By Larry Sandler, Milwaukee Journal Sentinel

A year and a half after the abrupt end of Wisconsin's high-speed rail plan, the federal government has reimbursed the state for the money spent on the project.

That $14.6 million payment could be the last official action in the aborted effort to link Milwaukee and Madison by passenger rail.

But Minnesota officials are trying to keep high-speed rail hopes alive, while Wisconsin officials are wrestling with issues surrounding new trains and other upgrades for Amtrak's Milwaukee-to-Chicago Hiawatha line.

Starting with former Republican Gov. Tommy G. Thompson in the late 1990s, state officials had pushed to extend the Hiawatha to Madison, as a segment of a high-speed Chicago-to-Twin Cities route and as part of a broader plan to connect Midwestern cities with fast, frequent trains. They appeared to succeed in 2010, when former Democratic Gov. Jim Doyle's administration won an $810 million federal grant to build the 110-mph route.

But Republican Scott Walker attacked the project in his gubernatorial campaign, arguing the state should not pay the train's operating costs. After Walker won, the U.S. Department of Transportation yanked the grant and distributed all but $2 million to other states.

By then, however, the Doyle administration had already spent some $9 million of the rail funds and was on the hook for more than $5 million in cancellation fees and other commitments. At the time, Walker said U.S. Transportation Secretary Ray LaHood had assured him the state would be reimbursed for those costs.

Federal officials fulfilled that pledge earlier this month, according to spokesmen for the state and federal transportation departments.

But that didn't end all plans for high-speed rail through this state.

The Minnesota Department of Transportation has been leading the planning for a high-speed route from Chicago to Minneapolis-St. Paul. Planners had expected the extended Hiawatha line would be part of that route, leaving them to focus on the Madison-to-St. Paul segment.

Wisconsin and Minnesota each put up $240,000 for the study's first phase. But then Wisconsin pulled out, with Transportation Secretary Mark Gottlieb saying this state would focus on improving the Hiawatha and the Empire Builder, the other Amtrak line through Wisconsin.

Minnesota finished the first part of the study, calling for gradually phasing in high-speed service by upgrading the Empire Builder's current route between Chicago and the Twin Cities. The Empire Builder stops in Milwaukee and other Wisconsin communities -- but not Madison -- on its daily round trip between Chicago and the Pacific Northwest.

For the next phase of the study, a $600,000 federal grant was to be matched by $300,000 each from Wisconsin and Minnesota. After Wisconsin pulled out, Minnesota increased its share to $600,000 for the study, which is to be completed by late 2013, said Dan Krom, Minnesota passenger rail director.

Separately, Wisconsin and Minnesota have hired Amtrak for a feasibility study of adding a second daily round trip on the Empire Builder segment between Chicago and the Twin Cities, Krom said. That study, to be completed by the end of this year, will examine the capital and operating costs of an expansion, as well as the potential ridership, he said.

Minnesota is paying half the cost of the $50,000 study, matched by $20,000 from Wisconsin and $5,000 from the La Crosse Area Planning Committee, said Krom and Tom Faella, executive director of the planning body. Krom said he saw potential demand for more service, while Faella said another round trip would offer more convenient service for both business travelers and tourists.

The high-speed rail issue also has affected efforts to upgrade service on the Hiawatha, Amtrak's busiest Midwestern route, including:

Talgo trains: Caught in the same politics that entangled high-speed rail, two new trains for the Hiawatha could be mothballed after the state spent $71.8 million on them.

Doyle's administration picked Talgo, a Spanish train manufacturer that set up a plant in Milwaukee, to build two trains for $47.5 million, with an option to order two more trains for the Milwaukee-to-Madison line.

Design changes, spare parts and consulting fees added $10.6 million, plus another $11.7 million to build and equip a temporary maintenance base and $2 million to plan a permanent base. The contract with Talgo called for the company to maintain its own trains in a state-provided maintenance facility.

But Republicans who control the Legislature's Joint Finance Committee balked at the $55 million to $63 million cost of a permanent maintenance base, as well as the $5.8 million-a-year maintenance contract. They rejected funding to continue planning the permanent base, which led Gottlieb to cancel the maintenance contract and declare he could not use the trains.

Now Talgo is threatening litigation, even as it tests the trains it is still obligated to deliver. The $810 million grant would have paid for the temporary and permanent maintenance bases.

Passenger concourse: Funding and design issues have hampered efforts to rebuild the passenger train concourse at Milwaukee's downtown Amtrak-Greyhound station to satisfy federal rules for access to the disabled.

Doyle's administration planned a $20 million renovation that would have been covered by the $810 million grant. Faced with paying half the cost after the loss of the grant, Walker's administration redesigned the job to cut the price by up to $15 million.

But in the meantime, the Federal Railroad Administration imposed more stringent rules on access for the disabled, a move that could force another redesign and push the cost back up. Gottlieb says his agency should decide by fall how to proceed.

Other upgrades: Work is under way to improve tracks used by the Hiawatha in Kenosha and Racine counties, as well as the platform at the Mitchell International Airport train station. Both projects are funded by a $12 million federal grant that was awarded at the same time as, but separate from, the $810 million grant.

(c)2012 the Milwaukee Journal Sentinel