NJ Transit Deadline to Install Train Brakes in Doubt After Audit

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(Bloomberg) -- New Jersey Transit’s ability to finish a federally mandated emergency-braking project on time is questionable after a state audit documented multimillion-dollar change orders and missed milestones.

New Jersey’s highest-ranking state lawmaker said the agency hasn’t explained why the projected cost of the task, called positive train control, has almost doubled, to $500 million.

“I am very concerned about the deadline,” Senate President Steve Sweeney, a Democrat from West Deptford, said in a telephone interview. “They’re going to have to explain why they hired all these other consultants and increased fees and let these contractors go on liquidated damages.”

The project’s rising change-order costs were detailed in a 19-page report, released on Jan. 30 by State Auditor Stephen M. Eells, that found other deficiencies within the nation’s third-largest commuter railroad. The audit criticized NJ Transit’s failure to collect more than $9 million in penalties from contractors that were tardy on project milestones.

“Despite a number of deadline extensions for implementation and contract change orders, at this time it is debatable whether NJT will meet the PTC full implementation deadline of Dec. 31,2020,” the audit stated.

Highest Priority

NJ Transit also skimped on prioritizing repairs or replacement of bridges that were in poor condition, shifted millions of dollars of train funds to bus needs and subjected rail commuters to thousands of potentially preventable delays, the audit found. The railroad is crucial to New York City jobs.

NJ Transit spokeswoman Nancy Snyder declined to comment on Sweeney’s remarks, and pointed to an audit response from Kevin Corbett, the agency’s president and chief executive officer.

Positive train control is “of the highest priority,” Corbett wrote, and the agency “will continue to focus its efforts on implementing” it by the Dec. 31 deadline.

Governor Phil Murphy, a Democrat who took office two years ago, has vowed to turn around the nation’s largest statewide mass-transit operator. In a statement, he said the agency was neglected and mismanaged for almost a decade under former Governor Chris Christie, a Republican.

“Make no mistake, we still have a lot more work to do, but I’m proud of the swift and meaningful action we’ve taken to rebuild NJ Transit from the ground up,” Murphy said.

The emergency-braking project, designed to stop runaway trains and prevent collisions, dragged under Christie. When Murphy came to office in January 2018, it was 12% completed -- near last for all U.S. passenger railroads ordered by the U.S. Congress to install the technology. Amid a sea of doubt, NJ Transit met a Dec. 31, 2018, deadline for the first phase. It has until the end of 2020 to finish the next task.

Preventable Delays

Since Murphy came to office, NJ Transit has carried out change orders valued at $27 million, bringing the total for all project changes to $210 million, according to the audit. The total is almost certain to grow: Another change order, approved by the NJ Transit board in July, remains under negotiation.

Of more than 47,000 late trains, 38% may have been preventable, according to the audit’s review of rail operations from January 2017 through May 2019. NJ Transit attributed most of the lateness to staffing, mechanical, equipment and infrastructure issues, and said it has made improvements.

“Each of these factors was aggravated over the past two years by a lack of strategic planning and under-funding by prior NJ Transit management,” the agency wrote in the audit response. It has hired 169 engineer trainees and 144 conductors and authorized spending $854 million on rolling stock, the agency said.

Still, Sweeney, who is leading a legislative inquiry into NJ Transit finances and operations, said agency management “is going to have a lot of questions to answer” at a February hearing.

“NJ Transit’s responses I don’t think match up to what I’ve read in the auditor’s report,” Sweeney said.

NJ Transit defended its transfer of $45 million to bus needs from rail, and $22.4 million diverted from the Portal Bridge replacement project, saying it was within U.S. Transportation Department rules to do so. It also said that it hasn’t ruled out collecting monetary penalties from the braking-project contractor.

The audit also raised concerns about how NJ Transit prioritizes the need for bridge repair or replacement. The railroad, in its response, said the bridges are safe, and assessed and maintained regularly. Its inspection program meets federal standards, the agency said.

“Conditions that require immediate attention do not appear on NJ Transit’s priority-repair or replacement list because the conditions are resolved as soon as possible,” the agency wrote.

©2020 Bloomberg L.P.

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