Vermont Transportation Agency officials say a federal grant application that would have been used to upgrade the rails in an 11-mile stretch between Rutland and Burlington was rejected by federal transportation officials.
The Transportation Agency's Chris Cole says they haven't been told why the grant for almost $10 million was rejected.
He says it's a setback to efforts to restore passenger rail service between Burlington and Rutland, but it's not the end.
Cole says if the federal program is around next year they could apply again. And there are other potential sources of funding the state can explore.
Work has either been completed or is being planned for the rest of the line.
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