MBTA Revises Plan For New Fare System, Boosting Costs And Delaying Rollout

Updated on Dec. 11, 2019 at 9:08 a.m.

The new MBTA fare system that would ban cash aboard buses and trains by 2021 is being delayed, with completion of the project now slated for 2024 and its price tag jumping from $723 million to as much as $1 billion or more.

The setback means the T will also lose out on savings the agency hoped to achieve through more efficient fare collection, along with easier boarding of buses that the MBTA said would improve service by 10 percent. Together, those now-postponed efficiencies were projected to yield $65 million per year.

The changes and billion-dollar price tag were disclosed to reporters on Friday in advance of Monday’s meeting of the T’s Fiscal and Management Control Board. At Monday’s meeting, control board members did not ask about the added costs, instead reserving blunt language to direct T managers to spend even more to hire additional staff to see the project to completion.

“You’re going to need a big, sophisticated team. Do you think you can come back [in January] and … show the positions you may need to recruit for?” Board Chairman Joseph Aiello asked Ronald Renaud, the T’s chief transformation officer for the new system. “Otherwise, what you come back with later in the spring might not get approved. They better be in place by the time you come back for the second phase.”

The board then voted to approve $79 million in partial funding, both to jumpstart software development for the new system and to keep existing fare equipment operational until it can be replaced.

Announced in late 2017 and dubbed AFC2.0, the revamped fare system will ban cash payments on transit vehicles. Instead, riders will be required to pay with Charlie Cards or tickets purchased at kiosks installed at stations and near bus stops, then swiping them on fare validators to board trains and buses. Riders will also be able to pay with credit cards or smartphones.

But technical problems and unresolved policy issues, such as how many kiosks will be installed and where, led the T and its contractor, San Diego’s Cubic Corp, to put the brakes on the new system last spring. After missing a series of deadlines, the program is being reset and renamed, now called “Fare Transformation.”

“The schedule didn’t really afford a lot of testing implementing and change,” said Ronald Renaud, the T’s chief transformation officer for the new system. With the delay, he said, “It’s an achievable schedule. We’ll have time to test [and] listen to their technology.”

Among policy changes, the MBTA plans to lower the cost per ride for passengers who purchase Charlie Tickets to match discounts given to those holding multi-ride Charlie Cards. Laurel Paget-Seekins, the T’s assistant general manager for policy, said this change would happen “in the medium term.” Currently, the higher price for single-ride tickets is cited by transit advocacy groups as penalizing riders who cannot afford a Charlie Card.

Though when the Cubic contract was signed in 2017, the MBTA’s now-departed Chief Technology Officer David Block-Schachter said, “We don’t pay them a dollar until the system is operational and working for our customers,” Renaud on Monday said that Cubic now needs a $30 million allocation to begin work.

Specifically, Renaud said, the amount is needed “to mobilize future fare equipment installation design work,” along with software design, development and licensing of existing and future equipment and media.

The board unanimously approved the request with little comment.

Renaud also presented a request for $49 million to rehab existing equipment from Scheidt & Bachmann, the German supplier of the original Charlie Card system introduced in 2006. The rehab contract — necessary to tide the T over until the Cubic system is ready to replace it — includes $35 million to Scheidt & Bachmann, $6 million for internal T expenses, and $8 million in “other fees,” Renaud said.

The board approved that request unanimously as well.

Though Renaud told reporters the total price would be “closer to a billion,” he did not offer a figure to the Control Board, saying, “We’ll come back to you with the final price for this.” Board members did not press him for an amount.

Renaud did say, however, that the Cubic contract would increase about $160 million. He also presented a slide showing another expense for “additional financing costs." The slide said these costs were "under negotiation" and "expected to be in the tens of millions.”

As unveiled in 2017, the revamped fare system would be the most ambitious and expensive project of its type in the U.S., modeled after Transport for London, which Cubic also runs. Cubic’s other contracts for North American transit systems include New York at $573 million, Chicago at $519 million, Philadelphia at $141 million and Vancouver at $220 million.

Officials for the T — which takes in about $700 million yearly in fare revenue — justified the higher price compared to other systems by touting the $65 million projected yearly savings, as well as the plan's potential to bring a better experience to riders.

But the $723 million Cubic deal did not include at least $50 million more in a separate contract to install the new turnstiles, fare validators and other equipment needed to make the system work. That contract, which has yet to be awarded and for which Cubic is not a bidder, was approved by the Control Board with little notice early in 2017.

The new fare system is one of three legs in a multibillion plan to totally overhaul the T following its massive breakdown in the winter of 2015. The other two components are new Orange, Red and Green Line cars, which began trickling into service earlier this year, and a new state-of-the-art signaling system for trains.

Goals of the three initiatives include the ability to carry a greater number of passengers per vehicle, faster boarding and less time spent at stops, and more efficient and timely operation of vehicles along the routes.

This story has been updated to include details about the T's Fiscal and Management Control Board meeting Monday.