LA Looking at PPPs for Metro Expansion

Written by David Burroughs, News & Features Writer, International Railway Journal
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Los Angeles Metro Gold Line.

The Los Angele Metropolitan Transportation Authority (Metro) is considering various financing options, including public-private partnerships (PPPs), in an effort to close major funding gaps as the city looks to expand its rail transit network ahead of the 2028 Olympic Games.

The price tag for a number of projects has ballooned. For example, the cost to extend the Gold Line east of Azusa has increased by 38% to $2.1 billion forcing the Foothill Gold Line Construction Authority to reduce its length by three miles, postponing the construction of two stations, the Los Angeles Times reports.

Metro plans to complete at least five new projects during the decade, including the Westside subway, the Regional Connector subway and a line in the San Fernando Valley. The Los Angeles Times reports that there are also calls for four more major projects to be completed before 2028, including a transit line through the Sepulveda Pass, a rail line to Artesia, an Eastside extension of the Gold Line and a Green Line extension to Torrance.

Accelerating construction of these lines would require $3.3 billion more for construction, interest on an additional $10 billion in debt financing, and $1.2 billion to operate the lines over a decade, the newspaper says, assuming project costs don’t rise.

While Metro is looking to finance these projects through traditional streams such as tax revenue, bonds and grants from federal and state agencies, it is also looking to PPPs as an alternative to cover the funding gaps.

In June 2018, Los Angeles World Airports (LAWA) awarded an ACS Group/Hochtief-led consortium a $4.9 billion PPP DBFOM (design, build, finance, operate, maintain) for an automated peoplemover (APM) at Los Angeles Airport.

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