T approves $212m hike in fare collection contract

THE MBTA OVERSIGHT BOARD on Monday unanimously approved a $212 million amendment to its contract with a pair of private vendors to develop, install, and manage a new fare collection system, bringing the total cost to just over $935 million.

T officials cautioned that the fare collection initiative is still contingent on the vendors refinancing at a lower cost their existing debt on the project and any new debt needed. The officials said the project could be put on hold again if a successful refinancing holding costs stable is not accomplished in the next few months.

The amended contract approved by the Fiscal and Management Control Board would give the T a lot more flexibility in how it collects fares in the future, but its high cost has prompted a number of advocates for low-income riders to question whether some of that money could be better spent by reducing or eliminating fares all together.   The $935 million cost represents about 12 percent of the $8 billion in fares the T expects to collect between 2025 and 2034.

As an offshoot of that concern, the advocates raised concerns that the fare system will be used to gather information to crack down on subway riders who don’t pay their fares – a group made up predominantly of people who cannot afford the cost of a ride.

The original $723 million contract was signed with Cubic Corp. and John Laing in 2018 and the project was supposed to be up and running by next year. But in December the T acknowledged the original timetable was way out of reach and set about revising the contract and establishing a new timetable. The new agreement calls for the project to be phased in by 2025 and run through 2034.

The contract will outfit the T with a cashless fare system relying on Charlie Cards and contactless credit cards. Riders on buses and Green Line cars will be able to board at any door by tapping their cards when getting on and off. The system will also give the T a lot more flexibility in assessing fares, possibly even basing fares on income level.

“This is really a strategic investment in our future,” said Laurel Paget-Seekins, the T’s assistant general manager for policy.

Ron Renaud, the T’s chief transformation officer, said the contract protects the T in a number of ways – by timing payments to the achievement of project milestones, by delaying all but 5 percent of the payments until the system is up and running in 2025, and by allowing a reduction in payments if operating performance is substandard.

“If something goes sideways or wrong we’re at least financially protected,” said Renaud.

Transportation advocates had been worried that some low-income riders would be left behind by the shift to a cashless fare system. Judging from public testimony at Monday’s meeting, that concern appears to have subsided as the T promised to increase the number of CharlieCard vending machines, where cash can be loaded on to the cards, from 315 to 1,400.

Staci Rubin, a senior attorney at the Conservation Law Foundation, was one of several transportation advocates who urged the board to delay the vote to allow more review of the 3,000-page contract.

She also raised concerns about new contract provisions that will allow the T to retain data on individual transactions and travel for an extended period of time. Paget-Seekins characterized the change as an effort to help those appealing fare evasion citations, but Rubin said the provisions appears designed to bolster more aggressive fare evasion enforcement at the T.

Under current regulations, Rubin said, the T charges $100 for an individual’s first fare evasion citation, $300 for a second, and $600 for the third and others beyond that. She said most subway riders accused of fare evasion tend to be low-income youths, and questioned whether a crackdown on fare evaders was the best approach. She said it might make more sense to spend less money on new technologies to track fare evaders and use the savings to reduce or eliminate fares across the system or on some lines used primarily by low-income riders.