Maryland Transportation Secretary Pete K. Rahn on Wednesday ordered the companies contracted to design and build the light-rail Purple Line to immediately scale back pre-construction work, saying the state needs to cut costs while it appeals a legal ruling blocking the project.
Rahn said he told the contractor, Purple Line Transit Partners, to stop executing new construction contracts and procuring any nonessential materials and equipment. The contractor was also directed to freeze all hiring of construction staff. The state will stop hiring people to oversee the project and hold off on buying more land for the 16-mile right-of way between Montgomery and Prince George’s counties, Rahn said.
“All parties are directed to limit the obligation of further costs for the Purple Line project to those of agreed necessity,” he said in a statement.
The slowdown — the Maryland Department of Transportation described it as a “suspension of key elements” — comes during a time of uncertainty for the light-rail project, which has been planned in some form since the late 1980s.
Rahn made the announcement one day after the Maryland Attorney General’s Office said it would appeal a May 22 ruling in a 2014 lawsuit opposing the project. The court order requires the state to redo the line’s ridership forecasts to reflect Metro’s decline. The Purple Line would be operated separately from Metro, but about 27 percent of the light-rail line’s passengers are expected to be people transferring to and from the subway.
In a mid-May filing seeking a speedy decision in the lawsuit, Rahn warned that the state would have to suspend Purple Line work starting Thursday unless it had a “foreseeable path” to $900 million in federal grant money. The state won’t be eligible for that money until the project’s environmental approval is restored as part of the lawsuit appeal.
As of Thursday, he wrote, Maryland would “no longer have sufficient cash flow” to keep the project moving in anticipation of being reimbursed with federal aid. The entire project could be canceled about 60 days after a suspension of “ongoing project activities,” Rahn told the court.
It was unclear whether this suspension was enough to start a 60-day clock or what money the state will use to continue ongoing Purple Line work. Rahn’s statement also didn’t expand on a mention that “further steps should be anticipated as more information is available.”
A spokesman for the Maryland Department of Transportation said Rahn was traveling and unavailable for interviews.
In the statement Wednesday, Rahn said U.S. District Judge Richard J. Leon’s final ruling in the lawsuit Tuesday — the judge dismissed two of the three major environmental claims — had given the state a “legal path forward” because it can now appeal the ridership issue.
“MDOT’s and the Purple Line’s situation has changed from the unknown circumstances of just two weeks ago,” Rahn wrote. “With an unknown timeline for an appeal and dwindling available cash to carry the federal reimbursable costs being expended by MDOT, and to protect the taxpayers of Maryland, I am ordering that action be taken immediately.”
Miti Figueredo, a spokeswoman for Purple Line Transit Partners, said about 700 people, both in the contractor’s Riverdale office and employed by subcontractors throughout the country, are working on the final design and pre-construction activities, such as soil borings and surveying.
“We will keep reviewing our activities as we move forward to identify other areas where we can allow work to continue while minimizing costs,” Figueredo said.
The Purple Line, which is estimated to cost more than $2 billion to build, is designed to link inner Washington suburbs with spokes of the Metro system and attract development around 21 light-rail stations, particularly in economically struggling areas of Prince George’s.
Congress has appropriated $325 million toward the Purple Line, but Maryland can’t access that money until a court reinstates the project’s federal environmental approval. The Trump administration also is continuing to consider the project for the $900 million in construction aid even though the project remains stalled in the legal battle.
Supporters of the light-rail project have said they’re concerned that any pullback would slow momentum and make it more difficult and expensive to get the project back up to speed, assuming the state wins the lawsuit on appeal.
Montgomery County Council member George L. Leventhal (D-At Large), a longtime Purple Line supporter, said he was reassured that the state was continuing the project even if it needs to curtail spending until the lawsuit is resolved.
“I’m very concerned” about a slowdown, Leventhal said, “but I’m glad it’s out of Judge Leon’s courtroom, and I hope an appeal can be adjudicated quickly.”
David Lublin, a former mayor of the town of Chevy Chase who once opposed the Purple Line as being too expensive, said he believes the state will win the lawsuit on appeal. Even so, he said he questioned Maryland officials’ “dramatic” statements that the state would lose $800 million in sunk costs and contract termination fees if the project is canceled. Why, he asked, did state officials sign a $5.6 billion, 36-year contract on a rail project that had a pending lawsuit and no federal funding in hand?
“The state seems to have arranged it to make it politically impossible to cancel or delay it,” said Lublin, a local blogger and political science professor at American University. “Would you want to be the governor who has to explain ‘We spent $800 million and got nothing?’”