Purple Line Will Be Late and Overbudget

Local officials are “astounded,” astounded I tell you, that Maryland’s Purple Line will be nearly a year late and at least $215 million over budget. The line is being built under a public-private partnership contract, which transit officials claim saves money. But apparently they forgot to write into the contract that there could be no cost overruns. (In fact, public-private partnership contracts are mainly a way of avoiding legal debt limits, since private partner borrowings don’t count against the public partner’s debt even though the contract obligates the public to pay the private partner enough to repay the debt.)

Until recently, the state of Maryland, which is overseeing the project, has claimed that the line would open on time, that is, by March 2022. But now the private partners have informed the state that it cannot possibly open before February, 2023.

The 16-mile light-rail line was supposed to cost $2.0 billion, which was a condition of getting support for the project by Maryland Governor Hogan. But the Federal Transit Administration says it will really cost $2.4 billion, which includes some costs that the Maryland Transit Authority hid from the governor. That’s at least $500 million more than it was expected to cost back in 2011. The latest overrun will increase the total cost by nearly 10 percent.

Purple Line supporters blame a lawsuit brought by opponents for the delay and extra costs. But the lawsuit was expected to delay the project by no more than eight months, and state officials originally thought it wouldn’t delay it at all.
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It doesn’t really matter what caused the delay. Ridership on the line is going to fall well short of expectations, which were bloated beyond credibility in order to make the project eligible for federal funding. The original projections were that the line would carry about 48,000 weekday riders in 2030, but the FTA said that its high cost and low ridership meant that it was cost effective. Maryland responded by coming out with a new estimate that it would carry 68,000 riders in 2030.

Maryland has a long history of overestimating ridership, so even the 48,000 trips per weekday was dubious. For comparison, New Jersey’s Hudson-Bergen line, which is about the same length but serves cities with far more jobs and much higher population densities, carried about 52,000 weekday riders in 2017. (It also spent $188 million on operations and maintenance and collected only $15 million in fares.) Considering the growth in ride hailing and the possibility of driverless ride hailing, the Purple Line is not going to come close to those ridership numbers, though it could easily match Hudson-Bergen’s operating losses.

In any case, considering that previous Maryland rail projects have also been overbudget, local officials should be anything but astounded that this project is late and overbudget. The astounding thing will be if there are no further overruns or hidden costs.