Report: MD Purple Line construction to require $650M more than proposed

Dive Brief:

A Maryland legislative analysis of the construction costs for the Purple Line light rail system to the Bethesda suburbs could add $650 million to the initial contract's price tag, bringing the building costs to $2.65 billion, which does not include financing costs, The Washington Post reported.
The previous $1.99 billion cost estimate for construction and design did not include $447 million of other expenses — such as buying rights of way and overseeing construction — and it did not factor in the $198 million in planning costs the state has already spent, analysts said.
The $5.6 billion Purple Line contract is one of the largest public-private partnerships (P3s) in the U.S., and, according to The Post, is the second to incorporate private financing. State officials said the P3 would last 36 years, including 30 years of maintenance.

Dive Insight:

Fluor-led Purple Line JV Partners won the contract for the project in March. According to previous reports, the state will contribute $159.8 million in upfront construction costs, Prince George’s and Montgomery counties will contribute $330 million, and the federal government will pay $900 million in 2016 and, potentially, another $125 million in 2017.

The private companies involved in the project as part of the P3 will design, build, operate and maintain the line, and the state will reimburse construction costs and make monthly payments contingent on the companies satisfying specific service conditions.

The project is expected to get final approval from the Maryland Board of Public Works this month, paving the way for the finalization of the contract and a notice to proceed in late 2016. The Purple Line is slated to start service in the spring of 2022 and will include 21 stations.

Fluor, one of the largest construction companies in the U.S., also recently won a $1.9 billion Arizona Department of Transportation highway project as part of another P3 joint venture, Connect 202 Partners. The Fluor-led joint venture will design, build and maintain a 22-mile stretch of the Loop 202 freeway in Phoenix.