Posts about Purple Line
To pay for the Purple Line, Maryland wants to use a form of "public-private partnership," or P3. Accomplishing this will require some complex accounting.
This form of financing is more expensive than bonds issued by the state, but it may allow the state to borrow money that doesn't count against its debt limit and free up funds for other transportation projects. Under a P3, a private operator would get those funds from equity investors and lenders.
Maryland has committed $900 million towards the $2.2 billion Purple Line, including $680 million from this year's gas tax increase. The federal government may contribute an estimated $900 million, and Montgomery and Prince George's counties will contribute as well. This leaves the state somewhere between $200 and $400 million short.
The state's debt limit applies to all debt that will be repaid from tax revenue. But the Purple Line will run at a loss, and thus tax funds must ultimately pay for construction. So the Maryland Department of Transportation devised a complex financing structure to get out from under the limit.
Fares from riders on the Purple Line will go not to the private company that builds and operates it, but into a special state fund. Meanwhile, the Transportation Trust Fund will pay the operator for the cost of running and maintaining the light rail line.
The operator will get a second payment, a so-called "availability payment," from the fare fund. Its amount will depend on how well the light rail line performs. This money will go to repay the lenders and investors who put up money for construction.
It's not clear whether this arrangement will pass muster, and MDOT has yet to work out all the details. On September 12, the agency requested guidance from the state's Capital Debt Affordability Committee on "parameters for structuring the availability payments to avoid classification as tax-supported debt that would impact the State's debt affordability analysis."
One issue is whether it's proper to separate operating costs from fare revenue. There can't be fare revenue without the state's ongoing expenditure of tax money to run the Purple Line.
Tax money supports the Metro much as it will support the Purple Line, but Metro does its accounting differently. WMATA subtracts revenues from operating costs and calls the difference its "operating subsidy." State and federal aid derived from taxes pays for new construction. If the P3 did its accounting like WMATA, MDOT would pay its construction debt with tax money.
A second question involves 'equity' investors. About $180 million of the Purple Line's construction costs is supposed to come from this source. These investors will get compensation from a share of the availability payments, plus operating profits and minus losses.
What will happen if the operations of the Purple Line are not up to snuff, and MDOT cuts its availability payments to the operator? The investors are likely to be large institutions whose managers get bonuses based on each quarter's returns. They might well push for a cutback on maintenance to generate operating profits in the short term.
That would surely be bad for riders. And would it not divert tax money meant for rail maintenance into repayment of construction debt?
Whether or not it avoids the debt limit, P3 financing will be more expensive than direct state borrowing. A private entity set up to run the light rail line will not have Maryland's AAA credit rating. The Maryland Department of Transportation also asserts that a P3 would manage the rail line better, resulting in lower construction and operation costs, but it does not promise any net savings. Indirect borrowing for the Purple Line is only wise if the other transportation projects it pays for are worth the money.
The federal government is still closed, but this week you can still talk about how climate change affects your health, get updates on the Purple Line, explore the changing character of Brookland, and help to make Florida Avenue safer at events across the region.
Update on the Purple Line: Tomorrow, the Action Committee for Transit hosts Mike Madden of the Maryland Transit Administration for the latest news on the Purple Line at its monthly meeting. Governor Martin O'Malley recently announced that the state will seek a public-private partnership to build and operate the line, which could start construction as early as 2015 if it gets federal approval this fall.
The meeting will be at 7:30pm on Tuesday, October 8 at the Silver Spring Civic Building, located at the corner of Ellsworth Drive and Fenton Street, just a few blocks from the Silver Spring Metro. For more info, visit ACT's website.
Brookland: Old and New Again: Join CSG for a walking tour to learn about the changes happening around DC's Brookland neighborhood this Saturday, October 12th, starting at 10am outside the Brookland-CUA Metro station. Learn about the impact that new construction and renovation of vacant buildings is having on residents and visitors, and what other changes are coming soon. To stretch your legs and learn more about this evolving neighborhood, RSVP for the tour here.
It's finally Florida Avenue's time: The District Department of Transportation will hold the second of three meetings on the Florida Avenue Multimodal Transportation Study next Thursday from 7 to 9pm at the Jordan Student Academic Center at Gallaudet University, 800 Florida Avenue NE. The purpose of the study and plan is to ensure the corridor is safe for all users including people who walk, bicycle, drive, and use transit. For more information, visit DDOT's website.
