T puts modernization cost at $10.1b

Number could be factor in ongoing revenue discussion

THE MBTA ESTIMATED on Monday that it would cost $10.1 billion to fully modernize its assets, a projection that may influence the debate on Beacon Hill over whether the agency needs additional revenue.

The T has long used a figure of $7.3 billion to estimate the amount of money needed to bring the system into a state of good repair. While T officials cautioned that the new $10.1 billion figure is not directly comparable to the old one, they nevertheless said it “reflects how much the MBTA would need to spend if it chose to fully replace all assets currently in need of replacement with modernized assets.”

Joseph Aiello, the chairman of the T’s Fiscal and Management Control Board, said the new figure “was an important piece of information for us” as the five-member panel tries to craft a unified stance on whether new revenues are needed at the transit authority. Asked how the $10.1 billion capital spending estimate would figure in that discussion, Aiello said: “Because revenues should match need. Now we know need.”

Richard A. Dimino, president and CEO of the business-backed group A Better City, issued a statement saying the $10.1 billion estimate underscores the urgent need for action on transportation finance. “A comprehensive transportation finance plan, including new revenue, must move forward this year to create the 21st Century transportation system Massachusetts deserves,” he said.

In a meeting with reporters, Steve Poftak, the MBTA’s general manager, shied away from any discussion about the need for new revenues. “Right now we have the funding we need for the next five years and beyond,” he said.

The MBTA has a number of expansion projects it is considering (for example, connecting the Red and Blue subway lines and revamping the commuter rail system to offer more frequent service with electric locomotives) that are not included in the T’s current capital spending plans. Poftak acknowledged that if the T takes on additional projects the agency’s capital spending would have to increase even more.

“Anything added obviously adds complexity,” he said.

Poftak last week unveiled a plan to increase capital spending at the MBTA more gradually, allowing the T time to hire some 80 full-time new employees to focus on capital projects.

Jim Rooney, the president and CEO of the Greater Boston Chamber of Commerce, sent a blistering note to the control board on Monday calling for a greater sense of urgency and bolder solutions to the T’s problems. He noted procurement delays have been announced for Orange Line cars, a federally mandated anti-collision initiative on the commuter rail system, and a new automated fare collection system.

“Those aren’t good signals,” Rooney said in a telephone interview. In his letter to the control board, Rooney, a former T general manager himself, described Poftak’s announcement a week ago as “essentially waiving the white flag and declaring a capital emergency.”

Rooney said the Baker administration inherited a broken-down transit system in 2015 and has done a good job of improving operations. But Rooney said the time for patience is over. “Asking riders, the business community, the Legislature, and residents for more patience and to deal with more delays should not be an option,” he said in his letter. “Your customers want and deserve better.”

T spokesman Joe Pesaturo said late yesterday that Poftak had not had an opportunity yet to read Rooney’s two-page letter. He said the state of MBTA assets is better than previous years thanks to more than $3 billion invested in the system since 2015.

In his conversation with reporters, Poftak said the T is moving in the right direction on capital spending, “but we’re not going fast enough.”

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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.

The T planned to spend $942 million in fiscal 2018 but ended up spending only $875 million. The projected spend is $1 billion this fiscal year, which ends June 30, but the T is expected to come up short at $950 million. Under the T’s current capital spending plan, expenditures are supposed to ramp up to nearly $1.4 billion in fiscal 2020 and $1.7 billion in fiscal year 2021.

Those expenditures include spending on expansion projects, including the Green Line extension to Somerville and Medford and South Coast commuter rail service  to New Bedford and Fall River. Under current planning, the T is planning to ramp up capital spending on modernization initiatives to $1.5 billion in fiscal 2024 and then hold it at that level until fiscal year 2032, when the $10.1 billion modernization effort is expected to be completed. Of course, modernization estimates may change over that time period. Aiello, the chair of the control board, also noted that the current projection of $10.1 billion includes placeholder numbers for investments in power systems and commuter rail. “Both of those could be big swings if the placeholders are wrong,” Aiello said.