DALLAS -- Maryland can restart work on its $5.6 billion Purple Line light rail system being financed as a public-private partnership after a federal appeals court reinstated the project’s federal environmental approval.

Maryland's proposed $5.6 billion Purple Line light rail P3 would connect with WMATA’s Metrorail system at four of its planned 21 stations along the 16-mile route.
Maryland's proposed $5.6 billion Purple Line light rail P3 would connect with WMATA’s Metrorail system at four of its planned 21 stations along the 16-mile route.
Maryland Transit Administration

Wednesday’s ruling by a three-judge panel of U.S. Court of Appeals for the District of Columbia did not dismiss an environmental lawsuit that halted the project last year but said that work could continue while the case goes through the appeals process.

The appeals court put on hold federal District Judge Richard Leon’s order that the Maryland Department of Transportation and the Federal Transit Administration had to revise their passenger estimates for the line before it could proceed.

“The state of Maryland has satisfied the stringent requirements for a stay pending appeal,” the appeals court said.

The state was five days away from accepting a $900 million New Starts grant for the project in August 2016 from the FTA when Leon revoked the Purple Line’s environmental clearance.

Congress has appropriated $325 million to the Purple Line, but the state cannot access the funding until the grant agreement is signed.

A Transportation Department spokesman declined to say whether the appeals court’s decision would be sufficient to release the transit grant, which would provide most of the state’s contribution to the project’s $2 billion construction cost.

Maryland Transportation Secretary Pete Rahn, who halted engineering and preliminary site work on the rail system June 1 due to the court-ordered delay, hailed the latest decision.

"We will be working with the Transportation Department to move a full funding grant agreement forward,” he said.

The panel’s decision puts the Purple Line back on track, said Maryland Attorney General Brian Frosh.

“It will allow construction of the Purple Line to commence and we will continue to do everything we possibly can to keep the Purple Line moving forward,” Frosh said.

In earlier court filings Frosh said the state might have to cancel the P3 agreement if the appeals court did not lift Leon’s order by Aug. 1, making it liable for $800 million of termination fees to the private partners and other expenses.

The Maryland Transit Administration signed a 36-year concession agreement in April 2016 with Purple Line Transit Partners LLC to build and operate the rail system. The consortium partners include Fluor Enterprises, Meridiam Infrastructure Purple Line, and Star America Fund.

The ruling by the appeals court was “a stunning rebuke of Judge Leon,” said Roger Berliner, president of the Montgomery County Council.

“In effect, what the judges have done is reinstated the federal government’s approval of this project, and now this project is available for federal funds,” Berliner said. “We believe that we will be successful in getting those dollars.”

Leon said he vacated the project’s environmental clearance in 2016 because FTA and the state had failed to “take a hard look” at how the Purple Line would be affected by maintenance issues and ridership declines on the Metrorail system operated by the Washington Metropolitan Area Transit Authority. Up to a third of the Purple Line passengers are expected to use Metrorail during portions of their journeys.

May’s fiscal 2017 omnibus budget measure includes $125 million for the Purple Line if a full funding agreement is signed before the end of the federal fiscal year on Sept. 30.

The Trump administration budget proposal for fiscal 2018 would eliminate New Starts grants for projects without an existing funding agreement with FTA. However, the House Appropriations Committee on July 18 approved a spending plan for 2018 that includes $45.7 million for transit projects that sign a New Starts grant agreement during the year.

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