DRPA light-rail plan costlier than one city rejected

Did Philadelphia miss a chance for a cheaper, faster way to get a streetcar line along the Delaware River waterfront?

In October, city officials endorsed a plan from the Delaware River Port Authority for a light-rail line along Columbus Boulevard with a connecting line on Market Street to City Hall.

But last year, they rejected a similar proposal for a privately built line with a lower price tag and an earlier completion date. That plan also would have included service to the Navy Yard and the South Philadelphia sports complex, which are just future options in the DRPA plan.

Rina Cutler, deputy mayor for transportation, said the earlier proposal had a number of problems, including an unrealistic time frame and a public-private partnership not permitted under current law.

"In addition, if we were to ever consider a public-private partnership, we would be required to do a public bid," Cutler said. "I think a public-public partnership has more of a chance of actually happening, so that is what I am supporting."

The public-private plan was proposed by a group that included builders, operators, and financiers involved in the Hudson-Bergen light-rail line and River Line in New Jersey, the Houston Metro light-rail line, and transit systems in Ireland, Spain, France, Sweden, and Australia.

The Philadelphia light-rail line was proposed to be run by Veolia Transportation, a French company that operates rail systems in Los Angeles, Boston, South Florida, and northern San Diego County.

The public-private plan was priced at $430 million, including service to the Navy Yard and sports complex, but not to Center City. The DRPA plan is estimated to cost $500 million, including service to Center City, but not to the Navy Yard or the sports complex.

The public-private plan was to be completed in 51/2 years, including project development, environmental assessment, final design, and construction.

The DRPA line, if it gets the necessary funding, could be ready for operation in about 61/2 years - in early 2016, DRPA and city officials have said.

The lead consultant for the Philadelphia Riverfront Transit Group was Frank M. Russo, who was senior director of new rail construction for NJ Transit in the 1990s and a structural engineer for SEPTA in the 1980s. He oversaw construction of NJ Transit's Hudson-Bergen light-rail line, a publicly funded, privately operated route that started running in 2000.

Philadelphia "told us, 'We don't like the project, and we can't afford it,' " Russo said. "Well, if they don't like it, why are they doing it? And if they can't afford it, why are they proposing one that costs more?"

One significant difference could be the funding source.

In the plan Mayor Nutter endorsed, DRPA has financial responsibility for the line. DRPA, which gets most of its revenue from tolls on its four Delaware River bridges, says it hopes to obtain federal assistance, although that would likely require a change in Federal Transit Administration funding standards.

The public-private partnership the Russo group proposed did not have a firm financial plan. It suggested some city and state funding, with the government's recouping some of the costs by taxing developers, casinos, and real estate owners who would benefit from a bustling waterfront. The Russo group proposed to put up $20 million in initial funding.

Cutler said she did not see a budget she thought would work for the Russo group proposal.

"It will require a large amount of public dollars for a privately run enterprise; there is no current mechanism under law that would allow us to enter into a [public-private partnership] deal; and I do not believe the time frame is realistic," Cutler said.

Russo, whose plan is defunct because the backers have moved on, said his group first proposed the public-private partnership about 21/2 years ago. The city turned it down in October 2008, he said.

He disputed Cutler's assessment of its financing and feasibility. He said that the city could have used the funding mechanism it has now and that the FTA encouraged public-private partnerships through a pilot program.

"The city enters into development agreements and franchise agreements all the time," Russo said. "The law is clear about their ability to enter into a contract like we proposed."

As to the city's objection that public bidding would be necessary for a public-private project, Russo said, "We figured they would need to go through a procurement process, and we were willing to compete."

He predicted the DRPA proposal would founder.

"It's political talk at this time," Russo said. "They'll get enough money to throw out for studies, but at some point, you'll look back and see $50 million, $60 million, $100 million for a pile of paper and have nothing to show for it."

DRPA chief executive officer John J. Matheussen disagreed, saying the project is "very doable."

"We're in it for the long haul to get it done," Matheussen said. "It's clearly a project that we're very serious about."

He said that it remained possible a public-private partnership could work for the DRPA project and that a private operator could run the streetcar line.

"Who operates it, who builds it, we're not certain yet," Matheussen said. "It could be a design-build, or it could be SEPTA or PATCO. We just don't know yet."