The Federal Transit Administration has given its approval for the city to begin preliminary engineering on the proposed $5.3 billion rail transit project, U.S. Sen. Daniel Inouye's office announced.

Acceptance of the city's application was expected, after a report prepared earlier this year by a federally approved consultant, Jacobs Engineering Group, indicated the project should move forward.

“;The next big step will come with our push to authorize the federal share of $1.5 billion,”; Inouye said in a news release yesterday.

During the preliminary engineering phase, the city is expected to refine details of the project, including a more precise construction schedule and an updated financial plan.

The Jacobs report estimated the cost of the project at $5.29 billion, about $117 million more than the administration's most recent cost estimate of $5.17 billion derived in the past year.

Mayor Mufi Hannemann had noted the figure was less than the administration's original estimate of $5.43 billion.

To date, Hawaii's congressional delegation has obtained about $35 million in federal money to assist the project, Inouye's office said.

Hannemann said yesterday he remains hopeful the city can break ground in December on the initial phase of the 20-mile rail route from East Kapolei to Ala Moana Center.

He said the city is awaiting final state approval of an environmental impact statement and then a federal record of decision before ground can be broken.