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CTA chief sees public-private partnership for Red Line extension

The CTA's Red Line ends 95th Street. The CTA plans extend it 130th Street.  |  Brian Jackson~Sun-Times

The CTA's Red Line ends at 95th Street. The CTA plans to extend it to 130th Street. | Brian Jackson~Sun-Times

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Updated: March 2, 2013 11:45AM



CTA President Forrest Claypool said Wednesday he’s convinced that a public-private partnership will be a piece of the puzzle when it comes to finding the $1.5 billion needed to extend the Red Line to 130th Street.

Mayor Rahm Emanuel campaigned on a promise to complete the five-mile extension but the CTA has not yet figured out how to pay for it.

Instead, the financially-strapped mass transit agency has hired Goldman Sachs to investigate what’s known in the industry as a P3 or “public-private partnership.”

What the CTA is considering is nothing like the widely-despised, 75-year, $1.15 billion deal that privatized Chicago parking meters. The CTA is not talking about selling off assets or privatizing operations.

Instead, private contractors with a breadth of construction expertise would be hired to design, build, bankroll and maintain the Red Line extension for a fixed price. When it’s done, the CTA would run it.

“A big international company — oftentimes with a local partnership — [is] willing to take a greater share of the risk in the belief they can deliver the project faster and cheaper than if you go through the normal processes governments have to go through. That’s what’s going on in Denver right now,” Claypool said.

“They accept the risk up-front and, if there are cost overruns, they’re on them — not on the taxpayers. They believe they have a more competitive business model.”

Claypool said the private sector response to the Red Line extension and a proposed, Red and Purple Line overhaul with a pricetag as high as $4 billion has been enthusiastic. He firmly believes it’ll be part of the mix.

But he said, “Public-private partnership is one small piece of large infrastructure project…It is one part. It’s not a substitute for public money. It is not a substitute for public investment. These projects usually need local, state, federal, and private dollars to work. Denver is a good example of that.”

Claypool was asked whether CTA riders using a Red Line extension to 130th could some day be asked to pay higher fares in exchange for the longer ride.

At one point Claypool said, “We try to maximize all revenue sources.” Then, he said, “Fares are completely unrelated. This is infrastructure.”

Emanuel pointed to new stations being built at 95th Street, at Wilson, at Loyola, and at Clark and Division — and all of the slow zones the CTA is eliminating. He also talked about hundreds of buses and rail cars being purchased or rehabilitated.

“Every one of those are critical investments. We’re putting local money together, state money and federal money, creating jobs and creating economic opportunity for the city. Not one of them are part of P3, but we will look at creative ways of trying to achieve those goals,” the mayor said.



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