Legal Review: Purple Line Put on Hold

Like much of its history, Maryland’s Purple Line light-rail project has hit another snag in its development.

Recently, the construction’s contractor group terminated its deal with the state due to over $800 million in unpaid cost overruns. This means Maryland will need to completely pause its work on the light-rail project connecting Maryland communities from Bethesda to New Carrollton for the time being.

After a lengthy legal battle, the state will shift its efforts into finding contractors and figure out how to balance transportation budget restrictions over the next six months. Unfortunately, this delay means that Marylanders won’t be riding on the purple line until 2024, at the earliest.

Given the numerous setbacks and the implications for Maryland taxpayers and Metro riders alike, here is an overview of recent Purple line developments.

The Litigation

Back in September, Purple Line Transit Partners, the group building the project, sued the state for breach of contract, seeking more than $100 million. The contractors sought to obtain compensation for the state’s requirements to hide subsequent delays within public project schedules and refusal to pay for delays.

That lawsuit served as a counterclaim against the Maryland Transit Administration, which was filed for more than $75 million in damages for the contractors’ “illegal notice” in leaving the project undone. The state cited $800 million in unpaid cost overruns and more than 2 ½ years of construction delays in its rationale.

Ultimately, the judge’s decision came down to whether or not the contractors may terminate the contract due to extended delays. With enough evidence that the state efforts inhibited their ability to continue the project efficiently, a judge allowed the contractors to terminate the contract.

New Agreement

Recently, the Board of Public Works in Maryland approved a new $250 million legal deal to reactivate the project within nine months. The state claims the plan is about 40 percent complete and refinancing will only take about three months before construction can resume. Still, actual work on the project may not resume until a new contractor is brought on board, which is expected to take around six months within a larger one year frame.

Under the payment agreement, Maryland will pay the first $100 million of the settlement before 2021. Soon thereafter, the remaining $150 million will be paid within 12 months, depending on when the state formally replaces the contractors.

A Legal Perspective

To help sort through this complicated litigation process, Attorney Seth Price helps explain the factors at play.

“The settlement came about because of disagreements over construction scheduling and funds,” says Attorney Seth Price. “For the contractors, there was a certain expectation that the state would allow progress and pay for delays when such disruptions were inevitable. With a breach in that expectation, the contractors were able to bring a breach of contract lawsuit against the state.”

What’s Next for the Purple Line?

Right now, the Purple Line’s progress is at a standstill with crews securing the work areas for safety. Eventually, the state will find a new set of contractors and begin development once again.

With these delays and funding concerns, however, there is no set due date for the Purple Line’s completion. Some estimates suggest late 2024, but with a project so disrupted and unreliable as the Purple Line, Marylanders know there are no guarantees.