A contract "reset" with the manufacturer of new Red and Orange Line trains sets the end of 2027 as the latest completion target for the maligned project, adds up to $148 million in allowable costs, and forgives tens of millions of dollars more in penalties.
After a year-long review of the T's contract with CRRC, a team of advisors recommended the transit agency continue its work with the Chinese manufacturer despite repeated disruptions, but alter the agreement to include new incentives and deadlines.
MBTA officials reached a proposed settlement with CRRC that will increase what the agency pays for all-new Red and Orange Line fleets by as much as $148 million, which would account for higher-than-expected costs linked to the pandemic and supply chain problems, according to a presentation Deputy General Manager Jeff Gonneville gave Thursday morning.
The tentative agreement also waives about $90 million in penalties that the manufacturer faces for delays so far. Another $37 million in damages will remain in place, but the updated contract sets incentives that could effectively dismiss those charges as well if CRRC meets new targets.
Under the deal, CRRC faces new deadlines to deliver all Orange Line cars by September 2025 and all Red Line cars by the end of 2027 — in both cases several years later than the original deadlines.
The MBTA board approved the contract change with all members voting yes except for one abstention.
Gonneville told MBTA board members that advisors who reviewed the upheaval at Gov. Maura Healey's instruction concluded that reshaping the CRRC contract is a better option than trying to find to an alternative manufacturer.
"A new procurement was going to take up to five years before the MBTA actually received a first vehicle, and each vehicle could be potentially $1 million more per car than a negotiation with CRRC," he said. "The recommendation ultimately was that a reset with CRRC was in the best interest for the MBTA and our customers."
The original $565 million contract has already been amended, swelling its current value to $870 million before accounting for any changes proposed Thursday. About 112 new Orange Line cars out of the 152 ordered have been delivered, as have 18 of the 252 Red Line cars.
NEPM's Sam Hudzik contributed to this report.
