The Maryland Board of Public Works unanimously approved on Wednesday a $250 million settlement payment to the construction companies working to build the Purple Line light rail in the state’s Washington suburbs.
It’s a move that could hasten the completion of the now $5.8 billion project, which has been mired in delays, cost overruns and legal disputes.
The settlement ends all outstanding litigation in Baltimore Circuit Court surrounding the Purple Line. It also salvages Purple Line Transit Partners, a public-private partnership that has managed the project.
It comes after a contractor quit the project earlier this year, halting much of the construction. After that, the state took control of some construction in hopes of keeping the project moving forward.
The 16-mile, east-west line, which is planned to connect the Bethesda Metro station in Montgomery County to the New Carrollton Metro station in Prince George’s County, was initially scheduled to begin operations in 2022. But one of the project’s contractors has indicated it now isn’t likely to carry passengers until 2024.
The construction companies will receive the first $100 million of the settlement by Dec. 31.
As part of the agreement, Purple Line Transit Partners, composed of Meridiam and Star America, will work closely with the state to seek a replacement design-build contractor. That process is likely to take several months.
“We’ve laid out six months for the design bid process, and then an additional three months to go through the financing aspects of that,” state transportation secretary Greg Slater said during Wednesday’s meeting. “We don’t think it’s going to take quite that long.”
Slater said his department has received a “tremendous amount of interest from potential bidders” for the project.
“We feel really confident and comfortable about that,” Slater said.
If the state doesn’t secure a new contractor, the agreement would be terminated, Slater said.
During Wednesday’s meeting, Republican Gov. Larry Hogan, who chairs the board, said the agreement is likely to save taxpayers money, since the construction companies initially sought $800 million for cost overruns.
“In April, some people just wanted us to pay the $800 million to keep things going. I think we’re going to end up with a much better situation, deliver the product and save the taxpayer $500 million,” Hogan said.
The state won’t have an updated cost estimate for the project until the new contractor is selected, Slater said.
Jane Garvey, chair of Meridiam North America and of the board of Purple Line Transit Partners, applauded the board’s action in a statement Wednesday.
“We thank the board for their careful, thoughtful action today. We now have a clear path to initiate an accelerated, open and transparent process to bring on a replacement design-build contractor,” Garvey said. “Working hand-in-hand with the state, we will begin that effort without delay in order to deliver the Purple Line to the people of Maryland as soon and efficiently as possible.”
Christophe Petit, president of Star America Infrastructure Partners, said at the time the settlement was first announced that his company was looking forward to the selection of a new contractor to help complete the project.
“We look forward to working together to select a new design-builder, reducing the risks to that completing contractor, and rebuilding our operations and maintenance team,” Petit said.