Climate change and your health: Join award-winning science and health journalist Linda Marsa and Bob Deans, Director of Communications at the Natural Resources Defense Council, for a conversation about the public health implications of climate change. Marsa will discuss her new book, Fevered: Why a Hotter Planet Will Hurt Our Health - And How We Can Save Ourselves, along with topics including green infrastructure and setting limits on pollution.
The event will take place at 6:30pm tonight at Busboys and Poets, 1025 5th Street NW in Mount Vernon Square. For more information, visit the event's website.
The federal government may be closed, but this week you can still
talk about the future of Franklin Park, celebrate walkable urbanism with the Coalition for Smarter Growth and author Jeff Speck, and explore Bus Rapid Transit on Rockville Pike at events across the region.
Join us for happy hour: Tonight, join GGW contributors and readers for the latest installment of our regular happy hour series in Arlington. From 6 to 9pm, we'll be at Fire Works Pizza at 2350 Clarendon Boulevard, just two blocks from the Court House Metro station. As our commenters duly noted, they're running happy hour specials until 6:30pm.
Party with CSG: Tomorrow night, the Coalition for Smarter Growth hosts Jeff Speck, author of Walkable City, at its annual social and fundraiser. The event will feature refreshments and runs from 6:30 to 8:30pm at Eastern Market. Tickets are only $25 and proceeds will help CSG continue their work to strengthen walkable and inclusive communities in our region. To learn more or RSVP, visit their website.
Franklin Park's new future: [Note: Due to the shutdown, this event has been postponed until further notice.] Also tomorrow, the DC Office of Planning and its Franklin Park partners will hold a kick-off public presentation and open house about how to turn Franklin Park into one of the country's premier urban parks. Come share your ideas for how to improve and enhance the visitor experience of the park. Attendees will hear a project overview and an initial site analysis and conditions report. The project team also will hold a visioning and programming workshop to gain a deeper understanding of desired park uses and current issues.
The meeting will be from 6 to 8pm at the Four Points by Sheraton at 1201 K Street NW. You can RSVP at the project's website.
Talk about BRT on 355: Do you live, work, or travel along Route 355, also known as Wisconsin Avenue and Rockville Pike? Join CSG, Communities for Transit, and other local organizations hosting an educational event for residents and business owners along 355 between Friendship Heights and Clarksburg. Speakers will include Montgomery County Planning Board member Casey Anderson, county planner Larry Cole, and Chuck Lattuca, BRT system manager at the Montgomery County Department of Transportation.
With 44,000 projected riders by 2040, a BRT line along 355 is likely to move forward early on in the development of Montgomery's rapid transit network. The event will take place on Thursday, October 3 from 6 to 9pm in the cafeteria of the Executive Office Building at 101 Monroe Street in Rockville. Click here to RSVP or for more information.
Update on the Purple Line: Next week, the Action Committee for Transit hosts Mike Madden of the Maryland Transit Administration for the latest news on the Purple Line at its monthly meeting. Governor Martin O'Malley recently announced that the state will seek a public-private partnership to build and operate the line, which could start construction as early as 2015 if it gets federal approval this fall.
The meeting will be at 7:30pm on Tuesday, October 8 at the Silver Spring Civic Building, located at the corner of Ellsworth Drive and Fenton Street, just a few blocks from the Silver Spring Metro. For more info, visit ACT's website.
To power the Purple Line, Maryland will have to build power-converting substations along the 16-mile route. Transit planners plan to help the structures blend into existing neighborhoods by disguising them as single-family homes.
"Houses" like this one in Toronto could appear along the Purple Line. Photo from MTA.
According to a recent Washington Post article, the Purple Line will require multiple support structures and buildings, including 14 signal bungalows, or small buildings with radio and signal equipment, and a nine-story ventilation tower in Bethesda. There will also be 18 of what the Maryland Transit Administration calls traction power substations, which would feed power to the electrified rails.
Spaced at one mile intervals, these facilities house equipment to convert alternating current carried along high voltage transmission lines to the direct current used by trains. The buildings would be about 50 feet long and 14 feet wide.
