MBTA’s new fare system will be years late, and cost a lot more money

The MBTA had hoped to replace its current fare collection system by 2021.Josh Reynolds for The Boston Globe

An ambitious project to modernize the MBTA’s systemwide fare collection technology will go years over schedule and cost hundreds of millions more than budgeted, T officials said Monday, in a revelation that brought more criticism of the beleaguered agency.

Plans to have the technology installed by 2021 have now been pushed back to 2024 in a staggered rollout, officials said. And when one T official was asked at a hearing Monday whether the cost could balloon from around $700 million to closer to a billion, he answered simply, “Yes.”

“It’s going to be much more of a gradual transition than was originally envisioned,” said Laurel Paget-Seekins, the Massachusetts Bay Transportation Authority’s assistant general manager for policy.

The new payment system, which would allow riders to pay using a smartphone or contactless credit card, has been pitched as far more than a point-of-sale system. The T has heralded it as a key infrastructure project that would allow the T to transform its fare structure while speeding up the process of boarding vehicles.

The MBTA has prioritized the project since early 2016, and in 2017 selected San Diego industry leader Cubic Corp. to lead the work for more than $700 million. Its introduction was supposed to be rapid, at least by the standards of public transportation; the T once expected to have begun testing new fare technology by now and fully replace the old system by 2021.

However, the work quickly ran off course because of technological glitches with Cubic fare readers and unsettled policy debates at the T that led to reopened negotiations. While Cubic has built similar systems in several other cities, including London, Chicago, and an ongoing installation in New York, the MBTA has sought a highly customized system that includes commuter rail functions and data privacy protections that further complicate the project.

As part of the new plan, riders on the Fairmount commuter line will be allowed to pay with electronic CharlieCards as early as next year, satisfying a longtime demand of riders and advocates for a route that serves Boston’s low-income and minority neighborhoods. The agency is also committing to distributing CharlieCards more widely across the region.

Meanwhile, the slower rollout may also mean more time to develop policies that had concerned advocates — such as how to fine riders who skip fares, or how to ensure all riders can access trains and buses once onboard cash payments are eliminated. And turning the entire system on at once may have caused more technical problems than a slower introduction.

Officials suggested these were some of the benefits of a changed schedule. And it’s an argument that has traction with at least some transit advocates, who are pleased the agency is taking action to make the current fare collection system better while taking its time with the complex system replacement.

“A number of these things are good in my ears,” said Pamela Miles of the Greater Four Corners Action Coalition, who has been skeptical of the fare collection project and has pushed for years for the T to allow CharlieCards on the Fairmount Line. “I don’t think it’s bad news.”

But the delay marks a familiar story for public infrastructure projects in Massachusetts and beyond: A high-profile project will take much longer and cost much more than originally expected.

“It’s exactly the kind of thing we’re talking about,” said James Rooney, president of the Greater Boston Chamber of Commerce, who has called on the T to bolster its project management abilities. “These are symptoms of a project management capacity that is lacking.”

Under the new plan, the T will pay $160 million more just for the infrastructure that Cubic will install as the fare technology is replaced. The T will also be on the hook for more financing costs and those associated with operating and maintaining the system.

The agency has not yet finalized the terms of those agreements, so the final costs are not clear. But asked if it would be closer to $1 billion than $700 million, MBTA chief transformation officer Ron Renaud answered bluntly: “Yes.”

The agency will also spend more than $40 million for its existing fare equipment contractor, Scheidt & Bachmann, to upgrade the equipment that will bridge the gap between the old and new systems.

It’s necessary, in part because fare gates are often broken and because the old system is scheduled to lose the ability to process credit cards in a couple years, Renaud said. Yet the work will require installing new computers in fare gates and vending machines across the system, just to replace them with the Cubic systems a few years later.

Officials argue it will still be worthwhile to install the Cubic equipment, because it also includes complex software that will improve fare collection.

The T’s board of directors gave a cautious green light to the new schedule on Monday but said MBTA officials must prove they can manage the project before finalizing the plan early next year.

The new project schedule would yield a few changes for riders each year. In 2020, for example, the T expects Fairmount riders will be allowed to pay with CharlieCards and plans to put fare gates in place for commuter rail riders at North, South, and Back Bay stations to address concerns that fares too often go uncollected.

The new Cubic system will be rolled out in stages across the bus and subway systems over the following years, eventually allowing the T to speed bus trips by moving to an all-door boarding process and ending cash payments onboard; riders would be allowed to use cash to purchase tickets at a network of vending machines and retail outlets. Finally, in 2024, the system will be put in place on the commuter rail.

The T will put all this money and effort into replacing the fare gates at a time when some politicians and advocates have been calling on the agency to consider eliminating fares altogether to encourage more ridership.

Last week, Kansas City moved to potentially eliminate bus fares. And closer to home, Lawrence officials have experimented with eliminating fares on some local routes.

Paget-Seekins said the T is likely to continue relying on fares, which account for about $700 million a year in revenue — covering about one-third of the agency’s $2.1 billion operating budget.

“I think that I can’t read the future, but that our level of fare revenue we collect totally justifies an investment in the technology to do it,” she said.