Details of the 35-year Purple Line plan have begun to emerge as the Maryland Department of Transportation prepares to seek state approval Wednesday to pursue it. A consortium of private companies would be expected to contribute $500 million to $900 million to the $2.2 billion project.
The private team would be reimbursed for design, construction and equipment costs as work progressed over five years. The state would then pay the company $100 million to $200 million annually to operate and maintain the line for 30 years. The payments could be reduced if the company did not meet certain standards, such as providing reliable service and clean trains.
The private financing costs would be paid back over time with Purple Line fare revenue, officials said. If ridership on the 16-mile line between Montgomery and Prince George’s counties did not materialize as anticipated, fare revenue from other Maryland transit systems would make up the difference, state officials said.
Maryland transportation officials say such a partnership would take advantage of the private sector’s light-rail expertise and require the companies to assume the financial risks of any construction delays or cost overruns. The efficiencies gained from one private entity overseeing all aspects — from the drawing board to bulldozers to trains on tracks — are projected to save up to 20 percent over 35 years, officials say.
“There’s a really strong incentive for [the private companies] to focus on quality and durability,” said Maryland Deputy Transportation Secretary Leif A. Dormsjo. “They have to really own not just the construction project but also make sure we don’t have surprises once riders start to use it.”
The approach, while considered innovative, is drawing scrutiny. Five U.S. transit projects have used public-private partnerships in some form, Maryland officials say. However, the Purple Line would be the only one besides the Denver project to rely heavily on private financing.
The plan will get its first test of political support Wednesday, when the state Board of Public Works — comprising the governor, comptroller and state treasurer — is scheduled to vote on whether to allow the Transportation Department to seek private proposals.
State Sen. Richard S. Madaleno Jr. (D-Montgomery), who reviewed the plan as a member of the Senate Budget and Taxation Committee, said he considers it a “very risky proposition.”
“It’s attractive. It’s an innovative approach,” Madaleno said. “But we don’t have very many, if any, examples of how this works out.”
Moreover, he said, communities along the line need assurances that a private company would fulfill promises by the state, such as to run trains on a bridge over Connecticut Avenue in north Chevy Chase rather than stopping traffic.