Metra hopes to swing $17M savings on 21 new rail cars
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Metra hopes to roll out more new rail cars at a faster clip and at a cheaper rate than originally anticipated under a $2.4 billion modernization plan that’s expected to be tweaked following a state-funding logjam.
Twenty-one new rail cars could join Metra’s fleet in early 2018 under a deal now under negotiation with Virginia Railway Express and Japanese rolling stock manufacturer Nippon Sharyo, Metra CEO Don Orseno said Tuesday.
Metra hopes to snag the cars for $2.5 million each — $800,000 less per car than originally budgeted in Metra’s 10-year plan to upgrade the oldest fleet among peers, Orseno said. That would represent a total savings of nearly $17 million.
“We believe we will get the cars quicker, and there will be more cars than we originally thought at a less expensive price, which is a savings to our customers and taxpayers,’’ Orseno said. “You can’t get much better than that.”
The road to the potential $17 million in savings evolved as Metra tried to adjust to the state’s decision last year to place on hold $300 million in funding that Metra had baked into its 10-year modernization plan, officials said.
Along the way Metra discovered that Virginia Railway had been purchasing rail cars from Nippon Sharyo that were compatible with Metra’s rail cars, and that Virginia Railway did not expect to exercise its remaining option for 21 cars.
Metra now hopes to buy the option for those 21 cars. “It was just a real good find for us,” Orseno said.
In addition, Orseno said, Metra is trying to find used rail cars that are newer than some Metra cars with more than 60 years on them and then rehab them.
“We have 60-year-old cars,” Orseno said. “If we can get 30-year-old cars and rehab them, that’s great. That’s a win-win for everybody.”
Metra unveiled its 10-year plan to upgrade its fleet and bankroll other improvements in 2014, saying that 10 consecutive years of fare increases would probably be needed to fund it. Two fare increases have since followed.
Despite the potential savings in the deal under negotiation, Orseno said it was too early to say if a third fare increase would be needed in 2017.
Because of the Virginia Railway developments, Metra is pulling back a February request for proposals to design and produce 367 new rail cars by 2024, the first 10 of which would have been due in 2018, Orseno said.
The 21 new rail cars would be the first purchased under Metra’s $2.4 billion modernization plan to upgrade its fleet. The program also includes a federally mandated safety technology called “positive train control,” as well as covering typical 3 percent annual increases in operating costs.
Eventually Metra expects to issue bonds “or some other funding mechanism” to bankroll the plan and the remaining rail car and locomotive purchases, but it is currently “regrouping” because of the latest developments, Orseno said.
Concerning the $300 million in funding expected from the state, Orseno said, “I’m not saying it won’t happen. I’m sure everyone can come together and come up with a solution. But since it hasn’t happened, we have to rethink our strategies.”