About 300 engineers, financiers and consultants filled a hotel conference room Wednesday to learn how they might help build — and profit from — a $2.15 billion light-rail Purple Line through the Maryland suburbs.
Maryland transit officials are seeking ideas from private companies for ways to finance a 16-mile transit link between Bethesda and New Carrollton with limited public funds. State officials said having a consortium of companies invest in designing and building the line, while also being responsible for operating and maintaining it, would help guarantee a high-quality project that would run well and would last.
“It’s not about coming up with private money just to get something built,” Leif A. Dormsjo, the state’s acting deputy transportation secretary, said outside the conference room. “It’s about taking a longer-term stewardship approach to transit.”
Maryland officials are seeking ways to cover the state’s half of a Purple Line’s construction costs as they seek highly competitive federal aid for the other half. How much of the state’s $1 billion share the private sector would be asked to cover is still under consideration, officials said. Dormsjo said it could be about 5 to 10 percent of the construction costs.
The five-hour, state-sponsored “industry forum” at the Four Points by Sheraton hotel at Baltimore-Washington International Marshall Airport had an air of money to be made and the feel of a job fair.
In this case, the job seekers — engineering firms, soil-testing companies, and environmental and marketing consultants — touted their firms’ expertise. They offered Starburst candies, free pens and granola bars in an effort to catch the attention of those who might soon form joint ventures vying for one of the state’s largest transportation projects.
“We’re here to make money, hopefully,” said James Smith, vice president of Johnson, Mirmiran & Thompson, a Baltimore engineering firm. “There’s a lot of engineering invested in [a Purple Line] — millions of dollars’ worth. We have to go to where the work is, and that’s where it is.”
Stuart Robinson, vice president of A. Morton Thomas & Associates, a Rockville-based engineering consulting firm, said his company is interested in the design work.
“It’s a $2.2 billion project,” Robinson said. “That would, depending on your part in the project, keep some company busy for a year or so just for the design part. Then you’d still have the construction and operations.”
Maryland and other states have begun turning increasingly to public-private partnerships, as tax revenue has lagged behind the needs to maintain aging roads, bridges and transit systems, while also expanding transportation networks to relieve traffic congestion and accommodate growth.
If Maryland decides to use a public-private partnership on the Purple Line, it would be the first for a transit project in Maryland. The state has previously used private companies’ investments to expand the Port of Baltimore and redevelop two travel plazas on Interstate 95.
The Washington region’s most high-profile example is the recently opened high-occupancy toll lanes on Virginia’s section of the Capital Beltway. Two companies paid for most of the toll lanes’ nearly $2 billion in construction costs in exchange for future toll revenues. There is no cap on the toll increases needed to keep the lanes congestion-free.
In any Purple Line public-
private partnership, Maryland officials said, the state would own the rail line and control fares. The joint venture of private companies could pay for some or all of the design and construction costs, which the state would pay back when certain milestones have been reached, officials said.
The joint venture also would recoup its investment over an agreed-upon period as it operated or maintained the line. Because transit systems don’t make a profit, the state would make periodic payments based on whether the rail line met certain performance standards, such as keeping trains clean and on time.
Such an arrangement would ensure that the rail line is well-run and maintained, and would free up some public money during the design and construction phase for other transportation projects, state officials said.
Lt. Governor Anthony G. Brown (D), who recently announced his bid for governor, said a Purple Line would create 2,600 construction-related jobs, spur economic growth and revitalize older communities around stations.
“We need you to work with us so the jobs we create on these big projects go to Marylanders,” Brown told the group.
The state is scheduled to hold a similar “industry forum” June 10 in Baltimore on a proposal to build a 14-mile light-rail Red Line through the city. The cost of that project has been estimated at $2.57 billion to build.
State officials said they hope to begin construction on a Purple Line in 2015 and open it in 2020.