA announced Friday.

SEPTA had applied for a New Starts grant with the Federal Transit Administration, part of the Infrastructure Investment and Jobs Act signed in 2021, to cover 60% of an estimated $3B in project costs.

SEPTA's grant application was denied, in part, because the FTA "raised concerns about whether SEPTA could fund its share of the project, which would include any cost overruns," the announcement stated.

The current cost estimate for the proposal, which called for a 4-mile spur of the Norristown High Speed Line with five stations, is $3.02B, a $400M increase from SEPTA's August estimate and $1B more than an estimate from August 2020. Inflation and the resulting increases in interest rates figured to keep driving the cost upward, and at an accelerating rate, SEPTA said in its announcement.

A central issue to SEPTA's funding issue is its capital budget, as the KOP rail project had failed to secure contributions from the commonwealth of Pennsylvania, Montgomery County or any individual townships that stood to benefit. Over $300M that had been earmarked for the project in fiscal year 2023, including a $125M contract awarded in February for the final design phase, will now be directed to other uses.

“SEPTA’s capital budget has been underfunded for decades. This has left the Authority with significantly fewer resources than peer agencies to pursue system expansion while also addressing critical infrastructure needs,” SEPTA General Manager and CEO Leslie S. Richards said in a statement. “With the funding we have currently, SEPTA must prioritize essential infrastructure work and safety and security improvements to maximize the reliability and effectiveness of our aging system.”

With money freed up to advance long-promised improvements such as new cars for the Market-Frankford Line subway and its trolley lines, SEPTA now faces renewed calls for the construction of a Roosevelt Boulevard subway line. For years a pet project among transit advocates and urbanists, the line received support from multiple candidates in Philly's mayoral race at a March 14 candidate forum, WHYY reports.

The King of Prussia rail extension had been criticized by some Philadelphians as too suburb-focused, with an estimated daily ridership 10 times smaller than a Roosevelt Boulevard subway, Billy Penn reports.

King of Prussia has been one of the most desirable submarkets for multiple forms of commercial real estate in the past few years, a distinction that had little to do with the promise of a rail connection.