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October 25, 2010
SMART BOARD OF DIRECTORS
 READY TO ENTER INTO
 A RISKY CONTRACT
 IN ORDER TO SAVE THE AGENCY


It is expected that SMART will award a risky contract to Nippon Sharyo (NS) for the purchase of rail vehicles that have never been built, are based on conceptual drawings, and haven’t even been submitted to the Federal Railroad Agency’s (FRA) safety compliance division for the required approvals, which, according to the FRA, could takes years to complete.
 
SMART officials appear undaunted that the NS bid of $83M is remarkably lower that the $121M - $137M bids submitted by the competitors for FRA qualified rail vehicles. More than likely their willingness to look the other way stems from SMART’s 2008 Financial Plan, which only budgeted $74M for rail vehicles. At a time when most manufacturers are lowering prices just to get business, SMART’s inability to find bids that match their budget surely can’t be blamed on rising prices or inflation.

RESPONSES TO SMART’S APRIL 2010 RFP FOR RAIL VEHICLES

BIDDER

MODEL

TECH

STATUS

FRA COMPLIANCE

PRICE

NOTES

ANSALDOBREDA

IC4

DMU

BUILT

NO

NO BID

 

BOMBARDIER

ITINO

DMU

BUILT

NO

NO BID

 

SIEMENS

NCTD SPRINTER

DMU

BUILT

NO

$104M

LOTS OF DMU HISTORY

STADLER

GTW DMU II

DMU

BUILT

NO

$124M

LOTS OF DMU HISTORY

NIPPON SHARYO

 

DMU

CONCEPT

YES

$83M

NO DMU HISTORY

SIEMENS

FRA DMU

DMU

CONCEPT

YES

$121M

LOTS OF DMU HISTORY

US RAILCAR

CRM

DMU

BUILT

YES

$132M

ONLY FRA DMU BUILT

CAF

TREBOL

DMU

CONCEPT

YES

$137M

LOTS OF DMU HISTORY

 
Because SMART is one of only 26 passenger rail services classified as “commuter rail”, it must use full FRA safety compliant vehicles. However, only 2 other “commuter rail”, services use the same “DMU”, type of rail vehicle that SMART must use. The other 46 passenger rail services in the U.S. are exempt from FRA safety requirements.
 
It’s interesting to note that the U.S. Railcar bid stems from their 2009 purchase of the assets of the former Colorado Railcar Manufacturing Company; the only company that has ever produced an FRA approved DMU. However, it’s hard to believe that those that invested in U.S. Railcar just wanted to screw their first real sales prospect with a whopping, (as compared to Nippon’s $83M), $132M bid. Yet, U.S. Railcar’s bid is in line with the others, (except for NS), that are also offering FRA compliant vehicles.

Obviously, SMART can’t afford to accept any other bids, so if they don't take a chance with NS, SMART may never have a train. Adding to that their current $350M funding shortage it makes one wonder why SMART should be able to continue collecting their $2M monthly income from the taxpayers of Sonoma and Marin Counties?

If this contract is executed, SMART's next step will be to issue bonds totaling an amount exceeding $200M. Once the bonds are issued, the taxpayers of Sonoma and Marin Counties will be on the hook to repay these bonds, regardless of whether the SMART train ever operates or not.
 
However, the real tragedy is that in 2006 and 2008 SMART officials, not only allowed, but supported SMART tax measures to be placed on the ballot, even though it was well known among commuter rail planners that SMART’s odds of procuring their required FRA safety compliant rail vehicles from their intended sole supplier, the former Colorado Railcar Manufacturing Company, at the budgeted cost were slim to none.
 
Now we all know.
 
Bob Roberts

bobr@stopsmart.org