Just a few weeks after the MBTA added nearly $150 million to its now-billion-dollar contract with CRRC MA, the Philadelphia-area transit system is hitting the breaks on its contract with the Chinese company.
The Southeastern Pennsylvania Transportation Authority terminated its $185 million contract for new railcars from CRRC MA “for cause,” SEPTA spokesperson John Golden said in a statement.
“The Authority is assessing its options for recouping funds that have been spent on the project,” Golden said, adding that SEPTA has paid more than $50 million. The move to terminate the contract was first reported by the Philadelphia Inquirer.
CRRC MA, which lists an address in Quincy and has a factory in Springfield, said in a statement that it’s “disappointed with SEPTA’s decision” and remains committed to getting the project back on track.
CRRC has a much larger and also fraught contract with the T, which in 2014 hired the company to build new cars on the Red and Orange lines. Following expansions of the contract in the following years, the T was supposed to have 404 new cars it purchased for about $871 million by last September. But the T has received only about a third of the cars, officials said.
With the contract now over $1 billion, the company said last month that all the cars will be delivered by the end of 2027.
CRRC spokesperson Lydia Rivera said the project “remains top-priority for CRRC” and that the 2027 timeline remains on schedule. She said the company has delivered 114 of 152 new Orange Line cars and 18 of 252 Red Line cars to the T as of Saturday.
An MBTA spokesperson said the T has “worked diligently with CRRC MA to establish a strong path forward through a renegotiated contract under new leadership.”
“CRRC MA has committed to maintaining stable production rates and delivering cars that meet our rigorous quality standards,” T spokesperson Lisa Battiston said in a statement. “The MBTA will continue to closely monitor the progress of this project and work collaboratively with CRRC MA to ensure the timely delivery of the remaining subway cars.”
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 recently. Without the new deal to add $148 million to the CRRC contract, Eng said, the T would not receive the last car until 2029 at the earliest.
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.
Taylor Dolven of the Globe staff contributed to this report.
Sean Cotter can be reached at sean.cotter@globe.com. Follow him @cotterreporter.