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For Maryland's Purple Line, The Bids Are In — But There Might Not Be A Winner

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A detail of the proposed Purple Line path from New Carrollton and College Park.
A detail of the proposed Purple Line path from New Carrollton and College Park.

When Governor Larry Hogan announced in June that the state would move forward with the $2.1 billion Purple Line light-rail project between Bethesda and New Carrollton, he did not guarantee it would be built.

First, a new funding structure involving Montgomery and Prince George’s Counties had to be resolved, reducing the burden on the state treasury. Then new technical and financial proposals for a less-expensive project had to come from the four private-sector contractor teams competing to build the 16-mile, 21-station line.

Six months after the governor’s news conference, Maryland transportation officials are closer to making the key decisions that ultimately will determine whether the Purple Line is built. On Dec. 8 the four teams submitted their final financial bids, the figures sealed pending a review that is expected to last five to six weeks.

“The bids that we received from the four teams literally are presented in boxes, and so they are extensive. They require a great deal of analysis,” said Maryland Secretary of Transportation Pete Rahn in an interview with WAMU 88.5.

By mid-January the state could have its preferred contractor identified and, pending successful negotiations, make a final selection in February. But Rahn held out the possibility none of the four bids would meet the state’s demands.

“We are hoping that is not the case. We won't know that until a very thorough evaluation of these proposals,” said Rahn, who consistently has refused to name a price target for the four consortiums of private companies.

Competing on cost

The strategy is to force the companies, which include large engineering and construction firms, to compete for the lowest possible figure. The state recommended more than $200 million in changes — including buying fewer trains initially and eliminating one train maintenance facility — to reduce the project’s overall cost.

“We are looking for responsive proposals to the requirements we’ve put out, and we are looking for aggressive pricing,” Rahn said. “We have allowed the teams a great deal of flexibility in the design, and we will see who has taken advantage of that and given us pricing that meets our needs.”

The financial proposals will determine how much of the total cost will be carried as long-term debt. The winning contractor is expected to line up financing through low-interest federal loans to cover the private sector’s contribution to the Purple Line, anywhere from $500 million to $700 million.

Once the line is built, the state will pay the private-sector operator regular payments for 35 years to cover the costs of operations and long-term debt.

Construction could begin next year and is scheduled to take about five years, meaning the Purple Line could open in 2021.


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