Recently, people living along Wayne Avenue in Silver Spring got their first glimpses of the substations. Because they have the potential to introduce visual and noise impacts into quiet residential areas, some neighbors are concerned. In an interview with the Post, resident Anne Edwards described one substation proposed for the corner of Wayne and Cloverfield Road as an "industrial monstrosity."
Because the Purple Line is a federally-funded transportation project, MTA was required to prepare an environmental impact statement. According to the document, which is open for comments until October 21, the line's preferred alternative along Wayne Avenue is a highly sensitive visual corridor. The proposed substations would be visually intrusive, according to the MTA analysis, and the equipment housed in each is expected to emit "transformer hum" sounds.
MTA plans to mitigate the substations' visual and noise impacts with insulation to prevent equipment noise from leaking out and by camouflaging the buildings to make them appear like single-family residences. According an MTA flyer on the substations posted at the Purple Line website, "The substations can be screened with fencing, landscaping and, as appropriate, the MTA will identify further measures to minimize their presence or make them blend in with the environment."
Typical light rail substations are basic windowless boxes. They have all the architectural appeal of a cargo container or a construction trailer. That's why the MTA will make Purple Line substations look like single-family homes instead.
In an April email to a Silver Spring resident that was posted on various community listservs, Purple Line project manager Mike Madden noted that these substations can be found in residential neighborhoods around the US and the world. The MTA can design the buildings to "be more square in shape," making them look more like houses, and give them landscaping and lawns in front, just like a normal house.
The substation designs MTA distributed include a brick veneered building that looks a lot like the ranch houses or ramblers common in Montgomery County neighborhoods developed after World War II. Utilities and transportation companies around the world have used tricks like this for more than a century to minimize the visual impacts of unsightly infrastructure.
Photographers love engineering simulacra like the proposed Purple Line substations. Historic building facades conceal massive substations built to power New York City's subways. Some of these were captured in Christopher Payne's 2002 book, New York's Forgotten Substations.
In 1987, Canadian photographer Robin Collyer began documenting transformer houses, also called "bungalow-style substations," throughout Toronto. Each one was built "in a manner that mimics the style and character of the different neighborhoods," Collyer wrote in 2006.
Closer to home, Pepco built transformer houses in residential neighborhoods in the Colonial Revival style popular at the time as early as the 1930's. According to a 1954 Washington Post article on Pepco's program, the company identified neighborhoods with increasing electricity demands and then went to work designing the faux homes. Pepco employees photographed existing homes surrounding the proposed sites, then a company architect designed compatible substation buildings.
Efforts to conceal infrastructure in the Washington metropolitan area weren't limited to power substations. Today, telecommunications facilities disguised as pine trees, dubbed "monopines," or as flagpoles and building bulkheads are found throughout the area and the nation. There's even a monopine at Mount Vernon.
One of the earliest examples of concealed telecommunications infrastructure in Washington is the 1947 Western Union Telegraph Company microwave terminal in Tenleytown. Architects and engineers went through several designs to minimize the tower's visual impact to the established neighborhood.
One design that included a clock mounted in the fašade was discarded and the plain limestone clad tower that still looks out over 41st Street NW was completed with no apparent complaints from neighbors. The former Western Union tower was designated a District of Columbia historic landmark in 2003.
The Western Union Telegraph Company building in 2002. Photo by the author.
It's far too soon to know whether the Purple Line's faux home substations will inspire future generations of photographers or if at some point they may be considered historic. It is fair to say that once they are completed, they may be better neighbors than occupied "real" homes.
MTA will mow the lawns and keep the exteriors neat. Neighbors can rest assured that there won't be any wild parties or competition for street parking. And it's not likely that the new neighbor will be coming over asking to borrow a chainsaw or generator the next time a storm rolls through.
The Bethesda Purple Line station is currently planned to squeeze into an existing tunnel below the Apex Building on Wisconsin Avenue. But planners are now considering an alternate plan to tear down the building and redevelop the entire site.
Between Silver Spring and Bethesda, the Purple Line will run along the Georgetown Branch, a former railroad line. While Montgomery County bought most of the rail line for transit and a trail, years ago the railroad sold the development rights above the tracks in downtown Bethesda. Now there are two buildings atop the rail corridor, the Apex Building and the Air Rights Building.
