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Parsons Transportation Group

Metro still fixing rail car issues

Someday this will all be over.

Houston’s light rail system is fully open, but closing out a complicated rail car purchase that nearly derailed the new lines remains a challenge for transit officials.

Metropolitan Transit Authority officials continue withholding $12.9 million from CAF U.S.A. – the builder of the vehicles – as they debate the amount of liquidated damages owed because of delays and delivery of railcars that were overweight, leaky and halted by faulty axles, among other problems.

When those discussions could conclude and what sort of damages Metro could receive is uncertain, transit agency CEO Tom Lambert said.

“We are not there yet,” he said. “We are going to continue to work with CAF, address the issues and go from there.”

In the meantime, the Metro board on Thursday extended a contract with Parsons Transportation Group, an engineering and design firm, for oversight of the CAF purchase. The extension carries the contract beyond its previous expiration in May to April 2018 and adds nearly $700,000 to the contract, which has already paid Parsons $29.6 million.

All 39 of the new light rail cars purchased are available for service, and carried a higher-than-normal number of passengers because of the Houston Livestock Show and Rodeo.

All of the cars, however, also have a handful of fleet defects that CAF will have to correct, said Scott Grogan, Metro’s senior director of rail operations.


The cars are only part of the stumbles related to the rail lines that Metro has raced to correct. Axle counters along the line led to delays in service for months, dropping on-time performance, especially on the Red Line, which represents most rail trips.

Timing has improved significantly since a blitz of repairs prior to the Super Bowl held last month in Houston. In January, the Red Line posted its highest on-time percentage, 92.6 percent, since November 2015. For many of the months between, fewer than 80 percent of the trains arrived on time.

Officials said despite the lingering issues and unresolved matters, the system is carrying people and growing. Buoyed by heavy use for the Super Bowl week, light rail weekday ridership was 2 percent higher in February, compared to the same month last year.

On Saturdays and Sundays, use was increased 12 percent and 13 percent, respectively.

“This isn’t limiting our ability to provide service,” board member Christof Spieler said of the railcar repairs.

It’s annoying that Metro is still dealing with this crap, but it will eventually get sorted. I’m focusing on the fact that the Main Street line’s on time performance has returned to normal levels, and that ridership continues to be strong. I’ve done more riding on Metro – mostly bus, but some train – in the last year than in any previous year I’ve been in Houston. The bus system redesign has been great for me, enabling my wife and I to carpool to work without having to worry about it when one or the other of us needs to go in early or stay late or run an errand after work. Sure it helps that we live in the inner Loop, but that’s where transit is most needed, and it keeps one of our cars off of I-45 every day. This isn’t directly applicable to the story here, but I think it’s good to remember that while Metro has its problems, it does do a good job at what it’s supposed to do.

Bonding Metro

It wouldn’t be Metro if there weren’t drama.

Metro has not obtained performance or payment bonds to cover all the planned construction of four new light rail lines, and some officials say that could put taxpayer dollars at risk.

Metro President Frank Wilson said the transit agency has not made a final decision, but tentatively plans to use a different form of risk management, called parent guarantees, to make sure the four major companies fulfill their obligations and pay their subcontractors on the $1.46 billion contract.

The four companies are Parsons Transportation Group, Granite Construction Co., Kiewit Texas Construction L.P. and Stacy and Witbeck Inc. They have formed a joint venture known as “Houston Rapid Transit.”

Wilson’s announcement at a July board meeting aroused the concern of the national surety industry, which provides the bonds for construction projects by public agencies. Some local officials also questioned the decision.

Texas statute requires public agencies to obtain performance bonds on construction contracts larger than $100,000 and payment bonds on contracts larger than $25,000. Metro did use performance bonds during the construction of the Main Street rail line.

“By Metro not putting these bonds in place the taxpayer is potentially liable,” said Peter Brown, a Houston City Council member and mayoral candidate. “We do these for every major project at the city of Houston. Metro has been planning the light rail project for a long time, and if they needed to find protection for the taxpayers through another means they should have taken that up with the Legislature this past session.”


Wilson said that Metro was complying with the state law but had to explore a different method because performance bonds for a $1.46 billion contract would be too expensive and difficult to obtain. “We went out and got 100 percent performance bonds, just not in the traditional way,” he said. Bond underwriters object because they can’t get business from the contract, he said.

Wilson said that the contract ensures the four parent companies share “joint and several liability” for the proper building of the new light rail system. “They have pledged their corporate assets,” he added.


A parent guarantee is written into contract language, while a performance bond is issued by a regulated, third-party underwriter with deep pockets, said Peter Linzer, a University of Houston business law professor. Although a parent company involved in a joint venture may also have deep pockets, and may pledge to make good on any disputes or failures of subcontractors, there is still some risk it could go under.

“There is no doubt in my mind that a performance bond is not the same as a parent guarantee,” Linzer said.

