As our readership knows, states are increasingly looking to public-private partnerships as a means of construction and development. Maryland is one such state. We previously reported that Maryland had revised its existing public private partnership (“P3”) law to encourage public-private project development in Maryland and address Maryland’s infrastructure needs.
Governor Martin O’Malley has announced Maryland’s first P3 project under the new law, only one month after the law took effect. Maryland is seeking a builder and an operator for the estimated $2.2 billion Maryland National Capital Purple Line light rail transit project that is planned to run through Montgomery and Prince George’s counties from Bethesda to New Carrollton, Maryland. Maryland intends to solicit a single private partner who will be responsible for designing, constructing, operating, and maintaining the project, and the private partner will also help finance a portion of construction. In return, the state plans to offer annual payments over a 35-year contract period (five years of construction and thirty years of operation).
Maryland is set to commit $400 million in construction funding to the project, which contemplates 21 stations along the route, including funding for county bus service, new intersections, and other road work. Maryland also plans to commit $280 million for final design work and right-of-way acquisition. The state is also hoping for about $900 million from the federal government to help construct the project. The Maryland Department of Transportation’s Maryland Transit Administration (“MTA”) anticipates that private funding will be in the range of $400-900 million. The Governor estimates that the project could create more than 9,700 jobs for Montgomery County.
The Look Ahead
After the MTA received strong marketplace interest in a P3 for the Purple Line, the Maryland Department of Transportation issued a Pre-solicitation Report to the Maryland General Assembly in accordance with the revised P3 law. Though Maryland must still jump through a number of administrative and procedural hoops before the project transitions from paper to reality (e.g., budget committee and Board of Public Works review and approval), it is anticipated that a request for proposals will emerge in the coming months. A final request for proposals is not expected until Spring 2014, and construction is tentatively planned to commence in the Summer 2015 with completion in the Summer 2020.
The Purple Line light rail project is the first transportation-based P3in Maryland and represents an exciting opportunity in public-private construction in Maryland. Maryland’s other P3 projects include the expansion of the Port of Baltimore and the redevelopment of two travel plazas along Interstate 95.
Jason C. Tomasulo is Senior Counsel at Cohen Seglias Pallas Greenhall & Furman PC. He focuses his practice on construction law and represents owners, general contractors, subcontractors, suppliers and sureties.