15.June, Boston MA – MBTA’s Fiscal and Management Control Board approved a 4-year extension of the Commuter Rail Operating contract between the MBTA and Keolis Commuter Services, LLC, through June 30, 2026. The current contract expires in 2022, and includes two two-year renewal options. The parties have agreed to both options, and to apply the terms of the extension to the remainder of the existing contract. All tolled, the new agreement will pay Keolis up to $2.56 billion in operating costs and $97 million in capital costs through June.2026.
Keolis has been the MBTA’s contracted Commuter Rail operating partner, providing all mechanical, transportation, and engineering services, according to the terms of an eight-year contract signed 01.July.2014, and due to expire 30.June.2022. The contract included options for two two-year extensions through 2024 and 2026. The MBTA’s contract with Keolis is performance-based with the contract including a fixed price for a certain level of service and penalties related to on-time performance and passenger comfort.
Among other significant benefits, the extension provides cost certainty in a challenging market with the MBTA paying less than the current market price for the contract, and avoids a potentially disruptive transition that might come with a re-procurement and a new operator.
MBTA General Manager Steve Poftak explained the decision as meeting the MBTA’s “[Main] goals … to provide continuity and the best possible service for our Commuter Rail customers, as well as provide adequate time to plan for a future transformational procurement.” Poftak detailed additional system improvement incentives incorporated into the extension agreement (detailed below – Ed.).
David Scorey, CEO and GM of Keolis Commuter Services said that the “extension balances taxpayer and passenger needs as it keeps costs low while also enhancing the passenger experience.”
In addition to weathering the dramatic drop in ridership during the CVD-19 pandemic, and maintaining the pace of two major route expansions (Green Line Extension and South Coast Rail), the T is preparing to transform its underlying commuter rail business model to run much more frequent service.
Transformation will bring major changes in the operating arrangement, perhaps adopting characteristics of European franchise agreements, in which the operator takes the lead in initiating service changes and benefiting from increased ridership, (or losing, if plans fail).
This 4-year extension now also includes a number of additional incentive benefits that include:
- Additional performance payment incentives for improved on-time performance, train crew staffing, and seating capacity. These performance incentives are worth a potential total of $5 million per year in fiscal years 2021-2026.
- Additional measures to address fare evasion/non-collection, including the installation of automated fare gates that will significantly reduce ticketless travel. Staffing incentives expand the number of conductors onboard to check tickets.
- Incentives to accelerate capital investments in MBTA railroad infrastructure and assets that include early phases of Rail Transformation.
- Increased fleet availability and reliability through improved management of Mechanical Parts in fiscal years 2022-2026;
- Flexibility and time to develop transformational successor contract, with the possibility of re-procurement as early as 2025.
Since the start of the contract, Keolis has added 10,000 more trains per year, including new weekend train service, piloted routes, and other services; has deployed customer technology that enables passengers to pay for tickets onboard with credit and debit cards; and has reinforced safety management protocols that include an expanded and updated Safety Department.