Metro and the governments that fund it must find a way to pay for hundreds of millions of dollars worth of urgent repairs to the transit system for the Dulles Rail expansion to receive federal funding, U.S. transportation officials said Wednesday.

The caveat is considered the most serious laid out by the U.S. Department of Transportation in its tentative decision to put the Metro extension back on course for $900 million in federal grants. The decision was a dramatic reversal of the agency’s announcement in January that Dulles Rail’s first 11.6-mile phase would not qualify for the money, which many had considered the project’s death knell.

While Maryland and the District of Columbia have agreed to match a $50 million annual contribution should Congress approve dedicated Metro funding, Virginia’s contribution to Metro dried up earlier this year after a state Supreme Court ruling gutted the state’s 2007 transportation funding package.

Gov. Tim Kaine said Wednesday a new set of fees and taxes he plans to propose in coming days will include funding for Metro. It could mean that the money is thrust into a battle between Kaine and Republican lawmakers over how to reverse the state’s mounting transportation crisis.

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“We need to find it ... it is very critical that we find the dollars for Metro,” Kaine said in a conference call with reporters.

Metro must incorporate $489 million worth of immediate unfunded needs into its capital-improvement plan and commit funding for the initial year of the plan, U.S. Transportation Secretary Mary Peters wrote in a letter Wednesday to Kaine.

Federal Transit Administrator James Simpson said he expects to see a plan from Maryland, Virginia and the District over the next few months on how to pay for the needs.

The repairs, which Metro officials outlined in detail in March, include replacing thousands of worn track fasteners, fixing crumbling train platforms and improving railcar safety.

Metro General Manager John Catoe said Wednesday he has drafted a proposal for funding $250 million of the most urgent projects without asking for additional money from the jurisdictions. He will present the proposal, which includes postponing some planned but less urgent projects, to Metro’s board of directors May 15.

“That said, there are some needs in the future,” Catoe said. “I can just tell you that all three secretaries of transportation, both governors and the mayor are aware of this, and at some point [Metro’s board of directors] will be involved in it. We need to map out a strategy of how to fix this. Right now, this is no secret, there is no answer today.”

Project managers also must create a $200 million “rainy day” capital reserve to pay for potential overruns, keep the rail from slipping too far off cost and schedule and establish a single manager to oversee the construction, according to the U.S. Department of Transportation.

wflook@dcexaminer.com