Maryland's Light Rail P3 Plan Moves Forward

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DALLAS — The Maryland Transit Administration plans to seek bids soon for a private partner willing to provide up to $900 million of funding for a $2.2 billion light-rail line in the northern suburbs of Washington following Gov. Martin O'Malley's and the state Board of Public Works' unanimous approval of the P3 competitive solicitation process.

The state will select a private partner to design, build, finance, operate, and maintain the 16-mile Purple Line that will link up with three existing heavy-rail Metro lines operated by Washington Metropolitan Area Transit Authority, three lines of the MARC commuter rail system, and Amtrak passenger train service.

The successful concessionaire will receive annual availability payments of $100 million to $200 million a year from the state for operating and maintaining the light-rail system for 30 to 45 years, state officials said.

The contract will include a five-year construction phase before the annual payments will begin. The state will reimburse the concessionaire for expenditures during construction.

Funding will include $750 million from the Maryland's Transportation Trust Fund through 2019, $110 million each from Montgomery and Prince George's counties, and a federal transportation loan of $900 million that is being sought by the state.

A request for qualifications will be issued soon, with three to four possible qualified partners identified in December. A preferred partner is expected to be identified in fall 2014 with final selection by the Board of Public Works in late 2014 or early 2015, state officials said.

Construction could begin in Spring 2015 with completion in 2020. Ridership by 2030 is expected to total 60,000 a day, they said.

O'Malley, who chairs the three-member Board of Public Works, said the Purple Line will be the biggest P3 project in Maryland and one of the few to rely so heavily on private financing.

"We are sending a clear signal to private industry leaders throughout the world that Maryland is open for business and welcomes their ideas and ingenuity as we build a 21st century transportation network to support and grow our economy," he said.

Treasurer Nancy Kopp, who also serves on the board, said the availability payments promised in the contract will probably not be considered as state tax-supported debt, but that the final determination has not been made.

"We can't tell you for sure until we have an actual contract to be reviewed," she said.

The Purple Line will run east-west inside the Interstate 495 Beltway that encircles the District of Columbia. It will stretch from Bethesda in Montgomery County to New Carrollton in Prince George's County.

The state will own the land and rail assets of the system operated and maintained by the private partner, said Maryland Transportation Secretary James T. Smith Jr.

"The size and scope of the Purple Line make it well suited to this innovative delivery method," Smith said. "We will remain engaged with local communities to ensure that all state goals, responsibilities and commitments are fulfilled."

The annual payments could be reduced if the operator fails to meet on-time standards and other stipulations, Smith said.

"After all, our name will be on the train," he said. "This is a project that's a big deal, and it's going to be a big deal for a long time."

Smith said the Purple Line P3 may serve as a model for other transportation projects in Maryland.

The availability payments will come from revenue generated on the Purple Line and other systems operated by Maryland Transit Authority, he said. MTA will set the fare schedule.

Revenue from the Purple Line is estimated at $35 million to $40 million a year.

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Infrastructure Transportation industry Washington Maryland
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