The Purple Line will pass easily under the Air Rights Building, but the Apex Building needs to accommodate a station. And while the tunnel there was designed to carry tracks, it wasn't originally built with room for much more. The structural columns supporting the building come down into the rail tunnel, severely constraining the space.
Planners can squeeze a station in the existing space, but the result is a narrow platform crowded with building columns.
Meanwhile, there are other problems with the existing arrangement. There's not enough room in the tunnel for both a light rail station and a bike trail, so county planners explored moving the trail to the surface.
Also, building a subway station under the Apex Building would complicate any potential future redevelopment prospects. Since the Apex Building is only 5 stories tall, it's already shorter than most other buildings nearby, and it will become a prime redevelopment candidate after Bethesda becomes a key transfer point between the Purple and Red lines.
Redeveloping now could solve the problem
The new proposal suggests tearing down the Apex Building, building the Purple Line station in a new custom-built trench, adding a 2nd tunnel for the trail, and then allowing the owners of the Apex Building to replace it with a bigger building. Montgomery County is currently in talks with the owner of the building, and is working through a minor master plan amendment to determine the density and height.
If the new plan is approved, all the pieces will work together better. The Purple Line station will be simpler and more spacious, bike riders will have an uninterrupted dedicated trail, and one of the most transit-accessible properties in Montgomery County can be redeveloped at a more appropriate density.
It would be win/win/win. As long as this doesn't delay the rest of the Purple Line, I say let's do it.
Cross-posted at BeyondDC.
The Purple Line is necessary to finish the Capital Crescent Trail, which currently ends over a mile west of its planned terminus at the Silver Spring Metro station. But if CSXT doesn't agree to give up the land where the trail would go, Maryland may simply give up on it.
Finishing the trail requires CSXT's cooperation
Last week, the Maryland Transit Administration released its final environmental impact study (FEIS) for the Purple Line, explaining in detail how the light rail line between Bethesda and New Carrollton will work and what impacts it will have. MTA will collect public comments and give them to the Federal Transit Administration, which will then issue a Record of Decision on whether to continue design development and acquiring land.
The FEIS raises a major issue about completing the Capital Crescent Trail into downtown Silver Spring that has not drawn much attention before. Today, the trail runs between Georgetown, Bethesda and Lyttonsville, 1.5 miles west of the Silver Spring Metro station, with an interim trail along local streets for the rest of the way. Current plans call for building the Purple Line alongside the trail between Bethesda and Lyttonsville, then extending the trail to Silver Spring along the east side of the Red Line tracks.
Planned route of the extended CCT with the Purple Line "Preferred Alternative." Image from the Maryland Transit Administration.
Most of the land required for this is already publicly owned, but there are a few sections where it would need to use CSXT owned right-of-way. However, CSXT's general policy is to not allow trails in its right-of-way. MTA sent CSXT a letter last November requesting that they make an exception for this project, but CSXT has still not granted one to date. The FEIS says that if CSXT doesn't want to let the state use the right-of-way, the CCT won't be built.
According to the FEIS, if the two parties can't reach an agreement by the time construction on the Purple Line begins, MTA would simply rebuild the existing Capital Crescent Trail between Bethesda and Lyttonsville and keep the interim bike route on local streets. MTA and Maryland appear ready to give up on working with Montgomery County to complete the CCT into downtown Silver Spring if it cannot get CSXT's land for the trail.
This could be devastating to the CCT and regional trail network. There would be no off-road trail connection to downtown Silver Spring, no continuous off-road trail between Silver Spring and Bethesda, and no connection to the Metropolitan Branch Trail, forming a complete off-road "bicycle beltway." The off-road CCT extension that has been promised in every Georgetown Branch Trolley and Purple Line concept study and planning document for more than two decades would be no more than a broken promise.
There is an alternative way to finish the trail
The FEIS presents a false choice: either get CSXT cooperation for the preferred trail alignment entirely in the corridor, or give up on building any off-road trail and dump the CCT onto local streets at Talbot Avenue. But it is possible to complete an all off-road CCT into downtown Silver Spring without CSXT cooperation.
A "Plan B" trail would be as safe and nearly as direct as the trail would be on the preferred alignment, and could be less expensive to build. Since most of the preferred route is already on public land, small adjustments could move it out of the CSXT right-of-way completely.