I’m not a finance guy, so I’m not going to try to analyze this stuff. I get that the issue is the risk that the public could wind up on the hook in the event things go south. What I don’t see in this story, maybe because it’s not possible to accurately quantify at this point, is how big this risk is. Metro is claiming their way of doing this is less expensive, and that the tradeoff in increased risk is minimal. How valid are those claims? I don’t have a feel for that based on this story.

On a tangential note, Metro and the Medical Center have settled the lawsuit filed by the Med Center over stray current from the Main Street line. One less thing for Metro to have to deal with.

Crosstown (rail) traffic

Approving the construction contract with Parsons is a big step forward for the long-awaited light rail expansion in Houston. But there’s still a lot more to be done.

The Metropolitan Transit Authority will look to the Federal Transit Administration for help funding the University line. The FTA has yet to approve Metro’s environmental impact study for the line, a key element in moving the project forward.

“I’m feeling the frustration of a lot of people in this organization who are trying to get through this process,” Metro spokesman George Smalley said Thursday.

He also conceded the University line may not be completed along with the other lines by 2012, as Metro had projected. That, in turn, could affect the completion of the Uptown line.

That is because the east-west University line would connect the 4.7-mile Uptown line with the rest of the MetroRail system.

In other words, no University line, no Uptown train.

“It wouldn’t be prudent to build the Uptown line if we had no hope for the University line,” President and CEO Frank J. Wilson said Wednesday. “But if the University line is proceeding as we expect, then there’s not a reason to hold Uptown back either. It’s a carefully choreographed set of moves here.”

The Universities line has the highest ridership projection of all the new routes, followed by the Uptown line. It was always proposed as light rail, never as BRT, so the EIS didn’t change as it did for the other non-Uptown lines. It’s a linchpin to the whole system and will have the biggest impact on inner Loop mobility. Of course, it’s also been the subject of a lawsuit, which I feel confident will get filed again once we get closer to the construction phase, , not to mention the politics referenced in the story, so it could be a lot farther away from completion than Metro is willing to admit. For now, we really need to get that contract written and approved so we can at least hope to meet that 2012 goal. Christof has more on the contract that was signed this week.

Activists tell TxDOT to slow down and be open

The following is a press release from a coalition of activists, including the Sierra Club, Environment Texas, Independent Texans, Houston Tomorrow, and the CTC:

Representatives of a broad coalition of quality of life, political reform, and environmental groups and citizens from across the state are requesting that the five Commissioners of the Texas Transportation Commission (the Commission) slow down and revisit the transportation projects that they will vote on Thursday morning at 10:00 AM to include in Texas’ request to the Federal government for use of American Economic Recovery Act transportation funds. The Commission has the authority to delay the vote and tell the Texas Department of Transportation (TxDOT) to reconsider the project list.

With $1.2 billion of stimulus funding at stake, many Texans, including Texas legislators, have raised red flags, citing a lack of transparency and fairness in the process led by the TxDOT and culminating in the vote by the Commission today. The concerned groups charge that TxDOT failed to address environmental and quality of life issues, including development of alternative forms of transportation.

That vote was taken yesterday, and TxDOT went ahead with its original plans anyway. The fight isn’t over – as noted before, among the projects in scope for this is the Grand Parkway Segment E, for which there are still many hurdles to be cleared, and thus many more opportunities for the public to push back. TxDOT is also still subject to a sunset review this session, and their actions here can and will be used as evidence of whether or not they’ve made any substantive changes as they’d promised.

The rest of the release is beneath the fold. I will note that if you’re one of those people who thinks Metro should have been more transparent in their negotiations with Parsons, you ought to be holding TxDOT to a similar level of scrutiny. It’s still the public’s money, after all.


Metro approves contract with Parsons


The Metropolitan Transit Authority board of directors on Wednesday unanimously approved a $1.46 billion contract for four new light rail lines, which would add 20 miles to its lone seven-mile line along Main Street.

Under the contract, which came after almost a year of negotiations, Parsons Transportation Group is responsible for designing, building, operating and maintaining the new East End, Southeast, North and Uptown lines at an average cost of $73 million a mile. Metro has said the lines will be complete by 2012.

A fifth rail line, the University line, and an intermodal terminal near downtown still are planned, but are not included in the contract.

Metro officials said the agency intends to spend $632 million on the initial phase of the project, primarily on the East End line along Harrisburg as it is further along in the planning than the others.

“Today is obviously a very significant milestone in our building of the Metro Solutions program,” board Chairman David Wolff said moments before the vote. “Our objective is to improve transit in Houston.”

It would have been nice, of course, if the process that had gotten us here had been more open. Maybe this time that lesson will sink in. Be that as it may, after all this time I’m just glad we finally got here.

The contract includes $50 million in incentives for Parsons and the other contractors to complete the project early. Parsons and Veolia Transportation, which operates systems in 150 cities in the United States and Canada, will team up as the operations and maintenance contractor. Parsons also will be responsible for any design defects for five years after completion of the rail lines.


Jeff Moseley, president of the Greater Houston Partnership, told the Metro board that Houston’s business community was pleased with the inclusion of community input to help determine whether incentives should be awarded.

