Maryland delays vote on plan to build, finance Purple Line

October 16, 2013

The Maryland Department of Transportation delayed a vote by a state board on whether to seek a private consortium to build, run and help pay for a light-rail Purple Line because the agency needs more time to prepare the highly complex plan, a spokeswoman said Wednesday.

The postponement surprised Purple Line advocates, including some who question whether ceding control of a rail line to the private sector for 35 years would lead to better service, as state officials have said. The proposal also has drawn opposition from a major transit union, which met recently with staff members of Maryland Gov. Martin O’Malley (D), a union official said.

The Maryland Board of Public Works — made up of the governor, state comptroller and state treasurer — was scheduled to vote Wednesday on whether to designate the $2.2 billion Purple Line as a public-private project. The board’s approval is required before the Transportation Department may solicit teams of companies to submit proposals for a 16-mile light-rail line between Montgomery and Prince George’s counties.

But on Tuesday afternoon, the department pulled the issue from the board’s agenda and postponed it until Nov. 6. Erin Henson, a department spokeswoman, said she couldn’t provide details about the need for more time.

“It’s a very complex process, so we’re just making sure it’s all well understood and any questions are answered,” Henson said. “There are a lot of moving parts. It’s not simple and cut-and-dry like most contracts that go before the Board of Public Works. . . . MDOT remains committed to the plan and the benefits of the Purple Line as a [public-private] project.”

Map of the proposed Purple Line

The contract would be for 35 years — five years of construction and 30 years of running and maintaining the line — and could entail more than $6 billion in public funding.

It would establish the first public-private partnership for a Maryland transit project and the first state construction project developed under a new state law making such arrangements easier to do.

The contract would also be one of the broadest public-private deals for a U.S. transit project. Only one other relies on private financing in addition to having the private sector design, build, operate and maintain the line. That project, a commuter rail line in Denver, is under construction.

Sen. Richard S. Madaleno Jr. (D-Montgomery), a member of the Senate Budget and Taxation Committee, said he is not surprised that the state wants more time to develop a proposal that involves “huge risk.”

“This is a whole new law, and this is the first time we’re going through the process, and we’re going through it on what might be the single biggest procurement in the history of Maryland,” Madaleno said. “You’re trying something new on something that’s really, really big.”

Under the proposal, a team of companies would contribute $500 million to $900 million.

The state would reimburse the team’s construction costs as the project reached certain milestones. Then the state would pay the team $100 million to $200 million a year to operate and maintain the line. The state would buy land needed for right-of-way, own the line, set fares and oversee the agreement.

The light-rail Purple Line would run two-car trains on local streets between Bethesda and New Carrollton and connect Metrorail, MARC commuter and Amtrak rail stations. State officials say the rail line would be faster and more reliable than buses and would spur redevelopment near stations.

The state hopes to begin construction in summer 2015 and to open the line in mid-2020.

The plan to have a private company operate the Purple Line for 30 years has sparked opposition from the labor movement, one of O’Malley’s key political supporters.

The Amalgamated Transit Union, which represents employees of the Maryland Transit Administration and Metro, has met with O’Malley’s office, said Robert Molofsky, the union’s general counsel.

Molofsky declined to discuss the union’s concerns in detail. But in documents submitted to the state, the union questioned the state’s estimates that a public-private partnership would save up to 20 percent over the 35 years and said private companies save money with low wages and poor health benefits.

The union also cited cases of private rail companies being accused of boosting their on-time performance by requiring drivers to skip stops.

Ben Ross, vice president of the local advocacy group Action Committee for Transit, questioned whether the state could ensure that a private operator would provide good service, even if annual service payments were based on performance.

“How do you control a contractor that you can’t fire for 30 years?” Ross said. “How do you write performance standards in 2013 for a state-of-the-art rail system running in 2048?”

A key question for the Board of Public Works is whether the state’s payment of private-sector financing costs would be counted as state debt, which would limit funding for other construction projects.

Transportation officials said the payments the state would make toward the private financing costs shouldn’t count as state tax-supported debt because they would be covered by Purple Line fare revenue. If that revenue comes up short of projections, transportation officials have pledged revenue from other state transit systems.

katherine.shaver@washpost.com

Katherine Shaver is a transportation and development reporter. She joined The Washington Post in 1997 and has covered crime, courts, education and local government but most prefers writing about how people get — or don’t get — around the Washington region.
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