A Small Step Forward
If you’ve been paying attention to things that I have written over the years, one topic that keeps coming up is privatization of government services. This is particularly true of mass transit, something that I discussed on last week’s episode of Watchdog Wire Radio.
Today the state of Maryland took one step albeit incomplete forward in moving down that road:
Maryland will seek a private company to build and operate a planned $2.2 billion light-rail Purple Line, marking the first time the state has used such financing on a public transit project.
Gov. Martin O’Malley (D) plans to make the announcement about the 16-mile transit link at an event in Bethesda on Monday. The governor also plans to highlight more than $1 billion in new funding for transportation projects in Montgomery County, administration officials said.
The package includes a $400 million state commitment for construction of the Purple Line, as well as more funding for county bus service, new intersections and other road work in one of the most congested regions in the state.
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The package includes a $400 million state commitment for construction of the Purple Line, as well as more funding for county bus service, new intersections and other road work in one of the most congested regions in the state….
Maryland officials are counting on the federal government to cover about $900 million of the project’s construction cost and will look for contributions from local governments and the private sector as well, said Erin Henson, a spokeswoman for the Department of Transportation. Construction could begin as early as 2015.
With the Purple Line, Maryland is seeking a single private partner to design, construct, operate and maintain the project. In return, the state plans to offer annual payments throughout a 30- to 40-year contract period. Deductions would be made from the payments if the operator falls short on standards such as on-time performance, cleanliness and customer service, according to transportation officials.
A transit agency that expands its bus fleet gets the support of the transit operators union. But an agency that builds a rail line gets the support of construction companies, construction unions, banks and bond dealers, railcar manufacturers, electric power companies (if the railcars are electric powered), downtown property owners, and other real estate interests. Rail may be a negative-sum game for the region as a whole, but those concentrated interests stand to gain a lot at a relatively small expense to everyone else.