Airports authority says cost of developing rail car could bust deal with Metro
Thursday, April 22, 2010
Officials building a subway line to Dulles International Airport say Metro is overcharging them for new rail cars, a budget-busting cost that they predict could delay the opening of the extension and force higher fees for Dulles Toll Road commuters.
Unless Metro agrees to eliminate a $75 million increase on 64 rail cars it is preparing to buy for the new Silver Line, the regional airports authority won't agree to the deal, the officials said.
At issue is Metro's plan to have the Dulles rail project pay the entire cost of developing the new cars. Authority officials say that is unfair when the investment will benefit the entire Metrorail system.
"It is not possible, nor is it reasonable, for the [Dulles rail] project to bear all these costs," authority President James E. Bennett told interim Metro chief Richard Sarles this month in a three-page letter obtained by The Washington Post.
The cars in question will carry riders on the first 11.5-mile leg, which is being built through Tysons Corner to Wiehle Avenue in Reston and is scheduled to open in 2013. They would be the first cars manufactured under a contract with Kawasaki Rail Car for 748 rail cars for the subway system. The contract would be worth as much as $1.9 billion.
The airports authority is paying for the Silver Line cars as part of the project's construction phase, but Metro, which will operate the extension, is responsible for executing the purchase.
Airports authority officials say they budgeted $190 million for the 64 cars, about $3 million each, based on cost estimates provided by Metro in 2007. But the price has increased to $265 million, or $4.1 million for each car.
Metro, meanwhile, will pay significantly less, $2.5 million each, for cars it will use elsewhere in the system, according to a financing plan presented last month to its board of directors. That plan would include a base contract for the 64 cars for the Silver Line and options to buy additional numbers of cars in phases.
The Dulles rail project would pay engineering, design and development costs for all of the rail cars, but Metro spokeswoman Lisa Farbstein said the practice is not unusual.
"It is standard in the industry that the first order of a given series" of rail cars costs more than the option "to purchase additional cars because there is no guarantee that the options will ever be exercised," she said.
Bennett, however, is lobbying Metro to spread the design and engineering costs evenly across the first 428 cars in the purchase plan, bringing the price to $2.7 million each.