Metro's chief executive told a congressional hearing yesterday that the Washington Metropolitan Area Transit Authority probably would default on interest due its bondholders in June, forcing the U.S. Treasury to make the payments, unless the federal government grants Metro a new longterm subsidy.
"That puts this area into the same position of New York," Rep. Robert B. Duncan (D-Ore.) responded, terming it "a bail-out of local obligations."
The warning that Metro lacks funds to pay the $12 millions due in the next fiscal year was made by Theodore C. Lutz, Metro's general manager, to the House Transportation Appropriations Subcommittee. Annual payments on the bonds will mount to $60 million by 1982, and eventually will level off at about $75 million.
Metro had asked both former President Ford and President Carter to agree to pay 80 per cent of the interest costs, with the balance to be raised locally. But neither chief executive included the proposal in the impending federal budget.
Lutz appealed to the Subcommittee yesterday to provide the interest funds and to increase Ford's request - untouched by Carter - for $350 million in subway construction funds next year to $545 million Subcommittee Chairman John J. McFall (D-Calif.) and other members of his panel were noncomittal on both issues.
The interest of $12 million in June is due on the first batch of the $1 billion in revenue bonds sold by Metro, many of them to private investors, to help finance this area's 100-mile rapid transit system. A study of possible cutbacks of the system is now being made.
Metro had hoped to pay off the bonds from train fare collections. However, ther first 5-mile line is running at a loss. And a study in 1975 concluded that the completed system would not earn enough from fares to pay even the expenses of operating the trains.
That left Metro with nopotential source of money to redeem the bonds, or to pay interest on them in the meantime. The issue has haunted the Metro board and management since the likelihood of constantly recurring deficits was disclosed.
The possibility of an 80 per cent federal subsidy of the bond payments got some tentative support last year from then-Secretary of Transportation William T. Coleman Jr.
That prospects was tied, however, to the adoption of a permanent financing plan for completion of Metro. With the ultimate extent and shape of the Metro now in doubt, no such plan has been agreed upon, and the bond subsidy idea fell by the wayside.
An aide to Brock Adams, the new Secretary of Transportation, said last week that no decision on a subsidy had been reached.
The sale of the bonds by Metro was authorized by Congress. That law provided for a gurantee that, even if Metro were default, the bondholders would be paid whatever is due them from the U.S. Treasury.
"At this point, we don't have funds," Lutz told the House Subcommittee yesterday. "We are probably in the position of certifying we don't have that money to pay (the interest)," and calling upon Adams to withdraw the needed funds from the Treasury.
When Metro began selling the bonds in 1972, it set apart some of the proceeds to pay interest to the investigation for the first four years.
Last December, it had to make the first regular payment of $3 million that was supposed to have come from fare collections. It diverted that sum from another account to make the payment, hoping the White House and Congress would support the new subsidy arrangement in time to make the larger payment next June.
Yesterday's appeal by Lutz for both the subsidy fund and for increased construction money was the first time in its history that Metro has asked Congress formore than the White Hose requese requested.
Metro hopes to embark upon a construction program of $744 million in the 1978 fiscal year, which for the federal government, will begin next Oct. 1. However, the proposed federal budget reduced that to $501 million, omitting the Georgia Avenue subway in Montgomery County northward from Silver Spring to Glenmont.
The bulk of the financing would come from transferring funds to Metro from abandoned interstate highway projects.
In another Metro matter yesterday. Rohr Industries, Inc., the builder of the system's subway cars, filed a claim for $48.3 million in additional compensation for the 300 vehicles.
Rohr's contract calls for payments totaling $93.4 million for the cars, 162 of which already have been delivered here from its assembly plant in Winder, Ga.
In its announcement yesterday, Rohr said higher costs were incurred as a result of changes Metro ordered in the car desigh, and as a result of production delays and disruption for which it was not responsible.
Metro issues a general denial, saying it was not aware of any delays other than those under Rohr's control. Rhor has contended that it is sustaining huge losses under the contract, and will abandon its rail car manufacturing division after all Metro cars are delivered.
Under Metro procedures, the claim will be weighed by the transit authority, and if it is not resolved to the satisfaction of both parties, will be submmitted to contract arbitration panel for a decision. CAPTION: Picture, Metro general manager Lutz says $12 million in interest is due in June. By James K. W. Atherton - The Washington Post