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Hogan Offers Reassurances on Purple Line, Accuses Firm of ‘Gouging’ Taxpayers

A partially-completed bridge looms over Riverdale Park in Prince George’s County. It will eventually carry the Purple Line over Kenilworth Avenue near East-West Highway. Photo by Bruce DePuyt.

In his first public comments on the Purple Line since the collapse of the state’s relationship with its prime contractor, Gov. Lawrence J. Hogan Jr. (R) pledged that the rail project will resume — and that it will be completed.

“We’re going to continue to move forward,” Hogan said. “We have a whole group of great construction companies that want to finish the job. The state is going to finish the job.”

A bitter dispute between the state and its prime contractor, Purple Line Transit Constructors, over nearly $800 million in cost overruns, has brought work on the 16-mile Montgomery-Prince George’s line to a halt.

The two sides are now suing one another in court.

The governor said “there may be a delay as we switch over, but it’s much better than having an operator in there that’s not getting the job done [and] that’s overcharging the taxpayers.”

PLTC won the right to pull its workers off the job after a judge in Baltimore ruled last month that the contract allowed the company to do so — over the Maryland Department of Transportation’s objections — because the stalemate had dragged on for more than a year.

PLTC is a consortium of firms that came together to build the Purple Line. It’s comprised of industry giant Fluor, Lane Construction Corp. and Traylor Bros, but Hogan, speaking to reporters at a State House news conference, hammered “the construction firm” handling the project. An aide said he was referring to Fluor.

“The construction firm that was doing the Purple Line is having some serious financial difficulties and they have had problems across the country with a number of their contracts,” the governor said.

“They also have been sued because they’ve been overcharging other states. They were trying to overcharge the taxpayers for hundreds of millions of dollars that we didn’t feel was adequate.”

The state must decide how to resume the project.

Officials have said they could enter into a new public-private partnership to replace the original 36-year agreement with PLTC and Purple Line Transit Partners, the project’s financiers. They could bring the massive project in-house, or they could settle with PLTC.

“We’re still in negotiations to figure to what the final solution is going to be,” Hogan told reporters.

A successful developer before entering politics, Hogan is no stranger to the rough-and-tumble world of high-stakes negotiating, both public and private.

Many local leaders believe that the only way to avoid months of delay and stagnation is for the state and the contractor to resolve their differences. Despite Hogan’s harsh rhetoric about PLTC, he appeared to hint that a settlement could still come about.

“I believe the banks that were ready to foreclose on this operator have agreed to a forbearance for 30 days so that their financial situation is not as desperate,” he said. “They’ve directed them to come back and negotiate with us. If there’s a possibility of solving the serious disputes with this firm, that’s a possibility, but if not, we don’t have much time to waste negotiating with them; we’re going to move forward and get it built without them.”

A request for comment from Fluor on Thursday evening was not immediately returned.

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Hogan Offers Reassurances on Purple Line, Accuses Firm of ‘Gouging’ Taxpayers