Keolis plans to put up fare gates at 3 stations

T, commuter rail operator will split any increase in revenue

THE MBTA’S COMMUTER RAIL OPERATOR received the green light on Monday to launch a five-year campaign to cut down on fare evasion and increase ridership, with the $9 million-a-year cost slated to come from a revenue-sharing arrangement with the transit agency.

The arrangement, approved by the T’s Fiscal and Management Control Board, could have a significant impact on commuter rail riders. Keolis, the commuter rail operator, plans to install fare gates at South Station, North Station, and Back Bay Station. Officials said more fare machines will also be installed at outlying stations and conductors will be equipped with devices allowing them to accept fares electronically on board.

Keolis expects to spend $10 million installing the fare gates and other equipment and $7 million a year for staffing and other expenses necessary to carry out its plan to curb fare evasion and boost ridership. T officials said at least $2 million of the $7 million will be for a marketing campaign to boost ridership. They said customers could be encouraged to use commuter rail to attend events in Boston and noted weekend fares may be adjusted to attract more riders.

Fare evasion is a major problem on the commuter rail system, with loss estimates running as high as $30 million a year. The T also wants to boost ridership, particularly on weekends, when the trains continue to run but with relatively few passengers. The commuter rail operating subsidy is currently $5.10 per trip on weekdays and $33.50 per trip on weekends. The weekend operating subsidy ranges from a low of $17.50 per trip on the Lowell Line to more than $100 per trip on the Greenbush ($108.30), Kingston/Plymouth ($119.50), and Fairmount Lines ($12.20).

Evan Rowe, the director of revenue for the T, said Keolis is currently penalized if its trains run late, if they are understaffed, or if the door systems don’t work properly. But he said the commuter rail operator receives no incentives for improved performance or bringing more riders and revenue to the system, which automatically flows to the T. Under its contract, which expires in 2022, Keolis is paid a flat fee of a little more than $314 million a year

Rowe said the new approach is an attempt to better align the incentives of the T and Keolis, with the up-front costs being absorbed by the commuter rail operator. Officials currently are projecting that the proposed initiatives would bring in as much as $30 million a year – an estimated $20 to $24 million through reduced fare evasion and $6 million through boosting ridership.

Under the proposal, both the T and Keolis would benefit if fare revenues increase. Rowe said the T and Keolis will agree on a baseline level of fare revenue, which will continue to flow to the T no matter what happens with the fare evasion and marketing efforts. The first $9 million in fare revenue above the baseline would go to Keolis to offset its expenditures, and the next $1 million would go to the T.

If revenues come in $10 million to $16 million over the baseline, they would be split 50-50 between the T and Keolis. For revenues $16 million to $20 million above baseline, 60 percent would flow to Keolis and 40 percent to the T. Any revenue between $20 million and $30 million above baseline would be split 25 percent to the T and 75 percent Keolis. Any revenues more than $30 million above baseline would revert to the 50-50 split.

David Scorey, general manager of Keolis.

David Scorey, general manager of Keolis.

David Scorey, general manager at Keolis, said he thinks significant new revenue can be realized. He acknowledged that, if the program is a success, it might position Keolis well to bid on the next commuter rail contract.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Rowe said the risk to the T is minimal. If ridership and fare revenue do not increase, Keolis will absorb most of the cost. He said the T will also own the fare gates at the end of the Keolis contract in 2022.

The Fiscal and Management Control Board approved the arrangement but demanded assurances on how Keolis’s expenses would be accounted for. Board member Brian Lang also asked whether it would make more sense for the T to install the fare gates and keep more of the revenue. His fellow board members convinced him the T was stretched too thin with other projects to take charge of an operation Keolis is better suited to handle.

  • Mhmjjj2012

    It’s mindboggling to think installing fare gates at just three commuter rail stations could result in $20 to $24 million in additional funds a year through reduced fare evasion.

  • Ed Poon

    $10m for installation and $7m per year seems wildly high for throwing up a few sets of fare gates, adding some more fare machines, and adding some basic fare collection technology that is used by every small business and farmers market participant in the country. But hey, these are the folks who brought you the $3b green line extension.

  • Charlie

    The biggest issue with weekend service is not the price. It’s the abysmal schedule.