Maryland seeks private-sector input on ways to finance and build Purple Line

April 11, 2013

Maryland transportation officials are asking private companies to consider how they could help build — and, most importantly, help pay for — a light-rail Purple Line in the Washington suburbs.

If they move ahead with the ideas, it would be the first time the state has sought private investment for building a transit project. A 16-mile Purple Line to provide a direct transit link between Montgomery and Prince George’s counties has been studied for years, but state officials have yet to demonstrate how they would pay for it. The construction costs are estimated at $2.15 billion, and the projection has increased steadily in recent years.

The Maryland Transit Administration has issued a “request for information” to private companies for “best practices and innovative approaches” to finance and build the line between Bethesda and New Carrollton, via Silver Spring and College Park. The agency also is soliciting similar ideas for a proposed $2.57 billion light-rail Red Line in Baltimore.

“Let’s explore every option to fund these major projects,” said Lt. Gov. Anthony G. Brown (D), who has championed state efforts to forge public-private partnerships.

The state’s request for information follows the Maryland General Assembly’s approval of legislation that makes it easier for the state to enter into such arrangements. More governments are doing so as needs for relieving traffic and managing growth have outpaced tax revenue.

The Purple and Red line rails in Maryland

Virginia recently worked with two private companies to finance and build the Interstate 495 express lanes on the state’s portion of the Capital Beltway. The Transurban and Fluor companies built the lanes and covered much of the nearly $2 billion in costs in exchange for the toll revenue.

Brown said private investment in one of the Maryland light-rail projects could free up state funds for the other line. The state also is exploring the possibility of having companies both design and build each line, which would be faster than the traditional method of soliciting separate bids and contracts for each phase.

State officials are seeking highly competitive federal aid to cover half the construction costs of both projects. The state soon must present a financial plan to the Federal Transit Administration detailing how it plans to pay for its share. Even if private investments are sought, the projects still would require “significant” state funding and potentially local money, a state spokeswoman said.

Private companies must respond by May 8.

The state then plans to host separate public forums to discuss the ideas and decide this summer whether either project is suitable for a public-private partnership.

If funding is secured, construction on both projects is scheduled to begin in 2015, with openings after 2020.

Calls to expand mass transit in the state’s two largest urban areas were a major consideration in the legislature’s recent passage of an increase in the gas tax. The increase, which will begin in July at about 4 cents per gallon and continue to rise, is expected to bring in $4.4 billion in new money for transportation projects over the next six years.

However, that money is in high demand for transit and road projects statewide.

Leif Dormsjo, acting deputy Maryland transportation secretary, said revenue expected from the tax increase will enable the state to finish design work for the Purple and Red lines. The money also could be used to buy right of way, he said.

The increasing tax revenue and streamlining of the state’s public-private partnership rules “are the strongest signs we can send to the federal government and private sector that we mean business when we’re talking about transportation in Maryland,” Dormsjo said.

The state has spent $100 million so far on Purple Line planning and $120 million on Red Line work, Dormsjo said. About 30 percent of the design is complete for both, he said.

While both transit proposals have proceeded through the federal funding process in tandem, Dormsjo said the state likely would build only one at a time. In addition to the financial challenges of building two at once, doing so could drive up costs by limiting competition for the design and construction work, he said.

Brown declined to say which project state officials think might be best suited for private involvement, saying he didn’t want to “prejudge” input from the private sector. However, he said, any public-private partnership would have its limits.

“The state will always retain ownership of the [transit line] and a certain level of control,” Brown said.

The state also is considering building 15 miles of dedicated express bus lanes in the Interstate 270 corridor to connect the Shady Grove Metrorail station with the Clarksburg area. That line, called the Corridor Cities Transitway and estimated to cost $545 million to build, is further behind the Purple and Red lines in planning.

Although the state is seeking federal aid to build the line, developers and commercial landowners in upper Montgomery also are considering ways to help.

Much of the county’s planned economic development in the I-270 corridor, particularly in west Gaithersburg’s biotechnology sector, can’t proceed unless a transit line is built.

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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