PURPLE LINE TO BE PRIVATELY OPERATED AND
COST TAXPAYERS $2.43 BILLION
In September, the Washington Post reported that the estimated cost of building a light-rail Purple Line --- proposed to go through the Maryland suburbs --- has risen by $56 million, bringing the total projected budget for the state-funded project to $2.43 billion.
Four respective teams of private companies have been selected to bid on the project and submit proposals to Maryland for the public line. Governmental entity, WMATA, who currently operates all Metro rail lines, did not bid. The four bidding teams are: Maryland Purple Line Partners, comprised of Vinci Concessions, Walsh Investors, InfraRed Capital Partners, Alstom Transport and Keolis; Maryland Transit Connectors, comprised of John Laing, Kiewit Development and Edgemoor Infrastructure; Purple Line Transit Partners, comprised of Meridiam Infrastructure, Fluor Enterprises and Star America Fund; and Purple Plus Alliance, comprised of Macquarie Capital and Skanska Infrastructure Development.
Delegate Luiz R.S. Simmons (D-Montgomery) told the Post he is concerned with what happens if the private company awarded should go bankrupt or cannot complete the job. “If it is a mistake, generations of taxpayers will have to live with it,” says Simmons.
Critics also argue that a low-bid procurement process encourages the bidding contractors to submit artificially low bids. After submitting a low bid, the company can then request change orders that will drive up the project’s cost so they can make greater profit. While the projected budget is currently $2.43B, if the final cost is higher, Maryland tax payers will be on the hook to pay it.
Maryland officials plan for the private company to finance the costs of construction and the state will pay it back over time with Purple Line fare revenue. If ridership does not materialize, Maryland will have to take fare revenue from other state transit systems to make up the difference --- including WMATA.
The bidding companies will have until Jan. 9, 2015 to submit their proposals for the 35 year agreement. A preferred bid will be chosen by spring 2015 and the winner will have control of the public line for at least the next three decades.
The winning private company is expected to make a $500 to $900 million contribution toward construction. That company will then be reimbursed for design, construction and equipment costs as work progresses over five years, beginning in 2015. After 2020, the state tax payers will pay the company $100 to $200 million annually to operate and maintain the line for 30 years, based on certain performance standards which include providing reliable service and maintaining clean trains.
The 16-mile Purple Line will provide a direct east-west transit connection between Maryland’s ends of the Metrorail system, MARC commuter rail stations and Amtrak. The line will have 21 stations throughout Montgomery and Prince George’s counties, respectively. Stations would include locations in North Chevy Chase, Silver Spring, Langley Park, College Park and Riverdale Park and will run along local streets and the wooded Georgetown Branch Trail.