Baker plans to let Keolis contract expire

STATE HOUSE NEWS SERVICE

WHILE IT’S UNCLEAR who will be in charge of state transportation policy in six years, Baker administration officials said Thursday their plan would be to allow the MBTA’s contract with Keolis Commuter Services to expire once the eight-year contract term ends in June 2022.

Officials said they would hope to go back out to bid for a vendor to carry millions of passengers per year over nearly 400 route miles.

“Our intention would be to begin a re-procurement process so that it could be completed and a transition – if one were going to even take place – would happen at the end of the current eight-year contract,” Transportation Secretary Stephanie Pollack said Thursday.

Pollack estimated the new procurement process would take two years and the consideration of how to proceed with the procurement would begin in 2019.

Signed in the final year of the Patrick administration, the $2.69 billion eight-year Keolis contract includes two two-year options to extend.

Commuter rail service was a surprise addition to Gov. Charlie Baker’s early term agenda, when record-breaking snow severely hampered rail service in 2015. Baker has not announced his plans but the governor’s office is on the ballot in 2018.

The contract extensions came up during an oversight hearing Thursday conducted by the Transportation Committee, whose House chairman, Mattapoisett Democrat Rep. William Straus, wrote to Pollack in October to suggest the current contract structure was to blame for service problems.

“More than two years have passed since Keolis assumed operations, and their delivery of services, even apart from the 2015 winter issues, has raised a number of management concerns which I believe are derived from the nature of the contract itself,” Straus wrote in an October 2016 letter.

In November, Pollack responded that MBTA officials share many of Straus’s concerns and the “MBTA does not intend for its current commuter rail contract to extend beyond its remaining term, whether the next contract is with Keolis or a different provider; the T is committed to initiating a new procurement on a timeline that ensures that a new contract will be in place no later than the end of the current contract period,” according to a letter obtained by the News Service.

Straus favors a “much longer” contract term, and shifting responsibility for purchasing equipment onto the vendor.

“The question of rolling stock ownership is one that I think is quite interesting. As you know the MBTA owns all the rolling stock. We procure it; Keolis maintains it,” Acting MBTA General Manager Brian Shortsleeve told the Transportation Committee.

Straus called the current arrangement a “halfway relationship and to me an unusual one.”

Keolis Commuter Services General Manager David Scorey told Straus he does not think the current contract hampers Keolis’s performance, and then said there is “nothing that I would say needs to fundamentally change right now.”

In response to a request for comment on the possility of the contract not being extended, Keolis deferred questions regarding the contract to the MBTA.

The train fleet the MBTA supplied Keolis – which has 129,000 weekday boardings, according to a 2016 presentation – includes 240 locomotives and coaches that are at or beyond their 25-year service life.

In July, the MBTA Fiscal and Management Control Board agreed to an additional $66 million in payments over the remaining six years of the contract in exchange for Keolis keeping 90 locomotives in working order along with other maintenance requirements.

Scorey said Keolis now has 87 active locomotives and plans to reach 90 soon.

While acknowledging performance last year had been “well below par” and “below what’s acceptable,” Scorey told the committee improvements have been made more recently. Scorey said there are more locomotives and coaches in service than in many years prior, more conductors and engineers than ever before and more heavy snow equipment than ever before.

“We’re paying Keolis to increase the number of available locomotives. We’re shooting for 90. They’re up to I think he said 87, so that was part of the additional payments,” Pollack told the News Service. She said the T is also paying Keolis to maintain more coaches, and Keolis fines are financing an assistant conductor program that adds to the number of personnel.

Responding to a question about potential commuter rail fleet upgrades by the committee’s co-chairman, Lynn Sen. Tom McGee, Pollack said the T has not yet developed a new comprehensive fleet plan, and in general the control board has “made it clear to staff that they don’t want to make investments until they understand what in fact the long term plan is by fleet.”

“I’ve had a chance to be in other countries and commuter rail is not like commuter rail here, where it’s like the 1930s where you walk up the stairs to get into the train,” McGee said, asking about the potential of swapping out the current diesel fleet for electric trains.

After the hearing, Straus said he hopes a re-procurement will address what he sees as fundamental flaws in the state’s manner of contracting commuter rail.

“They have to maintain and operate vehicles they don’t own,” Straus said. He said, “This contract has a set period, and a new contract hopefully under different terms will be out there, and obviously from the Commonwealth’s standpoint we want as many interested parties as possible to take an interest in running our train system.”