Meridiam-led team wins $2bn Purple Line project

A consortium led by the French fund manager has emerged as preferred bidder more than two years after Maryland began the procurement process.

Maryland's Department of Transportation (MDOT) has selected a consortium led by Paris-based Meridiam Infrastructure , to finance, develop, design, build, operate and maintain the $2 billion Purple Line Transit project.

While the procurement process has dragged on for more than two years , Meridiam, along with infrastructure fund manager Star America and US developer Fluor Enterprises, has remained steadfast in their interest in the project.

The 16.2-mile light rail line will run east to west inside the Capital Beltway – between Bethesda in Montgomery County and New Carrollton in Prince George's County – with 21 stations. In addition, the Purple Line will provide direct connections to four branches of the Washington Metropolitan Metrorail system, as well as connections to three regional commuter rail lines and Amtrak's Northeast Corridor.

Originally conceived while Governor Martin O'Malley was in office – with $700 million allocated from the state budget – the project was put on hold when O'Malley's successor, Larry Hogan, announcedthat Maryland would be contributing $168 million to the project , giving priority to the repair and maintenance of bridges and roads instead.

At the time, Hogan said that he would be instructing MDOT to move forward with a more cost-effective and streamlined version of the project.

On Wednesday, Governor Hogan's office said MDOT had met the three criteria needed for the Purple Line project to move forward. These included securing additional support from local governments, reserved federal funding and aggressive pricing from the winning team.

“Following negotiations with Purple Line Transit Partners, an agreement has been set that will see the state's upfront expenditure for Purple Line construction cost drop to $159.8 million – $8 million less than the $168 million threshold Governor Hogan originally announced,” according to the statement.

The state has been able to save about $550 million overall, in part due to a reduction in the average annual availability payments. These will amount to $149 million as opposed to an earlier estimate of $167 million over a 30-year period. According to MDOT, the total cost of the Purple Line project, including construction, operation and maintenance and availability payments, amounts to $5.6 billion.

Prince George's and Montgomery counties, which are expected to benefit most from the light rail project, have pledged a combined $330 million in cash and non-cash contributions, while $900 million has been earmarked from the federal government's New Starts funding programme.

Meridiam, which will provide 70 percent of the equity, expects the project to reach commercial close in the first quarter and financial close in the second quarter of this year.

Construction is expected to begin in late 2016 with completion of the project slated for spring 2022.

“Our team is excited about being part of such a transformative project that will bring strong tangible benefits, such as tremendous increased fluidity to the community and the metropolitan region at large,” said Jane Garvey, chairman of Meridiam North America.

Based in Paris, Meridiam also has offices in New York, Toronto and Istanbul.

It currently manages $3.8 billion worth of assets, which include the Port of Miami Tunnel, the Long Beach Courthouse and the ports of Calais and Boulogne-sur-Mer in France. Meridiam is also part of a consortium that last May was awarded New York's LaGuardia redevelopment project.