This aerial map shows that it is possible to bring the CCT down 4th Avenue, just a few feet east of the CSXT right-of-way, and behind the Woodside Mews townhouses to Lyttonsville Road. Lyttonsville Road is a dead-end street and extra-wide for the little traffic it carries. It can easily have a "road diet" width reduction to free the space needed for an off-road CCT while still leaving room for traffic lanes and on-street parking.
After turning south onto 16th Street, the trail can descend below the overpass This would give us the much desired grade-separated crossing under 16th Street, but may require "taking" approximately 12' of land from the Park Sutton and a few feet of right-of-way from CSXT on the west side of the street. The 16th Street Bridge must be rebuilt for the Purple Line, so the state must engage CSXT in right-of-way and construction issues at this location regardless of the trail.
If that doesn't work, another option is to cross 16th Street at a new light at Lyttonsville Road, then go down the east side of 16th Street to the CSXT. This would stay well clear of any CSXT right-of-way at the 16th Street Bridge, and would require little or no additional space along 16th Street. An at-grade trail crossing of 16th Street would be much safer at Lyttonsville Road than the existing on-road trail crossing at Second Avenue, because this crossing would be shorter, would have very little turning traffic, and could use the wide median for a "safety refuge".
From there, the trail could join the publicly owned 3rd Avenue right-of-way, which is continuous from 16th Street to Fenwick Place and is already part of the preferred route. There is other private and public right-of-way that can be used for the trail from Fenwick Lane to the Metro Plaza Building at Colesville Road.
The trail does appear to need a small amount of CSXT right-of-way at Metro Plaza, but the Purple Line will already be using this area to cross over the existing rail tracks in a structure shared with the trail. It is unlikely CSXT would try to block putting a trail here.
This avoids the only portion of the CSXT corridor where their "cooperation" is essential to building the CCT's preferred alignment, a small section behind the Park Sutton condominium at Lyttonsville Road and 16th Street. The preferred route would be relatively isolated behind the building, built behind a high retaining wall and a crash wall for trains.
By placing it on street for a short segment, "Plan B" would be only a few hundred feet longer, and it can be more inviting, more visible, and more accessible over most of its length. The cost to build the bypass route should be lower than the cost of the preferred trail route, because less retaining wall would be needed and the CSXT crash wall would be eliminated.
Looking down Lyttonsville Road from the Woodside Mews Townhomes toward 16th Street. Photo by the author.
"Plan B" has already won community support
The CSXT bypass route is a key part of the off-road "interim" trail planned years ago and described in the M-NCPPC report "Facility Plan for the Capital Cresent & Metropolitan Branch Trails," approved by the Planning Board in January 2001 and available online on the Coalition for the Capital Crescent Trail website. Representatives from nearby communities, trail user groups, Planning Department staff, and professional trail design group Lardner and Klein developed the plan.
At the time, plans for the single-track Georgetown Branch trolley, proposed to run from Bethesda to Silver Spring, had fallen by the wayside and it appeared that no transit would built along the corridor anytime soon. But shortly after this study was approved the movement for transit came to life again as the Purple Line. The "long term" part of "interim trail" went away, and with it the support for spending millions to build it.
David Anspacher, trail planner for the Planning Department, has recently begun to examine the "Plan B" bypass concept. He has circulated this and other alternative CCT route ideas among planning staff for comments, and has asked trail design consultants Toole Design to include this in an evaluation of CCT alternatives they are doing for the department. This work becomes ever more important as CSXT continues to withhold its cooperation on the trail.
"Plan B" needs to become a feasible option for the CCT
If we allow MTA to give up so easily on the Capital Crescent Trail and it proceeds to build the Purple Line with no consideration for a possible "Plan B" trail, we may get no trail at all. What can trail advocates do?
For starters, you can submit comments on the Purple Line FEIS, pointing out that there are options for an off-road CCT that bypasses the CSXT right-of-way, should it refuse to cooperate on the trail. Ask MTA to commit to designing and building the best feasible off-road CCT extension into downtown Silver Spring, in coordination with Montgomery County, consistent with the promises it has made to the community for over two decades.