Under the contract, the community and Metro leaders will “score” contractors on their ability to maintain physical access to neighborhoods and businesses during construction of the light rail expansion.

At least they learned that much from the Main Street experience. Progress!

Construction on the initial phase of the project likely will begin no earlier than June, a Metro spokesman said.

After all the delays, roadblocks, and do-overs, I’ll say again that I’m just glad we’ve finally cleared this hurdle and can even talk about a start date for construction. Now let’s make sure it doesn’t start slipping so that 2012 completion goal remains plausible.

Metro to vote on rail contract

The good news: Metro is set to vote on the contract to build the next light rail lines. The bad news is that they’re doing is amid headlines like Metro refuses to discuss rail contract details before vote.

The Metropolitan Transit Authority’s board is expected to vote on a multi-billion-dollar light rail contract tomorrow, but agency officials have refused to disclose details about the scope and price of the contract prior to the board action.

The board is reviewing the proposed contract in a closed-door executive session this afternoon.

Board President David Wolff on Tuesday defended the agency’s silence, saying negotiations with its builder, Parsons Transportation Group, likely will continue up until Wednesday’s meeting and that the terms of the contract also are likely to change.

Metro spokesman George Smalley today declined to disclose any details of the pending agreement, saying it still was being negotiated.

The board is scheduled to vote at 2 p.m. Wednesday at Metro’s downtown office.

“If the public can’t find out what’s going on until two seconds before the board makes a decision, that’s just too late,” said Jennifer Peebles, of the non-partisan Web advocacy group, Texas Watchdog. “If they are not giving details before the vote and not allowing us a chance to weigh in, they’re making decisions in a bubble.”

sigh I swear, if we could ever get through one step of this process without Metro doing something annoying or puzzling, we might actually get these lines built before I’m too old to use them. Doing things under wraps is a bad idea for HISD, and it’s a bad idea for Metro, too. I agree with Texas Watchdog that doing this in the open is not going to jeopardize Parsons’ willingness to sign on the dotted line, and if it does, we made a bad choice. All I can say is I hope there aren’t any hidden stink bombs in this contract, because if there are, it’ll be too late to do anything about it by the time someone notices.

Metro vote on light rail contract delayed


Metro’s board Chairman David Wolff has called off [today]’s vote on a contract with the agency’s rail builder in favor of a special board meeting next month.

The Metropolitan Transit Authority has been in negotiations with Parsons Transportation Group since last April to build four new rail lines: North, East End, Southeast and Uptown.

The board was expected to take up the contract with Parsons during Thursday’s board meeting.

According to a Metro news release, the proposed contract now will be the lone item to be considered at a March 5 board meeting.

Ah, well. I’ve waited this long, I can wait two more weeks, as long as it gets done.

Unfortunately, it looks like the Metro board will also have to discuss getting a smaller piece of the stimulus pie than they had originally hoped.

Metro’s share of the federal economic stimulus package is $92 million, about half of what was anticipated, the agency’s CEO and President Frank J. Wilson said this morning.

The final version of the stimulus bill reduced the $180 million the agency had anticipated it would receive, he said.


Metro had requested $410 million in stimulus funding to begin [the North and Southeast] lines in addition to $70 million to convert High Occupancy Vehicle lanes into toll lanes.

The transit agency previously announced that the stimulus and other federal funds would be sufficient to begin construction on the North and Southeast lines this year.

Sheesh, you’d think I could get one piece of good transit news on my birthday. Is that so much to ask? I just hope this doesn’t screw up their funding calculations.

Some action on the rail construction front


After two years of negotiations with two firms, the Metropolitan Transit Authority may be close to reaching a deal with a contractor to build and operate its next four light rail lines.

“We’re in final negotiations,” said George Smalley, a Metro spokesman. “In a negotiation, though, you never know until it’s really over.”

The pending breakthrough with Parsons Transportation Group comes three years before Metro has said all five of its additional rail lines will be complete. The fifth rail line, the University line, remains in preliminary stages of development; another agreement will have to reached on that line.

Despite the tight time frame for the new lines, Metro officials say they are sticking to the 2012 target date.


Metro leaders remain confident that the five lines, which total 30 miles, can be completed on schedule.

“We’re still set on that path,” Smalley said, “but it doesn’t mean it’s going to be easy.”

I’m glad he’s confident, but honestly, I don’t see how it’s possible. Maybe we can get the North, Southeast, and Harrisburg lines done by then, assuming overpass issue doesn’t turn into a lawsuit. Even if we assume that there’s no further litigation coming for the Universities line – not a bet I’d be willing to make – who knows how long it will be before they hammer out an agreement for that line, which will be the longest and most care-intensive line to build. And the Uptown line is a non-starter until we’re sure the U-line is going forward. Frankly, I’ll be happy if all five lines are done by 2014.

But hey, whatever the case, I’m just thrilled to see this next step get taken. It’s way past time for it to happen. Now if we can start talking about where we go from here as well, I’ll be ecstatic.