Tuesday, January 29, 2013

Tribune: Companies 'enthusiastic' about partnership for Red, Purple Line projects

Also noted here is the possible savings by CTA "getting out of the fare-collection business". Of great interest to us here is how private-public partnerships could help build the CTA Red Line extension to 130th Street amongst other projects:
The CTA is receiving strong and enthusiastic feedback from the private sector about investing in two mega-projects along the Red and Purple lines that the transit agency could not afford to undertake on its own for many years, CTA President Forrest Claypool said Monday.

CTA officials and financial adviser Goldman Sachs are studying potential public-private partnerships to construct the proposed Red Line extension to 130th Street, and to demolish and rebuild track, aging stations and crumbling viaduct structure on the North Side, from north of the Belmont station through Evanston, Claypool told a gathering of transportation experts at Northwestern University.

"We believe that partnerships with the private sector are one piece of the key to keeping mass transit healthy,'' especially in a period of declining federal and state funding, Claypool said.

The response to the CTA's outreach to the financial industry on the two Red Line projects has been "overwhelmingly enthusiastic,'' Claypool said. The CTA's goal is not to sell off assets but rather to lower costs by 10 percent to 20 percent on major projects, he said.

Both proposed Red Line projects are in planning stages, but they are unfunded for the construction phase, officials said.

The approximately five-mile south extension of the Red Line, from the current terminus at 95th Street to 130th, is estimated to cost at least $1.5 billion. Mayor Rahm Emanuel said when he was campaigning for office that the Red Line extension was his top transit priority and he expected construction would begin within a few years.

Cost estimates on the Red Purple Modernization project range from about $2 billion to more than $4 billion, depending on the scope of the work that would be undertaken to replace infrastructure that is more than 90 years old, officials said. The north branch of the Red Line serves the largest ridership in the CTA rail system, and the transit agency is spending $86 million on temporary repairs to shore up dangerously dilapidated infrastructure.

Claypool said the CTA was not interested in privatizing the operation of the Red Line or selling it off to the private sector. Instead, any deals would involve a public-private partnership to design, build, finance and maintain the rail line, but CTA employees still would run the trains, he said. In return, the venture partners would assume part of the financial risk of building two complicated projects and receive "a small potential share'' of profit.

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