MBTA to pay CRRC another $148 million for new cars

The extra funds are needed to get the delayed project back on track, T officials told the agency’s board of directors, which approved the new agreement. The T was supposed to have all 404 new cars it purchased for about $871 million by last September. To date, the T has received only 130 cars from CRRC.

Amid severe delivery delays over the past year, the T looked at scrapping the CRRC deal and ordering cars from another company, but ultimately decided the new agreement with CRRC would deliver the cars faster, T general manager Phillip Eng said. Without the new deal, Eng said, the T would not receive the last car until 2029 at the earliest.

“This is the best way to get reliable cars for the riders we’ve promised to provide a better trip,” said Eng in an interview. “These cars are essential.”

Eng said the deliveries were hampered first by tariffs imposed by the Trump administration on rail car equipment imported from China, and then by the pandemic.

The project has also been plagued by “chronic quality issues,” according to a letter the T’s deputy director of vehicle engineering, Mark DeVitto, sent the company in late 2022. DeVitto outlined 16 failures, including incomplete inspections and reports of parts that are damaged or ill-fitting. Several former workers at CRRC’s Springfield factory, which began production in 2018, interviewed by the Globe last year described a chaotic and often harrowing environment prone to mishaps and delays long before the pandemic began.

A battery explosion, derailment, loose brake bolts, and electrical arcing have forced the T to repeatedly pull the new cars out of service and rely on faulty old cars.

Eng said the quality of the new cars has improved significantly over the past year and is confident the new deal will get the project over the finish line.

Under the new agreement, the T will pay $95 million to reimburse CRRC for increased expenses for parts from its vendors, $55 million to cover tariffs the company incurred since the contract was initially signed and increases in international shipping costs as well as factory operating costs, and $10 million in incentives for CRRC to stick to the new delivery deadline. The T will also agree to waive $38 million in late fees incurred by CRRC if the company is able to meet the 2027 deadline.

Under the new agreement, some wiring work on the cars will happen in China before the cars arrive at the Springfield factory, according to Jeffrey Cook, the T’s chief procurement and contracts administration officer. The agreement protects all jobs at the Springfield facility, Cook said, and gives the T the right to purchase the Springfield factory if CRRC sells it.

In 2019, the federal government banned transit agencies from using federal funding to buy railcars from Chinese-owned companies, essentially limiting any further work CRRC can get in the United States beyond its current deals with the T and transit agencies in Philadelphia, Los Angeles, and Chicago, said deputy general manager Jeffrey Gonneville.

Bao Yujun, deputy general manager at CRRC, said the new Red and Orange Line cars are the company’s highest priority.

“We understand the MBTA’s urgency to…