SEPTA announced it is pausing the King of Prussia Rail project following further review of rising costs, which have been exacerbated by inflation and high-interest rates, according to the agency's news release. 

The project is not recommended for federal New Starts funding in Fiscal Year 2024, and SEPTA will use resources that had been allocated for KOP Rail to bolster essential infrastructure work.

A major factor preventing KOP Rail from advancing is the lack of flexibility in SEPTA’s capital budget. In discussions this week, the Federal Transit Administration raised concerns about whether SEPTA could fund its share of the project, which would include any cost overruns.

SEPTA’s capital budget is constrained compared to peer transit agencies that have more state and local funding available. SEPTA added that it would not jeopardize other critical projects, such as the Market-Frankford Line fleet replacement, Trolley Modernization, or station accessibility improvements, to advance an expansion project.

“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,” said Leslie S. Richards, SEPTA GM/CEO. “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 each year of delay, the cost of KOP Rail increases by approximately $100 million. As inflation and higher interest rates have set in, those numbers accelerated further. From August 2020 to August 2022, the project estimate increased from $2.08 billion to $2.6 billion. The estimate now stands at $3.02 billion.

The pause halts all activities on KOP Rail. A contract approved last month for the final design was not executed by SEPTA. The Authority will provide details on how funds allocated for KOP Rail will be used when the proposed capital budget and the long-term program are released in April.

“We are disappointed. King of Prussia Rail would have delivered real benefits to our city and region by providing reliable public transportation connecting our three largest employment hubs in Center City, University City, and King of Prussia. It would have eased congestion on area roadways and reduced air pollution,” Richards said. “We greatly appreciate all the hard work that our staff has put into this initiative, and we are grateful for the support of those who advocated for the project alongside us.”