The state of Maryland and the Purple Line’s private contractor partners recently agreed to settle a lawsuit over cost overruns that accumulated because of delays and changes to the line’s design.
A settlement was recently announced, bringing an end to a legal battle between the state of Maryland and the Purple Line’s private contractor partners. According to a press release issued earlier this week, Gov. Larry Hogan said “the state will pay $250 million to settle with the private Purple Line Transit Partners, which is made up of companies Meridiam, Star America and Fluor.” As part of the settlement, “all outstanding financial claims are settled and the current litigation between the parties is terminated.”
Prior to the settlement announcement, both parties had counter-sued “over $800 million in cost overruns that accumulated because of delays due to other lawsuits and changes to the line’s design.” Now with the settlement, “the public-private partnership will continue with just Paris-based Meridiam and Star America out of Long Island, New York, as its P3 developers and equity partners,” according to the agreement. From there, “the group will then find an overarching design-built contractor to finish the project, instead of Flour and other partners,” according to the settlement.
When commenting on the matter, Hogan said:
“This agreement is a major step toward completing the Purple Line, a transformative project for our state and the region…I would like to thank [Transportation Secretary] Greg Slater and our partners at Meridiam and Star America for coming together to find a path forward that will lead to a new contractor.”
Purple Line Now chimed in and said:
“A negotiated outcome between Maryland and the Purple Line Transit Partners was always the fastest way back on track and we are most thankful.”
Before the settlement, Maryland considered completing the project “on its own and managing hundreds of individual contracts.” Additionally, it was going to “seek another P3 partner for the 16-mile line, which would connect the suburbs of Montgomery County to Prince George’s County from Bethesda to New Carrollton.”
At the moment, the Purple Line is one of the largest public-private partnerships for infrastructure in the country and was supposed to be completed in 2022. In most public-private partnerships, “the private company takes on the burden of risks and costs while the state retains ownership.” Purple Line Transit Partners was supposed to provide partial financing in addition to “designing, constructing, operating, and maintaining the project,” according to the suit. However, Purple Line Transit Partners made it known it wanted to leave the project back in May. This resulted in “months of uncertainty.”
Since that uncertainty, work on the project has continued under the supervision of the state, “including light rail car manufacturing, bridgework, stormwater drainage, paving, utility and pump station construction.” The work will continue until a new design-builder steps forward.
When commenting on the recent settlement, Jane Garvey, the chairman of Meridiam North America and the Purple Line Transit Partners Board, said:
“The months of challenging but always good faith negotiations, led by Secretary Slater, have paved the way for an agreement that will allow the project to move ahead.”