Maryland’s long-delayed Purple Line is getting back on track with the approval of a new design-build team, Maryland Transit Solutions, under a $3.4 billion contract; the total project cost is now estimated at $9.284 billion.
The Maryland Department of Transportation (MDOT) made the announcement on Jan. 26, and said full-scale construction will begin this spring on the 16.2-mile, 21-station light rail project that broke ground in 2017. The Purple Line, which has been plagued with litigation and was originally expected to open this March, is slated to start carrying riders between Bethesda and New Carrollton in fall 2026. (See revised project schedule below.)
The Maryland Board of Public Works approved modifying the Purple Line Public-Private Partnership (P3) Agreement with MDOT, MDOT Maryland Transit Administration (MDOT MTA) and Purple Line Transit Partners (PLTD) to select Maryland Transit Solutions (comprising Dragados USA Inc. and OHL USA Inc.). Commercial and financial close are anticipated in the coming weeks.
PLTP since 2016 has held the P3 Agreement with MDOT MTA to design, build, finance and operate the project. Both recommended Maryland Transit Solutions in November 2021 after a competitive Request for Proposals process. Maryland Transit Solutions replaces lead contractor Fluor as part of PLTP.
The move follows a $250 million settlement that MDOT reached in November 2020 with the three companies connected with PLTP. The conflict centered on delays and $800 million in cost overruns. While Fluor left PLTP, developers and equity partners Meridiam and Star America remained.
Since September 2020, MDOT MTA has managed more than 150 Purple Line contracts and oversaw several key milestones that it said “will benefit the project construction, substantially reducing risk for the new design-build contractor.” This work advanced design components; secured stormwater management permits; and completed numerous outstanding utility relocations, with approximately 66% of all project utility relocations now complete.
While Maryland Transit Solutions will assume most of the 150-plus Purple Line contracts, the Maryland Board of Public Works on Jan. 26 also approved five new MDOT MTA contracts totaling $15.4 million to allow current unfinished work, including utility relocation, concrete and other construction work, to be completed. Additionally, the Board approved a 48-month, $15 million contract modification for the general engineering consultant’s continued technical oversight of design and construction.
Modified P3 Agreement
The price tag for the now modified P3 Agreement is $9.284 billion—up 66% from the 2016 estimate of $5.59 billion (see chart below). It covers payment to Maryland Transit Solutions for design-build work (at a 70% higher cost, MDOT reported, due to the “post-pandemic market,” with material shortages, smaller labor force, and increases in the insurance market, among other factors); to Purple Line Transit Operators for 30 years of line operation and maintenance; to PLTP for management oversight of all elements of the Purple Line for the life of the project; and to MDOT for repayment of debt and equity.
“PLTP will finance the additional project cost through a combination of debt and equity that will be repaid through availability payments made by the state,” MDOT reported. “PLTP also has agreed to reduce its rate of return—essentially what it gets back on the project—by 20%. The P3 Agreement includes operational and performance targets that must be met by the partners in order to receive the full availability payments.”
The P3 Agreement modification also “shortens, clarifies and streamlines the process for any dispute resolution between parties,” MDOT said. “Separate and distinct from the dispute resolution process, the P3 Agreement also was modified to remove the right to unconditionally terminate the P3 Agreement for extended delay (utilized by the previous design-build contractor as a basis to leave the project). The right to conditionally terminate for extended delay also has been narrowed. The contractor can conditionally elect to terminate in the case of an extended ‘force majeure’ event that is out of the control of either party, such as war, an act of terrorism, fire and flood, but that is not a unilateral right and the owner can elect to continue in that event.”
“Despite the challenges over the last several years, we have never lost sight of the benefits of the Purple Line for the residents and businesses in the National Capital Region,” MDOT MTA Administrator Holly Arnold said. “Today’s [Jan. 26] action is the critical step needed to move the Purple Line from construction into an active light rail line that creates a truly interconnected regional transit system. We wouldn’t be here today without the true partnership with Purple Line Transit Partners and the support of our county, state and federal partners to get this project built.”
“Since we and MDOT MTA selected Maryland Transit Solutions as providing the best value to the people of Maryland, we’ve been working closely with MTS to help them hit the ground running,” PLTP Board Chair Jane Garvey said. “We’re very pleased to resume major construction so the Purple Line can begin serving Maryland travelers as soon as possible.”
Once operational, the line will offer links to five branches of Washington Metropolitan Area Transportation Authority’s rapid transit system, three MARC commuter rail lines, Amtrak, and a host of bus services.
What About the LRVs?
CAF USA continues work on the 28 LRVs that will run on the Purple Line. According to MDOT, eight are complete and available for shipment from CAF’s Elmira, N.Y., facility; an additional eight are complete and undergoing static testing; and another eight are being assembled now. In fall 2023, vehicles are slated to start arriving at the Glenridge Operations & Maintenance Facility in Prince George’s County, and in summer 2024, the Test Track is expected to be complete for local testing and operator training.
“In winter 2025, construction is scheduled to have progressed enough to allow system-wide testing, and commissioning activities will be ongoing,” MDOT reported.