Maryland Purple Line team submits termination notice for $5.6B P3

UPDATE: June 25, 2020: Purple Line Transit Partners, the concessionaire for the Purple Line light-rail project, has notified the Maryland Transit Authority and the Maryland DOT that it intends to terminate its public-private partnership (P3) agreement effective 60 days from June 23.

PLTP's reason for terminating the agreement is that the project schedule has been delayed by 365 days or more at no fault of its own. However, PLTP said that during the next 60 days, it is willing to explore a resolution to the underlying disputed issues, like unreimbursed cost overruns, that have caused delays.

MDOT spokesperson Erin Henson told The Washington Post that PLTP doesn't have the right to file a termination notice and that the agency plans to send PLTP a notice of concessionaire default. Henson added that the state has made offers to settle its differences with PLTP but that the concessionaire has not proposed "reasonable" terms.

Dive Brief:

The design-build team behind the Maryland Transit Administration's $2 billion Purple Line light-rail system announced it will withdraw from the project due in part to an ongoing dispute with state transportation agencies over delays and cost overruns.
Purple Line Transit Constructors — made up of Fluor, Lane Construction Corp. and Traylor Bros. Inc. — said that “the lack of meaningful resolution on the impacts of third-party lawsuits, delayed right-of-way acquisition and changes to regulations and third-party agreements” have made its participation unsustainable. Walking away from the job cuts $1.2 billion from Fluor's backlog, according to Seeking Alpha.
The team’s withdrawal from the public-private partnership stems from a three-year disagreement with the Maryland Department of Transportation and the MTA for the 16-mile, 21-station project designed to link Washington, D.C.’s northern suburbs.

Dive Insight:

PLTC said in a May 1 statement that it has been “unable to obtain the time and cost relief to which it is entitled” from the agencies to address a combination of factors that added more than a year to the project.

The Purple Line is being financed and built via a $5.6 billion public-private partnership, one of the most far-reaching of any U.S. transit project, according to The Washington Post.

Last March, the consortium told officials that the project was facing a near $300 million cost overrun and could open in March 2023, several months beyond the state deadline. The $300 million is largely for delays related to a federal lawsuit that stalled the project for a year and includes approximately $100 million for construction acceleration costs and late land purchases.

PLTC’s design-build agreement includes an exit clause if total delays reach 365 days. The transition will take about 60-90 days, the statement said.

“PLTC has spent nearly three years negotiating with MDOT and MTA in the hopes of continuing its participation in the project, even though delays have extended well beyond the 365-day threshold,” the statement said.

A statement emailed to Construction Dive from the MTA said that the state agencies have been actively engaged in discussions with PLTC to mitigate the impacts of litigation and change order requests on the project schedule and cost.

"While MDOT MTA cannot comment further until a settlement agreement is reached, we remain committed to continuing negotiations and focused on getting this key transit project completed and operational for the taxpayers of Maryland," it reads.