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A federal appeals court in Washinghton D.C. has paved the way to begin the development of the Maryland's Light Rail Purple Line on P3 sheme, which is planned to be the Washington area’s most important new transit link since the Silver Line.

This court decision reinstates environmental approval for the project, while another court battle continues over a 2014 federal lawsuit that aims to block the light rail line. With this decision the state of Maryland has a fighting chance at reclaiming US$900 million in federal funding for the project.

The Maryland Light Rail Purple Line P3 is a 16-mile light rail line that runs east-west inside the Capital Beltway between Bethesda in Montgomery County and New Carrollton in Prince George's County with 21 stations planned that will provide direct connections to Metrorail's Orange Line, Green Line and two branches of the Red Line, and the MARC Brunswick, Camden and Penn Lines.

In early March 2016,  Maryland Department of Transportation (MDOT) selected Purple Line Transit Partners (PLTP), a consortium composed of Meridiam, Fluor Enterprises and Star America, to develop the project on a design, build, finance, operate and maintenance (DBFOM) basis under a 35-year agreement.

As we reported in June 2016, Purple Line Transit Partners announced the financial closure for the project. The financing included  US$875 million TIFIA loan from United States Department of Transportation and US$313 million of "Green Bond" designated Private Activity Bonds underwritten by JP Morgan and RBC Capital Markets. 

According to MDOT, passenger revenues were expected to reach US$1.36 billion over the life of the agreement, with the fare starting at US$2. However, as we informed in May, a federal judge's ruling delayed the construction of the Maryland Light Rail Purple Line P3 project stating that the project's ridership projections needed to be recalculated in order to account for Metro’s deterioration and declining ridership.

The construction of the line is expected to cost US$1.99 billion. The consortium would finance about half of this expense through the above-mentioned (TIFIA) loan and US$330 million of tax-exempt private activity bonds (PABs).

Additionally, the consortium would contribute a total of about US$140 million in equity, of which Meridiam would provide 70% while Fluor Corporation and Star America would each provide 15%.