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Keolis lost $19.4m in first half of 2015

Matthew Healey for The Boston Globe/File

Keolis Commuter Services, which operates the MBTA’s commuter rail, lost $19.4 million during the first half of 2015.

By Nicole Dungca Globe Staff 

Keolis Commuter Services lost $19.4 million during the first half of 2015, nearly double its losses from the previous six-month period, according to financial figures released Friday by the company, which operates the MBTA commuter rail service.

Leslie Aun, a spokeswoman for Keolis, said the bulk of the losses stemmed from the record-breaking snowstorms that hit the region last winter: higher-than-expected overtime paid to employees and expenses for utilities.

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She also cited penalties Keolis paid to the MBTA for subpar service — which included late or canceled trains but also trains that were dirty or lacked the necessary number of conductors. She blamed the aging trains, rails, and other equipment in place when Keolis took over the commuter rail service in July 2014.

“The equipment we inherited was not in the condition we would have expected and so repair costs have been disproportionately high,” Aun wrote in an e-mail.

Joe Pesaturo, a T spokesman, wrote in an e-mail that the MBTA has “absolutely no reason to believe that the losses will adversely impact customer service.”

He said the MBTA will make sure Keolis has enough money to provide the service required by its $2.68 billion, eight-year contract.

Keolis reported its losses on the same day that the fiscal control board, which oversees the MBTA, discussed the possibility of raising fares and parking fees at T lots to make up for its budget deficit. No concrete proposals were made on the fares or parking fees.

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Aun said Keolis will cut costs by “operating more efficiently,” and cutting down on overtime by filling positions that had been vacant. She said Keolis will receive financial backing from its parent company in France to help make up for the loss, but she did not specify how much.

“There’s no silver bullet or single solution,” Aun wrote.

Asked about Keolis’s losses, Governor Charlie Baker’s spokesman, Tim Buckley, said, “The administration is focused on fixing the MBTA in partnership with the [fiscal control board], improving reliability across the system, including the commuter rail, and executing the winter resiliency plan.”

Keolis, which took over operations of the commuter rail in July, spent about $184.7 million from January to June 2015, while collecting a net revenue of $165.5 million, according to results the company submitted to the MBTA, which Aun provided to the Globe. About $138.6 million of the company’s costs went toward wages and benefits, according to the report.

The report did not specify how much of the loss was attributed to penalties for subpar service. Last summer, the MBTA allowed Keolis to spend the penalty money to hire new fare collectors and customer service employees. While at least one state legislator blasted the move as a way of rewarding Keolis for poor service, both Keolis and T officials said the employees would simply improve the customer experience.

Earlier this week, Keolis touted its improved performance, saying it had the best September commuter rail performance in the state since 2006, with nearly 92 percent of its trains arriving on time.

Asked about the prospects for profitability, Aun said, “I can’t give you any projections right now on when we anticipate being profitable in Boston, but we’re making progress on many fronts, one of them being [on-time performance].”

The Globe reported in June that Keolis ended 2014 with a net loss of $9.97 million, according to an independent audit. Company officials at the time said they expected losses in the first few years of the contract.

After poor performance by the commuter rail and subway systems over the winter, Baker pushed the Legislature to create a control board to fix the MBTA’s finances and management.

Brian Lang, Steve Poftak, and Monica Tibbits-Nutt, members of the board, declined to comment on Keolis’s losses until they had been briefed on the company’s finances.

The other two members could not be reached for comment.


Nicole Dungca can be reached at nicole.dungca@globe.com
Follow her on Twitter @ndungca.