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Maryland DOT Secures $5.6 Billion in Funding for Purple Line
Maryland DOT (MDOT); its public transportation subsidiary, Maryland Transit Administration (MTA); and Purple Line Transit Partners LLC, the private partner of MDOT for the light rail project, recently signed the final financial documents on the $5.6 billion, 36-year Purple Line P3 contract, the nation’s first P3 light rail project, officials said.
MTA is responsible for managing and implementing the Purple Line project. MDOT is providing MTA with the state funding it needs and the P3 procurement was jointly under MDOT-MTA’s name, but MTA manages the work and the project team is all MTA staff or consultants.
The Purple Line Transit Partners have secured all its financing for the project, including an $875 million federal TIFIA loan, $313 million in private activity bonds issued by the Maryland Economic Development Corporation and $138 million from the partners’ private equity.
In addition to the TIFIA loan, MTA is working with FTA on a Full Funding Grant Agreement (FFGA) that would provide $900 million from FTA’s Capital Investment Grant Program. MTA also will use $36 million of FTA Urbanized Area Formula Grant funds for the project.
“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 DOT Secretary Pete K. Rahn. “Today’s financial close keeps us on schedule with a fall construction start on the Purple Line that will connect [WMATA’s] Metro rail and bus, MARC [commuter rail], Amtrak and local buses into a true transportation network for Maryland residents.”
This financing secures the savings MDOT anticipated by delivering a cost-effective project that reduced the original 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.
“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.”
By completing the financial close milestone, all public and private sector partners have cleared the way for the Purple Line Transit Partners to proceed to design, build, operate, finance and maintain the 16-mile, 21-station system, which is owned by MDOT. Construction will begin late this year on the east-west corridor, which will connect suburbs in Montgomery County with those in Prince George’s County. Service is expected to start in spring 2022, and daily ridership is estimated to reach 74,000 by 2040.
Purple Line Transit Partners is led by three P3 developers and equity investors: Meridiam Infrastructure Purple Line LLC, Fluor Enterprises Inc. and Star America Purple Line LLC.
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