Backers of expanded rail service that would connect New London to Storrs and points north are anxiously awaiting approval of a $17 million federal grant that would jump-start the upgrading of tracks in preparation for higher local freight- and passenger-train capacity.

Todd O'Donnell, co-owner of New London's Union Station, said U.S. Rep. Joe Courtney, D-2nd District, has been instrumental in supporting a Transportation Investments Generating Economic Recovery grant from the U.S. Department of Transportation. The government plans to release up to $500 million in the TIGER grants this fiscal year for expanded passenger and freight services nationwide, and a Courtney spokesman said he expects the funding announcement to come within the next two weeks.

The grant would provide money for New England Central Railroad to upgrade rails from New London to Palmer, Mass.

"Everyone is hopeful this will go through," O'Donnell said.

The rail improvements eventually would extend to Brattleboro, Vt., if the money is approved. A previous federal grant led to rail upgrades from Brattleboro to the Canadian border.

The project, as conceived by the Central Corridor Rail Coalition that includes officials in the regions to be served, is expected to cost $125 million to $150 million when complete. About $50 million of the cost would be for track upgrades, with another $15 million to $20 million each for new rail stations and new freight cars, O'Donnell said.

The updated tracks would accommodate freight cars that are up to modern standards, rather than the small-capacity cars currently in use in southeastern Connecticut. This would end the need to re-load cargo that comes or leaves from here because the region's tracks can't accommodate higher-capacity cars.

Late last year, officials from New London, Norwich, Windham and Mansfield, along with the Southeastern Connecticut Council of Governments, signed a memorandum of understanding that supported using more than 100 miles of upgraded tracks to boost freight and passenger service in eastern Connecticut.

Stops would run from New London to Mohegan Sun Casino, Norwich, Willimantic, Mansfield, Storrs and Stafford Springs. Other stations along the way would include Palmer, Amherst and Millers Falls in Massachusetts, as well as Brattleboro, Vt.

According to a summary of the project, Palmer, Mass., "is the nexus for all passenger and freight service moving through central New England." Brattleboro "will be the connection for Amtrak service north and serve southern New England skiers and tourists looking to avoid congestion on I-91."

New London and southeastern Connecticut should benefit as well, O'Donnell said, with students from the University of Connecticut and Eastern Connecticut State University being able to travel by rail and tourists gaining new access to the shoreline.

"We're the tourism capital of the state if not New England," O'Donnell said. "It really is not a commuter train."

Backers of the project say passenger service provided by a public-private partnership could be run at significantly lower costs than is typical in the rail transportation business.

But the real economic benefit lies in expanded rail capacity helping communities increase the value of commercial properties and boost the tax rolls, O'Donnell said. Expanded freight services will open up business opportunities along the route for those who would now be able to ship materials through New London's deepwater port or transport their goods to the north, as well as east and west.

O'Donnell said it would take 18 months to complete the project if all the money arrived up front. Having to wait for funding could send that schedule off track, however.

"How long it takes to get the money is the great debate," O'Donnell said.

l.howard@theday.com