Purple Line Transit Partners Selected to Build Light-Rail Line

Purple Line Transit Partners Selected to Build Light-Rail Line

Gov. Larry Hogan directs state transportation department to move forward with the project

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Maryland Transit Administration

Update – 12:20 p.m. – Gov. Larry Hogan announced Wednesday the state has chosen Purple Line Transit Partners to build and help finance a 16.2 mile light-rail line that will stretch from Bethesda to New Carrolton in Prince George’s County.

Purple Line Transit Partners is comprised of the global investment firm Meridiam, the engineering and construction company Fluor Enterprises and the infrastructure developer Star America.

“With great construction know-how, superior transit expertise and continued low interest rates, Purple Line Transit Partners is positioned to deliver a tremendous value to Maryland taxpayers,” Maryland Transportation Secretary Pete Rahn said in a press release from the governor's office.

Hogan said he has directed the state’s transportation department to move forward with the project now that the bid has been selected.

The announcement of the winning bid by Hogan is another step toward construction, which nearly a year-and-a-half ago had the possibility of not happening at all. Hogan publicly questioned the project’s cost while on the campaign trail, then shifted to considering killing the project after being elected. In June, however, he announced the project would move forward as long as the state’s costs could be reduced.

“After eight months of hard work and tough negotiating, the Maryland Department of Transportation has met all three of the needed requirements and delivered a cost-effective Purple Line with a strong commitment from our federal, county and private partners,” Hogan said in the statement.

Hogan said those three requirements were greater buy-in from the local jurisdictions, reserved federal funding and “aggressive” pricing from the winning bid. The state now estimates the project to cost $149 million annually over 30 years compared to earlier estimates of $167 million per year.

The state said it had cut $550 million of its projected costs and now estimates the light-rail line’s cost to Maryland will be $3.3 billion over the 36-year agreement with Purple Line Transit Partners, according to the statement. During that time, the rail line is estimated to bring in $1.36 billion in fare revenue.

Hogan said the state will pay an upfront expenditure of $159.8 million for the project after securing greater financial commitments from Montgomery and Prince George’s counties as well as the federal government. Montgomery and Prince George’s counties will contribute a combined $330 million, while the federal government has reserved $900 million to help pay construction costs. President Barack Obama’s fiscal 2017 budget recommends $125 million for the project and so far the federal government has appropriated $325 million toward the project.

The state has not yet released the formal agreement with Purple Line Transit Partners and immediate attempts to contact his press office and the state’s Department of Transportation Wednesday morning were not successful. The financial details or design aspects of the winning bid weren’t immediately available Wednesday.

During a conference call with reporters Wednesday morning, Sec. Rahn said he did not know the exact cost of constructing the Purple Line under the agreement. Previous estimates from the Maryland Transit Administration estimated construction would cost about $2.2 billion. But Rahn said since he's been at the helm of the agency it has not issued any new estimates. He instead focused during the call on the state's estimates that project will cost $550 million less over the 36-year agreement, despite repeated questions from reporters asking for the construction cost.

He described the Purple Line Transit Partners proposal as the one with the "greatest value, which had the best technical scores by a substantial margin and the lowest cost."

Rahn said construction is likely to begin in late 2016 and be completed by the spring of 2022.

In the statement, Purple Line Transit Partners CEO Herb Morgan said the project “demonstrates how the public sector can join forces with the private sector to deliver innovative projects at a fixed price with a guaranteed schedule, all while transferring operations, maintenance and performance risk to the private partners.”

Purple Transit Partners will be responsible for financing, designing, constructing and operating the rail line and then will be repaid by the Maryland Transit Administration in annual payments once the line is operating, according to the transit agency. The winning team was chosen over three other bids from other teams.

Fluor, a global engineering firm based in Austin, Texas, would handle most of the construction, operations and maintenance tasks. The company, which dubs itself "one of the world's largest publicly traded engineering, procurement, construction, maintenance and project management companies" on its website, previously built Express toll lane projects in Virginia, which earned praised from Virginia officials for coming in on time and on budget, according to The Washington Post.

The light-rail line has been designed to include 21 stations including stops in Bethesda, Chevy Chase, Silver Spring, College Park and New Carrollton. Advocates say it will help to resolve east-west traffic congestion issues in southern Montgomery County and serve as a transit connection between the two opposite ends of the Red Line in Silver Spring and Bethesda.

Purple Line map, click to expand.

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