DALLAS — The winning bidder for Denver’s 23-mile rail line from downtown to Denver International Airport says it can bring the project to completion 11 months earlier than expected and $300 million under budget.
The long-sought commuter line is one of the showpieces of the Regional Transportation District’s $6.5 billion FasTracks project, which aims to add 122 miles of commuter and light rail, 18 miles of bus rapid-transit service, and 21,000 parking spaces, along with redeveloping the landmark Denver Union Station as a transit hub in lower downtown. FasTracks is designed to be one of the largest public-private partnerships in the nation.
In addition to local bond proceeds and private capital, the RTD expects the airport rail line known as the Eagle P3 project to draw $1 billion next year through the Federal Transit Administration’s full funding grant agreement process.
“It is a remarkable achievement for RTD to get a project of this magnitude through a public-private partnership that meets our goal of contracting under our budget and ahead of our schedule,” said chairman Lee Kemp. “We said three years ago that public-private partnerships would be a vital part of keeping our FasTracks program moving forward.”
The team chosen for the airport line calls itself Denver Transit Partners and includes Fluor Enterprises Inc., Macquarie Capital Group Ltd., Ames Construction, Balfour Beatty Rail Inc., Alternate Concepts Inc. and HDR.
Along with final design and construction, Denver Transit Partners is providing private financing and will operate and maintain the rail service on the lines for 40 years. In return, the RTD will make annual payments to DTP based on its performance in meeting the district’s service standards.
DTP was selected this week by the district. It was one of two finalists on the project. The RTD will pay the losing team, Mountain-Air Transit Partners, a $2.5-million stipend in exchange for the intellectual property in its proposal.
Denver Transit’s plan combined with the RTD’s project costs would come to $2.085 billion, compared with district’s budget estimate of $2.385 billion. The RTD’s “best-value” evaluation rated Denver Transit both the higher technical proposal and the lower cost proposal of the two bidding teams.
The lower-than-expected bid was good news for a transit authority that has seen anticipated construction costs for the entire FasTracks system far exceed the original $4.7 billion price tag. To cover the difference, officials plan to call an election next year that would authorize raising the project’s sales tax enough to cover the additional debt. If the election fails to raise the needed revenue, the RTD could face delays of up to 25 years for a project designed to be completed in 2017.
Earlier this spring, Standard & Poor’s shifted the RTD’s certificates of participation outlook to negative from stable, affecting COPs issued in 1998, 2002 and 2005. The negative outlook was directly related to the Eagle P3 project, whose financing costs were expected to add pressure to the RTD’s financial position in a weak economy.
The district had $924 million of sales tax bonds outstanding last year, in addition to $291 million of lease-secured COPs, Standard & Poor’s said. Sales tax revenue collections of $371 million last year represented a 10% decline from 2008, analysts said.