NEW BEDFORD, Mass. (WPRI) — Gov. Charlie Baker’s administration announced Monday it is delaying the start of train service to New Bedford and Fall River by another year after the cost of its scaled-back proposal rose to more than $1 billion.

The Mass. Department of Transportation and the MBTA announced they had agreed on a financing plan for Phase 1 of South Coast Rail that puts the project cost at $1.047 billion, up from last year’s estimate of $957 million. Service is now slated to begin in late 2023, rather than late 2022 as previously promised.

Officials stressed the positive in a news release Monday, announcing they have agreed to fund the billion-dollar project through state bonds rather than MBTA borrowing. They also said the U.S. Army Corps of Engineers has approved the final federal permit needed to build South Coast Rail. They described the two announcements as major milestones.

“Providing rail service between the South Coast and Boston will increase access to economic opportunities in both regions,” Baker said in a statement. “After decades of promised service, today’s announcement moves the project further than it’s ever been before, and our administration is proud to continue advancing South Coast Rail.”

“The last major hurdle with Phase 1 proceeding was the finance plan and now that hurdle is gone — funding has been identified,” Transportation Secretary Stephanie Pollack said. “Phase 1 of South Coast Rail will be funded 100% by the Commonwealth and the MBTA will not be required to provide any capital funding or issue any revenue bonds that might otherwise impact the MBTA’s future operating budget.”

Baker’s team has split South Coast Rail into two phases, and the newly committed $1.047 billion would only cover Phase 1, which would send diesel trains from New Bedford, Fall River and Taunton to South Station on a winding route using the existing Middleboro line. (The long-sought full electrified line to Stoughton would be done years from now as Phase 2; the last cost estimate for that was $3.2 billion.)

MassDOT said the finance plan for Phase 1 announced Monday follows three independent assessments. The state will borrow the money through both general-obligation bonds and special-obligation Rail Enhancement Program bonds.

State Sen. Mark Montigny, who has spent years fighting for South Coast Rail, said the financing plan and federal permit announcement is “a welcome development,” but called it “unacceptable” to push the start date back to 2023.

“We still have a long way to go to ensure proper ride times and schedules for New Bedford residents who have been more than patient in this decades-long wait,” Montigny, D-New Bedford, said in a statement.

“MassDOT and the MBTA must stick to its 2022 completion schedule,” he said. “Anything less signals that we should simply defer to the original Stoughton route with electric rail as Phase 1 was promoted as an interim, near-term solution only.”

Other officials felt differently.

New Bedford Mayor Jon Mitchell said, “Although the residents of Southeastern Massachusetts recognize that the region’s economic fortunes will not rise or fall on the back of the South Coast Rail project – especially the current downsized version – the Baker administration’s commitment to funding the project is now notably firmer, and for that I am grateful.”

“Awesome to read these words this morning,” state Rep. Carole Fiola, D-Fall River, tweeted after the Baker administration distributed its news release. She added that the governor and Lt. Gov. Karyn Polito had been “true to your word.”

Members of the MassDOT Board of Directors and the MBTA Fiscal and Management Control Board were expected to discuss and vote on the South Coast Rail finance plan at a meeting on Monday. If approved, South Coast Rail would become an MBTA project.

Ted Nesi ( covers politics and the economy for He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook