WASHINGTON -- Almost three years after Amtrak and other passenger and freight railroads were given $3.5 billion to borrow at low interest rates to fix their tracks and equipment, all the money remains unused, reports a wire service.

Federal railroad officials said it took more than two years to set up the one-of-a-kind loan program, and they expect to begin making loans later this year. They have heard from 19 prospective borrowers.

But the chairman of the House subcommittee overseeing the railroad industry said the money should have been handed out long before now. "They really dragged their feet," said Rep. Jack Quinn, R-N.Y.

The railroad loan program was part of the surface transportation bill signed into law by President Clinton in June 1998. The bill directed how to spend gasoline tax money on highways and mass transit over six years, besides setting up the initial railroad program.

Railroads could borrow money for 25 years at low interest rates from the federal government, much better terms than they could get from the private sector. The idea was to give the industry the money it needed to repair its tracks and improve its equipment.

A section of track in need of repairs may have caused Sunday's derailment of an Amtrak train in Iowa, killing one person and injuring 96 others. The train derailed in an area where a rail defect had been detected and a temporary patch installed.

Earl Durden, who owns 13 small railroads, is trying to borrow $8 million to improve 80 miles of track he uses to haul copper ore to Mesa, Ariz., where his railroad connects with Union Pacific for long-distance travel.

The work will allow Durden's railroad to handle the new, bigger rail cars, which can carry 286,000 pounds, a 9 percent increase. Without it, customers who use his railroad won't be able to transport a full load of ore.

"It benefits our business and enables us to provide a service to our customers that we're going to have to do to keep competitive," Durden said.

Durden said he has finally been able to submit a loan application to the federal government.

"It seems like it's taken them a long time to get the procedures and all in place," he said.

What worries Quinn is that the $3.5 billion could wind up being allocated elsewhere in this year's budget if the Federal Railroad Administration doesn't start making loans.

"If we make this a priority early in the session, we can start pumping some of that money out," Quinn said. "If you don't use it, you lose it. They'll find somewhere else to put that $3.5 billion."