Move
provides the Peninsula Corridor Electrification Project with flexibility needed
to survive deferred decision on Federal Grant
Today Caltrain announced that it has
negotiated an extension of the deadline for contractors to begin construction
of the Peninsula Corridor Electrification Project while the agency awaits a
decision from the Federal Transit Administration about the execution of a $647
million funding agreement.
The contractors agreed to extend the
deadline for four months, from March 1 to June 30. Last week, FTA
announced that execution of the grant would be delayed until the President
makes decisions about the availability of funds in the Administration’s
upcoming budget proposal to Congress. The extension is needed to preserve the
electrification project’s contracts during this time.
The extension does not come without
cost implications. Buying additional time from the contractors will likely
require the utilization of up to $20 million in project contingency that
otherwise would have been available for construction related expenses in the
future. The sooner the grant agreement is executed, the smaller the impact will
be to the project’s contingency.
Caltrain has been working with the
FTA since 2009 to ensure that the project meets all of the rigorous statutory
and regulatory requirements of the Core Capacity competitive discretionary
program. The project was rated highly after thorough evaluation including
ridership studies, design assessments, financial analyses and cost benefit
evaluations by the FTA and the U.S. Department of Transportation (USDOT).
Caltrain, as the project sponsor, also has significant local financial support
for this project, demonstrated by the project’s substantial leveraging of
local, state and regional funds. The federal Core Capacity request makes
up only 32 percent of the total project cost.
Caltrain officials expressed their
gratitude to their primary modernization contractors for providing additional
time and flexibility to manage the unforeseen delay.
“Every project that has achieved
these milestones has received an executed Full Funding Grant Agreement and we
don’t expect that this project will be any different,” said Caltrain Executive
Director Jim Hartnett. “By agreeing to an extension, Caltrain’s contractors
have demonstrated their commitment to preserving this unique opportunity to
deliver unprecedented improvements to an aging commuter rail system that serves
65,000 riders every day and a project that will put thousands of Americans to
work throughout the country.”
In September 2016, Caltrain awarded
contracts to Balfour Beatty for construction of the corridor’s electrification
infrastructure, and to Stadler US, Inc. for the manufacture and delivery of
high-performance electric commuter rail trains that will increase the system’s
ridership capacity and connect Peninsula communities with more frequent service
and improved travel times. The contractors have advanced the project’s design
and were scheduled to begin construction before FTA announced the delay.
“Caltrain has demonstrated an
incredible commitment to the project by navigating these unusual and unique
circumstances,” said Balfour Beatty CEO Ray Bond. “The nationwide scope of this
project’s merits and benefits has kept this vision alive for over two decades
and we are proud to be able to help preserve the opportunity to realize those
benefits.”
“This project will not only
transform the aging diesel system into a modern and efficient electric commuter
rail system better serving the needs of the region but it will also be the
driving force for the creation of a new railcar production facility in the US,
that will employ several hundred workers,” said Martin Ritter, Stadler US CEO.
“We are excited to keep this project moving forward and appreciate the
partnerships with the federal and local investors to ensure that this
project, the jobs and plans to build new a facility are realized.”
Caltrain cautioned that additional
extensions may not be possible. “Our contractors have agreed to delay
construction for the maximum amount of time possible,” said Hartnett. “Delaying
a decision on Federal funding beyond June 30 will be the same as rejecting the
grant.”
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About Caltrain: Owned and operated by the Peninsula Corridor
Joint Powers Board, Caltrain provides commuter rail service from San Francisco
to San Jose, with limited commute service to Gilroy. Caltrain enjoyed five
years of consecutive monthly ridership increases, surpassing more than 60,000
average weekday riders. While the Joint Powers Board assumed operating
responsibilities for the service in 1992, the railroad celebrated 150 years of
continuous passenger service in 2014. Planning for the next 150 years of
Peninsula rail service, Caltrain is on pace to electrify the corridor, reduce
diesel emissions by 97 percent by 2040 and add more service to more stations.
