Keolis Will Be The New Operator Of The MBTA’s Commuter Rail Services
The contract breaks free from the MBCR, which the T has been working with for the last decade.
During their first meeting of the year—and after roughly two hours of public testimony that teetered on the line of general support, and blatant contempt—the Massachusetts Department of Transportation’s Board of Directors voted unanimously to award a contract to French company Keolis, allowing them to take over operations of the MBTA’s Commuter Rail system.
The contract, which will be executed in February after further details are ironed out, will shift the responsibility of managing the large transportation network into the hands of Keolis, beginning on July 1.
“Keolis’ Proposal presents the best combination of technical quality and price, and is more advantageous to the MBTA,” said MBTA General Manager Beverly Scott, in front of a packed room. “Any delay in initiating mobilization activities could adversely impact the provisions of commuter rail services.”
The base contract will last eight years, and cost the T roughly $2.6 billion, with an optional four-year extension that would bring it to $4.28 billion.
Keolis won the bid over the current operator, the Massachusetts Bay Commuter Rail company, which has been at the helm for the last 10 years.
Scott said Keolis’ contract comes with some new provisions that were not in place with the MBCR. Under the guidelines presented by Scott, labor and workforce protections will ensure that the new operator hires the current workforce in seniority order, and that the existing collective bargaining agreements fully remain in effect until new labor agreements are negotiated.
One significant change to the new contract, Scott said, is that moving forward, performance incentive payments will no longer be doled out to the transit operator for on-time service. Currently, the MBCR can reap performance bonuses for having trains show up when they are supposed to.
“The new contract sets a ‘no excuses’ expectation that the operator will run the trains on time,” Scott said of eliminating those perks.
Financial disincentives of up to $12 million per year will also be imposed if service is shoddy on the part of Keolis. “I want to stress that our goal is ‘performance’ not ‘penalties,” Scott told the board. “But, if performance is not up to par—under the new contract, performance failure payments will be significantly greater.”
Keolis’ bid, which came in lower than MCBR’s, was part of the appeal for picking them. Scott said it was the amount in savings—roughly six percent—matched with a lower profit margin that helped with the decision.
The contract is the single largest public transportation contract in the country, according to officials.
Officials from Keolis declined to comment following the board’s decision on Wednesday afternoon, after an hours-long meeting that included testimony from those that both supported, and protested, Scott’s and the Selection Committee’s decision to put the proposal before officials for consideration.
Union representatives spoke on behalf of commuter rail employees, in support of the current operator, and voiced concerns over the transition from the MBCR to Keolis.
“It takes money to provide the best service…and you aren’t going to get the lowest bidder to build your commuter rail. If you underbid someone millions of dollars, pretty much you need to find a place to cut that cost,” said Mike Bobulis, vice president of a local chapter of the International Association of Machinists and Aerospace Workers. “You cannot take the lowest bidder and not expect to provide the lowest service.”
Representatives from the MBCR, who were present during the lengthy hearing at the state transportation building, also weren’t pleased with the outcome of the vote. Most notably, they said, because of the procurement process leading up to the decision.
“We have been working on a proposal for more than two years,” said Ron Hartman, executive vice president of Veolia transportation, MBCR’s parent company. “The result was few questions and little opportunity to discuss our proposal. My only question is, do you really know what proposal you are getting that you are about to [approve]?”
James O’Leary, chairman of the MBCR, said the agency has reached “labor harmony,” and made investments beyond their contract to bring customer satisfaction to the tracks, and he was disappointed to learn that the T was considering another operator by reading a Globe story last weekend.
“Even today there has been no explanation on how the decision was made. Worst of all, 2,000 employees had to read in the Globe that they might have a new employer next July. This is about their jobs and compensation, and who they will work for…they should have heard from us and not the Boston Globe,” he argued. “If the MBTA had as little interaction with Keolis [during the procurement process] that they have had with us, they can’t be ready to engage in this [new] contract.”
Despite the outcry, however, the board moved forward with their unanimous vote—barely batting an eyelash—after Scott detailed the lengthy selection process that was conducted in order to reach her recommendation. “There will be bumps, but we will be operational by July 1,” said Scott.