RTD is back on track after a four-month delay with its plan to privatize two FasTracks corridors, a key element in its strategy for managing the under-funded transit program that was hit by huge cost increases the past few years.

At a public hearing Tuesday night, the RTD board heard from just a handful of people, all of them in favor of proceeding later this month with issuance of a request for proposals – RFP – to three pre-qualified trams of bidders. That is scheduled for Sept. 30, pending on formal board approval Sept. 15.

Click here to view the RTD staff presentation to the board on the initiative, called Eagle P3.

The transit agency is depending on a successful privatization plan that would attract private equity to help close the current $2.2 billion gap between the escalating cost estimates and the projected revenues to meet the original 2017 completion date.

The privatization plan includes the East Corridor to Denver International Airport and the Gold Line to Arvada and Wheat Ridge, along with some other elements. The successful team would provide financing, design and construction, and receive the rights to operate and maintain them for 40 years.

Map shows the FasTracks East Corridor line in yellow from Denver Union Station to Denver International Airport.

It breaks out the two lines separately, with construction of the DIA line first and the start of the Gold Line contingent on the second phase being feasible. In any case, both lines would start service no later than Dec. 31, 2016. It is up to the bidding teams to propose an acceptable starting date.

In the original FasTracks plan, the DIA line was to open by the end of 2014 and the Gold Line by the end of 2015.

The proposal will ask the bidders for firm fixed cost data for design and construction of the airport line, but only 2010 constant dollar costs for the Gold Line. The cost would depend on the schedule, over which those costs would be inflated to the year that the various elements would be built.

RTD wants bidders to submit their proposals by March 31 next year, with RTD evaluating them and the board selecting a winner by June 15. While work on the DIA line and other Phase 1 elements would start by August 2010, RTD would have until the end of 2011 to decide whether to proceed with Phase 2 and the Gold Line. By that time, the agency figures its financial picture will be much clearer.

The plan conserves RTD’s financial resources because rather than paying for construction upfront, the transit agency repays the winning team over the 40 years in the form of “availability payments” based on the construction and operation of the system.

The plans also hinges on RTD receiving $1 billion in federal transit New Starts grants, another iffy situation since the federal transportation authorization that contains New Starts expires at the end of the month and Congress hasn’t made clear how it intends to renew the program.

View RTD Proposed Commuter Rail Maintenance Facility in a larger map

Map shows the site where RTD proposes to build a rail yard and building to maintain heavy-rail commuter cars for four FasTracks commuter rail corridors, including the one to DIA.

The package includes not only the 22.8-mile airport line and the 11.2-mile Gold Line, but track and electric work as far as south Westminster on the Northwest Rail commuter train line, bound for Boulder and Longmont, construction and operation of a commuter rail maintenance facility planned for a site at 48th Avenue and Fox Street, south of the railroads’ Utah Junction, provision of all the heavy-rail self-propelled electrified passenger cars required for the planned level of service, new park-n-Rides, electrical signal and communications systems, and operation of the lines for 40 years.

RTD has dubbed the public-private partnership plan Eagle P3. Eagle is a combination of the corridor names East and Gold.

Although many in the public refer to RTD’s FasTracks plan as light rail, four of the lines actually are heavy rail. Three of them were planned as heavy rail even during the 2004 public vote. Heavy rail refers to train vehicles that meet more stringent federal crash-safety requirements, and look like commuter rail cars of systems back east such as Philadelphia’s SEPTA suburban trains or the Long Island Railroad. They are self-propelled passenger cars with operator cabs at either end for running in either direction.

Map shows the path of the FasTracks Gold Line commuter rail corridor in yellow, serving North Denver, Adams County, Arvada and Wheat Ridge.

They are called “multiple units” as they can be coupled together in a larger consist of several cars. East, Gold Line and the North Metro Corridor to Commerce City and Thornton are proposed to use overhead electrical lines. The Northwest Rail Corridor to Westminster, Broomfield, Boulder and Longmont are planned for diesel-powered cars.

RTD and the communities it serves, along with citizen input, is trying to determine how to complete FasTracks. Among the options is to go to the ballot in November 2010 and ask voters for another 0.4-cent sales tax increase, doubling the original FasTracks tax. Other options include building whatever can be afforded by 2017 and ending there, or extending the schedule and building lines to completion as the current revenue streams permit, which one estimate places at 2034.

Tuesday’s hearing was a courtesy one, rather than a required one, as RTD maneuvers through a process of its own design. Still, despite the controversy and challenges of FasTracks’ cost increases and sinking finances – which have led its critics and now some of its supporters to question the program – no opponents showed. All of the speakers supported the proposal to package the two corridors into a single project to be bid on by at least three private consortiums of engineering firms, contractors, transit operators and financiers.

While the projected cost of FasTracks has skyrocketed, very few of the costs have already been incurred. The West Corridor light rail through Denver, Lakewood and Golden is under construction, with a project budget of $707.6 million.

The current $6.9 billion estimate for the total program represents cost calculations of future work that, as has been shown in the last three years, have fluctuated pretty wildly. RTD performs annual evaluations of the remaining program and fixes new baseline costs.

RTD also annually evaluates its revenue for FasTracks, and while costs have risen precipitously, the economic situation with the recession has taken a big bite out of the projected revenues from the 0.4-cent regional sales tax that helps fund FasTracks. All earlier projections turned out to be too high, and RTD anticipates having to again lower its projected revenue. That impacts the pace and schedule of work RTD can put out, and imperils the 2017 completion date.

The solicitation also contains a requirement for the private teams to plan for transit-oriented development, although RTD says control of development on public lands and revenues derived from it will remain with RTD.

RTD initially had planned to put the RFP on the street in May, but delayed it because of several factors, including the uncertainty over the federal transportation reauthorization, a lawsuit filed by transit advocates over RTD’s configuration of FasTracks lines and services at Denver Union Station and the search for an acceptable location for the maintenance yard and building the private consortium would build.

The three consortiums in the hunt are:

Denver Transit Partners. Fluor Enterprises, Macquarie Capital Group, Ames Construction, Balfour Beatty Rail, Alternate Concepts, HDR Global Design Consultants, Arup, Gannett Fleming, Orrick Herrington & Sutliffe, Interfleet Technology and Romero and Wilson.

Mile High Transit. John Laing, HOCHTIEF PPP Solutions, Bombardier, Flatiron Corp., Archer-Western, Aldridge Electric, DMJM-Harris/AECOM and CH2M Hill.

Mountain-Air Transit Partners. Babcock & Brown, Siemens, Veolia, Kiewit, Herzog, Stacy and Witbeck, HNTB Corp., Mass Electric Construction Co., Millibank Tweed Hadley & McCoy, Citi and Merrill Lynch.