T board ponders 2-year extension for Keolis

With time short for board and contract, options limited

WITH ITS SUNSET DATE 2 ½ months away, the MBTA’s oversight board is trying to decide whether it has any other option than to extend its existing commuter rail contract with Keolis Commuter Services through 2024.

The T’s Fiscal and Management Control Board voted in November to pursue a major overhaul of the commuter rail system, shifting to more subway-like service using electrified trains. But there’s a big problem: the contract with the existing operator, Keolis, expires on June 30, 2022, and there’s little chance the T could hire a new company to launch its commuter rail system of the future by then. The last two times the T put its commuter rail operation out to bid the process took two years and only attracted two bidders.

The issue also comes with a lot of personal baggage for Transportation Secretary Stephanie Pollack.  She vowed in 2016 that the MBTA would not extend its contract with Keolis beyond 2022. She even put that pledge in writing.

But she began walking that stance back roughly a year ago and then said in October that it was very possible the T would take advantage of an extension option in the existing Keolis contract.

At a virtual control board meeting on Monday, Rob DiAdamo, the T’s executive director of commuter rail, said Keolis has met all of its contract terms and improved its on-time performance dramatically since December.

But DiAdamo said the current contract doesn’t reflect where the T wants to go. He said the eight-year, $2.6 billion contract with Keolis – DiAdamo called it the “largest contract of its type in the country” – pays the company a fixed price to operate a fixed number of trains on a fixed number of routes. What the T is looking for is more of a partner, a company willing to invest some of its own money in the commuter rail operation and be incentivized to improve service.

DiAdamo said the T has two options – extend the Keolis contract from 2022 through 2024 at a cost of $349 million a year or try to negotiate a new short-term contract through a new procurement process while trying to develop a procurement for a long-term contract.

Joe Aiello, the chair of the control board, said it would be very difficult to juggle all that contracting work at the same time the agency is dealing with the fallout of the coronavirus and the very real possibility that resources may not be there for a major commuter rail expansion.

“It’s a big decision and there are millions and millions of dollars at stake,” said control board member Brian Shortsleeve, who suggested the board meet again in early May to talk about the commuter rail contract situation exclusively. Other board members quickly agreed.

“We need to be pursuing some contractual changes,” Pollack said.

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Bruce Mohl

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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.

Aiello asked DiAdamo if he could reach out to Keolis to see if the company would be willing to make some modifications to the existing contract extension. That may not sit well with Rep. William Straus, the House chair of the Legislature’s Transportation Committee, who feels granting any sort of contract extension to Keolis would give the company a leg up on the next contract and discourage potential competitors from bidding.

Aiello said it may make sense to leave the issue to whatever regulatory body takes over after the control board expires at the end of June. Pollack, however, said leaving the issue to the next board may be impractical because a new board couldn’t get up to speed and initiate a new procurement before the June 30, 2021, extension deadline with Keolis rolls around.

“There is a point in time where you make a decision by not making a decision,” she said.