Joan Vennochi

Rail company has inside track at T

When trains run late in Massachusetts, blame weather or old equipment.

Don’t blame the politically wired firm that’s paid billions to run the MBTA commuter rail system. Since the T owns the trains, the tracks, the switches, and the bridges, the Massachusetts Bay Commuter Railroad Company insists that it’s only responsible for the workforce. By the company’s calculation, most delays are not its fault.

For that job definition, MBCR was paid about $2.2 billion over a 10-year contract that’s due to run out in June. The next contract could run 12 years — or 30, if MBCR gets what it wants, which it often does.


The company has deep ties to Beacon Hill. It was founded by Jim O’Leary, a former MBTA general manager. Richard A. Davey, who worked for O’Leary as MBCR’s general counsel and general manager, left to become the T’s general manager and is now the state transportation secretary. That means the state’s top transportation official is an O’Leary protégé.

Get Truth and Consequences in your inbox:
Michael A. Cohen takes on the absurdities and hypocrisies of the current political moment.
Thank you for signing up! Sign up for more newsletters here

As MBCR’s contract expires, it’s vying for a new one. When he became the T’s GM, Davey recused himself from all decisions relating to his old company. As transportation secretary, he recused himself from this contract decision. O’Leary said the two “have never had a conversation about it.”

It’s up to Beverly Scott, the T’s new general manager, to enforce a fair and transparent process for awarding what happens to be the biggest commuter rail contract in North America.

Just three weeks into the job, Scott said she recognizes the stakes. “This is a mega-level contract,” she said in an interview. “I’ll be the one sitting in this chair. I’m not unclear about who needs to own this . . . We’re talking about billions of dollars.”

It’s a huge contract. Yet there’s only one other potential bidder besides MBCR — Keolis, a French transportation firm. Scott said that’s not surprising because only a few companies in the world are qualified to bid.


But MBCR has worked the inside track for a long time and that discourages competition. Even as she promises a level playing field, Scott said, ‘I’m not being Pollyanna-ish. One of the bidders is the current provider . . . You can’t take that away from them.”

Because of the way it assigns blame for delays to weather and equipment, MBCR claims “95 percent on-time performance in 7 of 9 years.” In 2011, the Globe’s Sean Murphy and Scott Allen reported that MBCR collected millions in bonuses for “on-time performance” even when the system’s overall service was poor. The payouts were possible because the MBTA added contract language that was never discussed at MBTA board meetings. The language meant the company was rewarded instead of penalized, and it ended up ducking $32.6 million in fines.

Behind the scenes, O’Leary has been lobbying for a long-term deal. In exchange for that security, the company would invest millions in infrastructure the cash-strapped T needs but can’t afford. O’Leary said this represents the progressive model being used in other major cities. But if a 30-year deal is indeed progress, there should be public debate about the merits. The language to make it happen shouldn’t be tucked into the next transportation bill, and it shouldn’t automatically lead to O’Leary’s company.

O’Leary said the long-term model “was discussed for a year and a half” but the T decided “not to pursue that direction.’’ From her new perch as general manager, Scott said a super long-term deal is “not on the table.” The current request for proposal calls for an eight-year contract, with an option to renew up to 4 years.

What happens next will reveal how level the playing field really is and how much Scott controls it. At a meeting this week, Scott told both teams there will be a “straight up,” open evaluation. She also said she expects “military silence” from bid evaluators and anyone who breaks it “is not going to have a job.”


Keolis is awaiting information it needs from the T, via MBCR, before it can submit a bid. Said O’Leary: “We’ve made everything available the T requested from us. Everything they have asked of us, we’ve given it to them.”

The Massachusetts Bay Commuter Railroad Company has deep ties to Beacon Hill.

But O’Leary is used to having the inside track at the T. He also knows how to duck responsiblity for breakdowns and delays.

Joan Vennochi can be reached at vennochi@globe.com. Follow her on Twitter @Joan_Vennochi.