Purple Line partners reach financial close

Written by Jenifer Nunez, assistant editor
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The Maryland Department of Transportation (MDOT), Maryland Transit Administration (MTA) and Purple Line Transit Partners, LLC, have signed the final financial documents on the $5.6-billion Purple Line Public-Private Partnership (P3) contract.

 

This allows Purple Line Transit Partners to proceed to design, build, operate, finance and maintain the 16-mile light-rail system from Bethesda to New Carrollton. Purple Line Transit Partners has secured all its financing for the project, including an $875-million Transportation Infrastructure Finance Innovation Act loan from the U.S. Department of Transportation (USDOT); a $313-million in Private Activity Bonds issued by the Maryland Economic Development Corporation and $138 million from the partners’ own private equity.

“Bond investors’ strong interest and our partners’ private equity investments are a testament to the value and future success of the Purple Line,” said Maryland Transportation Secretary Pete Rahn. “Today’s financial close keeps us on schedule with a fall construction start on the Purple Line that will connect rail and bus, MARC, Amtrak and local buses into a true transportation network for Maryland residents.”

MDOT says this financing secures the savings it anticipated by delivering a cost-effective project that reduced the original cost estimate over the life of the project from $6.2 billion to $5.6 billion. With future fare revenues and local and federal contributions, the project will cost the state less than $3.3 billion over the 36-year life of the agreement while delivering the first P3 light-rail project in the nation.

“The parties that formed Purple Line Transit Partners have a strong record of constructing large projects and vast experience operating and maintaining light rail,” said MTA Administrator Paul Comfort. “This contract will deliver this vital rail project that will strengthen Maryland’s transportation network and will move people more efficiently.”

Construction is on schedule to start late this year with service starting in spring 2022. The Purple Line will run east-west inside the Capital Beltway, with 21 stations connecting to: Metrorail’s Orange, Green and Red lines; the MARC Brunswick, Camden and Penn lines and Amtrak at New Carrollton. Daily ridership is estimated to reach more than 74,000 by 2040. The total construction cost in the P3 contract to design and build the Purple Line is $2 billion.

The federal government has reserved $900 million for the Purple Line in the New Starts Program. MTA is continuing to work with the Federal Transit Administration on a Full Funding Grant Agreement with the hope of finalizing the agreement this summer.

 

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