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New Rail Cars In DC? Not If They're Made In Japan

Thursday, July 08, 2010 - 03:24 PM

(Washington, DC - David Schultz, WAMU News)  Metro, the D.C. area's embattled transit agency, needs new rail cars. Bad.

A third of its fleet of more than 1,100 cars have been in use since Metro trains began running -- that was in 1976.  Even before last year's deadly train crash, federal safety regulators declared these 34-year-old cars unsafe. Apparently, they are prone to severe "telescoping" - crumpling upon impact - when involved in a crash.

For years, Metro tried to replace these aging cars - as the National Transportation Safety Board had urged it to - but couldn't shore up the funding.

But in late May of this year,

Metro finalized a nearly $900 million deal with the Kawasaki Rail Car Company of Japan to purchase close to 500 brand new rail cars, allowing it to phase out its old stock. Metro made the deal happen by pooling funding from a panoply of sources - federal, state, local, and everything in between.

Almost as soon as it was inked, the deal nearly fell apart after Virginia's Republican Governor Bob McDonnell raised concerns about his state's ability to oversee Metro.  But McDonnell relented and signed off on the funding, just one day before Metro's first payment to Kawasaki came due.

All that was left was for the Federal Transit Administration to sign off on its share of the  funding - $150 million - and Metro could finally purchase these badly-needed new rail cars.

That didn't happen.

With literally hours before Metro's payment deadline, the FTA announced it would not sign off on the funding because the cars were not being made in the U.S.  This, the FTA said, violates its "Buy American" requirements.

An FTA spokesperson told me that Metro had asked the feds for an exemption to the "Buy American" clause a week before to the deadline. But, given the state of the economy right now, the FTA balked at granting money to a project that would create jobs overseas.

Then, the night before the deadline, the spokesperson said,  Metro proposed a desperate plan B that would involve building the cars in Japan, then deconstructing and reconstructing them in the U.S., in the hopes this would technically satisfy "Buy American." The FTA dismissed this out of hand, the spokesperson said.

So, with just minutes to go until the deadline, Metro was $150 million short on one of its most important contracts ever. Extreme nailbiting ensued.

Luckily for Metro, Kawasaki then announced it would extend Metro's deadline five more weeks. After all, seeing this contract fall though isn't in their interests either.

Nor is it in the federal government's. They're the ones demanding Metro replace its older cars. So the FTA will be working closely with Metro over the next five weeks - along with officials from D.C., Maryland and Virginia - to salvage this deal.  But with the FTA refusing to grant Metro a "Buy American" waiver, it's unclear what could be done to save it, short of Kawasaki relocating to the U.S.

And while Kawasaki wants to make this Metro deal happen, they probably don't want it THAT bad.

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Comments [1]

greenmidorisunflower

Kawasaki DOES manufacture in the U.S. It builds rail cars in Yonkers, New York and in Lincoln, Nebraska (in the heartland of America). In Lincoln, the company employed 1,300 people as of the end of 2009 - in consumer products and rail work, according to Bloomberg.
http://www.kawasakilincoln.com/

Jul. 15 2010 11:37 AM

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