A deal resetting Maryland’s relationship with its private partners for the $2-billion Purple Line light rail project was approved Dec. 16 by the state’s Public Works Board. The thumbs-up formally settles a protracted legal dispute over responsibility for millions of dollars in cost overruns for the 16-mile, 21-station project across the Washington, DC suburbs and clears the way for a new design-build contractor to take over major construction.
The three-member board, chaired by Gov. Larry Hogan (R), an ardent Purple Line supporter, unanimously OK’d a $250-million settlement finalized last month with the concession, Purple Line Transit Partners, to pay it an initial $100 million by Dec. 31 and the remaining $150 million by the end of next year, or upon completing a new financial agreement once a contractor is in place.
That milestone could occur as early as next September according to Maryland Secretary of Transportation Gregory Slater. Money for the settlement will be taken from the state Transportation Trust Fund, which leaves uncertain what will remain for other projects around the state.
PLTP—originally made up of Meridiam, Star America and Fluor Corp.—had sought $800 million in overruns resulting from multiple delays that have left the Purple Line only 40% complete and more than two years behind its original 2022 completion target.
Fluor, the original design-build team leader, withdrew from the project this past summer, and subsequently relinquished its 15% equity stake in PLTP as part of the November legal settlement.
Slater expressed confidence about finding a new design-build contractor to get the Purple Line back on track, telling the board that the state has received “a tremendous amount of interest from bidders.”
Although a revised completion schedule won’t be announced until the new contractor is on board, he said the state will work with the reconstituted building team to explore applications of accelerated construction techniques that may help mitigate any further delays.
For now, Maryland’s transportation agencies will continue to oversee a scaled-back construction effort involving several dozen contractors and suppliers that remained with the project following Fluor’s departure. Slater said most of those firms will likely continue their roles under the new design-build team, with existing project labor agreements remaining in force.
Also to be determined is how much the change in design-build leadership will affect the Purple Line’s final construction price tag.
Slater said the state hopes to recoup some of the extra costs by renegotiating the state’s federal TIFIA loan to benefit from lower interest rates, and upping the amount of required periodic payments to PLTP during the consortium’s 30-year operations and maintenance concession.
