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MBTA Fare Transformation Program Advances with Approval of Amendment to Public Private Partnership Agreement

Posted on April 27, 2020

New system projected to collect $8 billion in fares over first 10 years of operation.

Customers will begin to see benefits of fare transformation over the next year.

New technology will enhance access to transit, promote affordability, adjust to future customer needs.


Today, the MBTA’s Fiscal and Management Control Board approved a contract amendment regarding the Public Private Partnership agreement involving the T and the consortium Cubic | John Liang. This action marks a significant step toward implementing the revised transformative initiative approved by the Fiscal and Management Control Board in December 2019, locking in an achievable and enforceable schedule while procuring new technology that will allow the system to adapt to future changes in ridership and to implement new kinds of fare options.  
 
The amended contract totals $935.4 million, including both the full capital cost of the system and a 10-year stream of operations and maintenance payments. Although this represents an increase of $212.1 million in project costs compared to the contract approved in 2018, the new fare collection system remains cost-effective and is projected to collect over $8 billion in fare revenue during its first 10 years of operation.
 
This amendment, which strengthens the original 2018 AFC 2.0 contract, enables the MBTA to achieve all the original goals of the project under a new approach. Based on feedback from customers, advocates, and policy makers, the new approach will result in customer-focused upgrades to the existing and future systems. In addition, this board action reestablishes key milestones, includes new provisions that reduce the T’s construction risks, and allows the system to account for future changes within the payment industry.  
 
“Under this program reset, we’ll be able to deliver one system that can be used across all modes that meets the needs of our customers today, and has the ability to adapt to future needs,” said MBTA General Manager Steve Poftak. “Especially in light of recent changes to daily life caused by COVID-19, it’s more important than ever to move toward a dynamic system with contactless options that can withstand major changes to conditions that would otherwise undermine a legacy system of fare collection.”
 
The amended contract is only one part of a comprehensive Fare Transformation initiative that will ensure that customers begin to see improvements in fare collection over the next year, including the ability to obtain CharlieCards more easily and the elimination of the cash/ticket surcharge in 2021, so that CharlieTicket and cash fares will be the same as CharlieCard fares.  
 
Under the phased approach and in the short term, Fare Transformation will result in improvements that include:

  • The ability to pay for a trip on all Zone 1A stations on the Fairmount Commuter Rail Line with a CharlieCard;
  • Deploying fare vending machines that dispense CharlieCards;
  • All-door boarding on MBTA buses and surface stops along the Green Line;
  • Integrating ferries and the entire Commuter Rail network into the CharlieCard system.

This amendment also allots more time for both testing and installation of the new system and customer migration. Working with stakeholders, the program reset establishes a more robust, thoughtful network of retail sales outlets and fare vending machines centered on the needs of T customers. In conjunction with that process, the MBTA has committed to a significant increase in the total number of vending machines to ensure adequate access.  
 
“Critical to this project’s success is outreach, and the level of engagement we’ve received indicates just how important the future of MBTA fare collection is to our customers,” said Ron Renaud, Chief Transformation Officer. “Thanks to the feedback, we are now on a course to provide improvements to our existing system, and ultimately, deliver a project that is even more focused on the needs of our customers.”  
 
While the MBTA’s existing fare collection system collected approximately $671.7 million in FY19, the aging system requires substantial maintenance and upgrades and cannot support the kinds of fare options that customers have requested.  
 
“The investment in new fare collection technology is an investment in the MBTA’s future,” explained General Manager Poftak. “Fare collection is critical both to funding services and to building a system that provides dynamic capabilities, enhances access to transit, and promotes affordability and can adjust to future customer needs.”  
 
The new technology provided by the Public Private Partnership offers reliability of equipment, readily accessible payment technology, and flexibility in fares and programs to further enhance access and equity for the MBTA ridership of the future.  
 
In 2018, the FMCB authorized the original contract to include $356.8 million in payments for the capital cost of the new system and a 10-year stream of operations and maintenance payments totaling $366.5 million for a total cost of $723.3 million. The revised contract approved today includes $723.3 million for the capital cost and a reduced 10-year stream of $212.1 million in operations and maintenance payments, for a total of $935.4 million.

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