Also, you can contact the Montgomery County Executive, Council, and Planning Board and let them know there are options for completing a good off-road CCT that do not require CSXT right-of-way. Ask them to accelerate study of "Plan B" options to be ready in case CSXT blocks the preferred CCT alignment. Tell them that we expect them to keep the promises they have given to us for many years to complete the CCT, and this trail is much too important for them to give up so easily.
A version of this post appeared at Silver Spring Trails.
This week, celebrate the new 11th Street bridge, learn how DC could become the nation's cycling capital, Metro's plans to run buses all night, and how to live a greener life at events all around Greater Washington.
New 11th Street Bridge: On Saturday, Mayor Gray and DC officials will dedicate the bridge with a festival from 12-3pm on the local span featuring music, performances, and food trucks. Click here for more information.
Talk about bikes in Arlington: Dr. Ralph Buehler, professor and author of City Cycling, will talk about ways to promote biking with Shane Farthing of WABA, Arlington County board member Chris Zimmerman, and our own Jaime Fearer. The event will be on Thursday, September 12 at 6:30pm at the Virginia Tech Research Center, 900 N. Glebe Road in Arlington. Visit their website for info or to RSVP.
After the jump: Learn about the Purple Line in Bethesda and how Montgomery County's demographics are changing. And if you have any events for future roundups, email me at email@example.com.
Could Metrobus run all night?: Next week, the Action Committee for Transit hosts Jim Hamre, head of bus planning for WMATA, who'll talk about plans to increase late-night bus service. That meeting will be at 7:30pm on Tuesday at the Silver Spring Civic Building, One Veterans Place in downtown Silver Spring. For more information, visit their website.
Green Living Expo DC: Over 40 exhibitors, workshops, and eco-tours will offer information on bike lanes, home energy-saving resources and government grants, green roofs, urban forests, and more. The event will take place at the University of DC's Dennard Plaza on Saturday, September 7th from 10 am to 4 pm. Visit greenlivingdc.org for more info.
Going Purple in Bethesda: Montgomery County planners are exploring potential design options for routing the Purple Line and the Capital Crescent Trail near Wisconsin Avenue and want public input. The event will take place at the Bethesda Regional Services Center, 4805 Edgemoor Lane on Saturday, September 7th beginning at 10 am. Find out more information at the Planning Department's website.
Discuss Montgomery County's future: The Committee for Montgomery will host a forum on the county's rapidly changing demographics featuring Metro's head planner Shyam Kannan and Gwen Wright, director of planning at the Montgomery County Planning Department. The discussion will happen on Monday, September 9 at 8am at Building 1 of the Universities at Shady Grove in Rockville. For more information or to RSVP, visit their website.
Earlier this week, Maryland Governor Martin O'Malley announced plans to build and operate the Purple Line using a public-private partnership, also known as a P3. What does that mean for riders and taxpayers?
A P3 is a partnership between a government agency (in this case, the Maryland Transit Administration) and a private firm (called a "concessionaire") to build and operate an infrastructure project. Many P3s are toll roads, like the new Beltway HOT lanes in Northern Virginia. But transit P3 projects are fairly new to the United States. Currently, the only example in the nation is in Denver, which is using one to build almost 70 miles of rail projects.
The details of the public-private partnership won't be hammered out for some time, so there's still a lot we don't know about what this method of construction and operation will look like. But a recently-published "presolicitation report" from the Maryland Department of Transportation (MDOT) tells what they have in mind.
What is a P3?
Essentially, the idea is to leverage private capital and the efficiency of private firms to reduce the public cost of building and operating a project. It also helps the agency by making costs more predictable and assigning risk to the private contractor. MDOT currently estimates that they could save about 20% of the cost of constructing and operating the Purple Line for 30 years by entering into a P3.
While they aren't common in the United States, our neighbors in Canada use them a lot. One notable example is Vancouver's new Canada Line, opened in 2010, though it's not without its criticism.
Where do the savings come from?
In P3s, the cost savings come primarily from two factors: private firms may be more efficient, and risk may be more properly assigned and managed.
One way projects end up wasting money is through "interface problems." For example, a crew comes out to string catenary wire, but they discover that the catenary supports haven't been installed yet. That risk is still there with a P3, but since the contractor has assumed the risk, it's their problem, not the public's.
