Track improvements to the Newport Secondary Line will be undertaken this spring to allow for the eventual establishment of a seasonal rail shuttle between downtown Newport and the resurgent Melville district in Portsmouth.

The improvements will be paid for with a $300,000 federal Congestion Mitigation and Air Quality grant obtained three years ago by the Newport Dinner Train, according to chief operating officer Robert J. Andrews. Its owner has created a separate company, the Islander Shuttle, to lure tourists and residents out of their cars and into mass transit.

Meanwhile, the company has just completed an application to the same federal program for another $1.53 million to pay for future development phases of the Islander Shuttle.

With fuel prices skyrocketing, said Andrews, “It’s going to be more and more important that there are alternative modes of transportation. It’s becoming extremely obvious.” The plans call for letting children ride for free and allowing people to bring their bikes and beach chairs on board.

The first portion of the $1.53 million will go toward construction of a train station and a 100-car parking lot at Melville on the state-owned Newport Secondary Line.

The station would be in the heart of several major housing and marina projects being pursued by O’Neill Properties Group, owner of the nearby Carnegie Abbey resort. Among them are a 1,500-slip marina and housing development at Weaver Cove and various residences at and near the 22-story Tower At Carnegie Abbey

Later work would add a platform and parking further north along the Newport Secondary, at the former Weyerhaeuser terminal, where O’Neill wants to build another marina and housing development.

The final phase of the rail project would be to extend the improvements to Common Fence Point and the Sakonnet Bridge. Andrews said this phase would be timed “with the building of the bridge so that cars would be able to immediately pull off the bridge and bring their car into a commuter parking lot and come downtown without worry about parking.”

The two light-diesel rail cars that will serve as a pair of shuttles on the Newport Secondary have already been purchased. The vintage Budd cars, nearly 50 years old and wrapped in stainless steel, require no locomotive or caboose. To change direction, an engineer simply walks from one end of the car to the other, since there are controls at either end.

The cars, which Andrews says cost more than $200,000, made a dramatic crossing of Narragansett Bay by barge last spring. Their interiors have been refurbished and they have been used for scenic rail trips and on holiday Polar Express excursions, Andrews said.

The railway improvements will upgrade the Newport Secondary’s designation from a low Class 1 to a high Class 1, allowing the speed limit to be raised slightly, to 15 mph. Also, said Andrews, the improvements will develop sidings, where one train can pull over to make way for an oncoming one.

The job will be put out to bid next week, he said, adding that the work should begin in the spring and be completed in less than a month. That will ensure that the project does not interfere with rail operations that peak with the summer tourist season.

If the federal grant is approved, the proposed railway construction would take place from 2009 to 2011, with the shuttle beginning service in 2010, Andrews said. Ideally, he said, the service would be launched just as the O’Neill Properties development reaches a critical mass.

Andrews said that the grant would not address any improvements that are needed in Newport. The reason, he said, is that the city is working on its own plans to revitalize the Gateway Center transportation hub on America’s Cup Avenue, which is near the end of the Newport Secondary.

rsalit@projo.com