Orlando, Fla. — Officials here are hopeful they can turn a $420,000 federal grant into a privately owned $537 million rail transportation system to serve the city's tourist and business areas.
The grant, the project's cornerstone, has won Washington approval despite the Reagan administration's policy of not funding new rail systems at this time.
''This is the only project of its kind in the nation,'' says Arthur Teele, head of the Urban Mass Transportation Administration.
''The people down there,'' he explained, ''are proposing to build a rail system without substantial involvement by the federal government. This grant will deploy buses along the corridor where they propose to run the rail system to test the feasibility of it in terms of ridership.''
Mr. Teele stresses that the federal government is not funding a ''new rail start'' in Orlando. Instead, he said, ''If this system is built, it will be built from local resources.''
The grant, along with $157,500 each from the state and the City of Orlando, is designed to do three things, says Orlando Mayor Willard D. Frederick Jr. ''It will provide an interim transit service, test-market response for a permanent system, and hopefully attract funding from the private sector,'' he reported.
Mayor Frederick said the proposed rail route would connect the Orlando Airport, Walt Disney World, and the downtown business district. Currently, he added, that route is served by a variety of bus and private-transport services and an overcrowded highway.
Studies completed earlier this year, the mayor went on, indicate that by 1990 about 75,000 people would use this route each day.
''You cannot build a road wide enough to handle that kind of traffic,'' the mayor asserted.
The city and numerous local agencies will work together to establish what Orlando's transportation engineer, Daniel Brame, calls a limited express system. ''It will be running on the route with a limited number of stops and a higher quality of service than normal transits,'' he declares. That is to be the pilot project.
Within 18 months the officials hope to have demonstrated enough demand for a permanent service to garner the estimated $537 million (in 1980 dollars) it will take to build the rail system.
Part of the uniqueness of the project, says Teele, is its ''strong support from a large, diverse group of local elected and appointed officials . . . and of the private community in terms of financing and decisionmaking.''
While no funding commitments have yet been made, Mr. Brame said he was reviewing written proposals from two groups. He said one is from a consortium headed by the US subsidiary of Urban Transportation Development Corporation Ltd. , a Canadian concern. The other is from a ''new local corporation called SUTA Inc., a group formed specifically to submit this proposal.''
Brame says that the SUTA proposal cites support from 16 groups of companies, some of which are international.
Mayor Frederick said he is optimistic about receiving the necessary private funding. Like other area officials, his optimism is buoyed by the fact that estimates put the number of annual tourists to the area at 9 million, a number they feel justifies calling Orlando ''the tourism capital of the world.''
Nevertheless, the mayor said he still thought ''everybody needs to be cautious.''
Brame said it would be wise to keep the funding options open, saying this project is being developed so that it's possible to shift toward more local support, or toward more federal support should, for example, the federal rail policy of ''no new starts'' change in the next few years.
Still, he says, the primary plan would be to use private funds instead of federal.
While a national engineering firm has already been contracted to study the environmental impact of the project, there is another area of concern.
''We have to make sure we do not put any of the existing bus services out of business,'' declares Michael Harbour, director of planning and development for the local transportation authority, a public entity.
Project leaders hope to have the pilot buses rolling along the 32-mile proposed rail route by next April.