The Southeastern Pennsylvania Transportation Authority, known as SEPTA, canceled a $185 million contract signed in May 2017 with CRRC MA Corporation for 45 double-decker railcars. To date, none of the passenger coaches have been delivered to the transit agency, according to The Philadelphia Inquirer.
CRRC MA was established in 2014 by CRRC Corporation Limited, which says it is the world’s largest supplier of rail transit equipment. CRRC is a Chinese state-owned enterprise, having received nearly $1.3 billion in subsidies from the Chinese government between 2015 and 2020, according to the advisory firm Oxford Economics. During that period, CRRC won seven passenger rail contracts in North America, the report states.
By 2019, when the first cars were due to be delivered to SEPTA, CRRC had fallen behind schedule, Trains News Wire reported. Due to delays, CRRC shifted the manufacture of two prototype cars to China to get them built more quickly.
As of today, CRRC MA’s website says, “These vehicles and all future North American rail car contracts will be assembled in Springfield, Massachusetts with the first coach expected for delivery by the end [of] 2020.” However, according to a July 20, 2022, Philadelphia Inquirer story, “Workers in China have started another 20 coach car shells, which also will go to the U.S. facility.”
SEPTA’s procurement is subject to the Federal Transit Administration’s Buy America requirements, which stipulate that the domestic content for rolling stock must be greater than 70% as of fiscal year 2020. Prompted by the Inquirer story, three members of the House Transportation and Infrastructure Committee asked the U.S. Department of Transportation’s Office of Inspector General in September 2022 to review the transit agency’s contract with CRRC MA. The DOT OIG subsequently began an audit last year of the Federal Transit Administration’s oversight of SEPTA’s contract with CRRC MA in regard to the FTA’s Buy America requirements.
CRRC MA also has contracts with the Los Angeles County Metropolitan Transportation Authority for 64 subway cars, with an option for an additional 218 vehicles. The contract was signed in 2017, with the first vehicles delivered in August 2023.
The Massachusetts Bay Transportation Authority contracted with CRRC MA for 404 subway cars in 2014 to replace older rolling stock on the Orange and Red lines. Deliveries began in 2019, but vehicles have repeatedly been taken out of service by the MBTA for noise issues, faulty vehicle bolsters, a derailment, an improperly installed bolt, a battery explosion and other manufacturing defects, according to the Boston Herald.
In March, the MBTA and CRRC agreed to amend the contract, with the transit agency paying as much as an additional $148 million to account for costs from the COVID-19 pandemic and supply chain disruptions, and the manufacturer promising to deliver all cars by 2027 — five years later than the original expected delivery date.
SEPTA has already spent $50 million on its project and told Fox 29 News Philadelphia in a statement that it is “assessing its options for recouping funds that have been spent on the project.”