Meanwhile, the contractor, which is likely to be a major firm, may be able to leverage their other investments to get a good deal on steel. Or they might have a subcontractor who builds railcars, which saves them from having to do a separate procurement.
How will this P3 work?
In a few months, MTA will ask qualified contractors to submit bids to operate the Purple Line. These bids will be very detailed, and MTA will use a "best value" method to pick the contractor, not necessarily picking the cheapest bid.
Each prospective concessionaire will include their estimate for what they can build the Purple Line for, plus what they think it will cost them to operate and maintain the line for 30 years. MTA estimates that the selected contractor will also put in between $400 to $900 million. The agency will put in additional money, as will the federal government, through the New Starts program.
MTA will pay the contractor an annual "availability payment," which equals the contractor's contributions plus the operating costs the contractor estimated in their bid, divided by 35 (5 years of construction, plus 30 years of maintenance). During construction, the contractor will have to take out a performance bond that MTA keeps in case they can't complete the project. If they go out of business after construction is complete, MTA would have to rebid the contract.
Will the concessionaire hike fares or cut service to make a quick buck?
MTA, not the concessionaire, will set the fares, service hours, and train frequency.
The concessionaire wouldn't make money from this, anyway. Like all transit lines in the United States, the Purple Line will not earn enough fare revenue to be profitable. If the contractor can provide their services for less than what was budgeted, they'll keep the difference as (additional) profit. But if they go over budget, they'll lose money.
How will Maryland hold the operator accountable?
MTA will write very detailed requirements in the contract setting performance standards for on-time performance and cleanliness. If the operator can't meet these standards, the MTA could pay them less. That gives the operator a financial incentive to provide good service.
What will the concessionaire be responsible for?
The concessionaire's responsibilities can differ from one P3 to another, but the private firm selected for the Purple Line will be responsible for completing design, building the project, acquiring railcars, and then operating the line for 30 years.
Will the private firm own the line?
No, the state of Maryland will own the Purple Line. After 30 years, the firm operating the line will be responsible for giving it back to the state in a certain pre-specified condition. At that point, the MTA could decide to operate the line on its own or rebid the project to a different firm or even the same firm.
Why is the Purple Line a good choice for a P3?
The Maryland Transit Administration's operations, including local buses, light rail, and subway, are primarily focused in Baltimore, 30 miles from the Purple Line. Because it's so far away, the MTA would likely need a new management and operations structure just for that one line, meaning it would basically stand alone. That makes it a good candidate for a P3, as opposed to the Baltimore Red Line, which interacts with several other MTA services and is much closer to home.
According to the MTA's Henry Kay, the Purple Line's risk profile is well suited to the private sector. In many cases, there will be tight quarters and traffic management plans. There's lots of risk that those conditions will delay the project or make it more expensive. One overarching contractor can better manage that risk than a public agency with multiple contractors. And if the contractor can't manage the risk well, it's their money, not the state's.
There are other risks, like unpredictable weather or even subway tunneling, which are difficult to manage. Contractors may be reluctant to assume the risks of building the Baltimore Red Line, with its long downtown subway. That makes it a less likely candidate for a P3.
Why consider a P3 for transit at all?
Using a P3 for the Purple Line will allow the MTA to spend a little less up front for the project, allowing Maryland to make better use of its gas tax revenues for projects around the state.
According to the MTA's
Assistant General Manager Executive Director for Transit Development and Delivery Henry Kay, the P3 will be more predictable for MTA. For example, once MTA grants the contract, they'll know exactly how much it will cost to run the line every year for 30 years. If energy costs go up or labor costs go up, the contractor is on the hook. But the state will always pay the same price, unless the contractor fails to meet their performance targets (in which case, Maryland would pay less). That could help keep fares and tax rates in check.
Of course, there are risks in a P3. The contractor could go bankrupt, or they could fail to deliver what they promised. MTA's goal is to provide good transit service, and they need to find a reliable partner who they can hold to the same high standard. Over the next several months, the MTA will release a Request for Proposals and companies will respond, allowing us to get a better understanding of how this P3 might work.
Since public-private partnerships for transit are generally untested in the US, communities and transit agencies across the country will watch the Purple Line to see how well they work. Hopefully, it will set the bar high.
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