Dive Brief:
- The Maryland Purple Line light rail project jumped its final approval hurdle this week as the Maryland Board of Public Works gave its unanimous approval to the $5.6 billion public-private partnership (P3) contract with Purple Line Transit Partners, according to The Washington Post.
- Maryland will contribute $3.3 billion to the 16.2-mile rail project linking suburban areas with each other, DC and other major cities. Montgomery and Prince George’s counties will kick in $330 million, the federal government $900 million, and the private component of the P3 will finance $1 billion in exchange for an annual maintenance fee.
- The state will pay the maintenance and operation arm of the P3 roughly $149 million a year for the 30-year term of its maintenance agreement, the Washington Business Journal reported.
Dive Insight:
The contract with Purple Line Transit Partners, a joint venture between Fluor, Meridiam and Star America, is expected to be finalized as soon as June, with plans to begin construction in late 2016. Service is tentatively slated to begin in early 2022.
Critics of the project said the 30 days since the project’s plans were revealed was not enough time to review the contract sufficiently, but state officials said critical, time-sensitive project financing hinged on speedy approval of the deal. In addition, the state will now be able to secure its $900 million grant from the Federal Transit Administration, The Post reported.
The Maryland P3 project is the second transportation project in the U.S. — along with Denver — to use private funding, and is the state's most expensive contract in history, according to The Post.
In the excitement around the board’s announcement, there was no mention of the $650 million in unexpected construction costs revealed by a state legislative analysis late last month. The figure for current construction costs, according to analysts, does not include nearly $200 million the state has already spent planning the rail and approximately $450 million for right of ways and construction oversight.
Nevertheless, if Democrats in the Maryland Assembly have their way, approval of such massive projects like the Purple Line will be handled a little differently. Currently, the Gov. Larry Hogan can designate projects with which he wants to proceed without much scrutiny in the selection process. However, this week, the General Assembly sent the governor a bill that would require his administration to start "scoring" state projects based on nine categories. Under the proposed system, the governor would be able to decide how much weight to give each category. He wouldn't be required choose those projects with the highest-ranking scores, but he would be required to explain why he chooses one project over another. Hogan vetoed the bill, but there is still time for an override.
