Controversies plague MBTA privatization push

Recent revelations about the MBTA under the Baker administration’s control have hinted that the administration may be placing its philosophical views favoring privatization and austerity budgeting over the public interest. In October of this year, the Globe reported that the Green Line had the most derailments of any light rail in the nation in 2015. The audit identified lapses in maintenance and the use of poorly-designed, outdated cars as reasons for the derailments, issues that could stem from underinvestment and simultaneously cry out for deeper investments in public transit. The results and implications of the audit have rarely been discussed in public meetings and when they were, not all derailments were mentioned.[1]

Up until this point, Baker and his appointed MBTA officials gave the impression that they engaged in transparent and open conversations concerning all matters related to the T. By failing to discuss the audit of the Green Line openly, the administration has kept the public in the dark about the magnitude of the derailment and decided on improvement plans behind closed doors. The derailments are clear evidence of the greater need for investment in an underfunded system.

The MBTA’s contract with Keolis to operate its commuter lines has also been rife with underperformance, questionable management decisions, and potentially undue influence of private interests. In the near two years of operating the commuter lines, Keolis has been struggling to meet financial and performance benchmarks. Keolis attempted to mitigate delays and overcrowding with new train schedules, yet customers still complain of lackluster service that is increasingly worse than service experienced under municipal operation. Customers also experienced dramatic fare hikes since Keolis has come onboard and have yet to see improvements in service.[2] Across the country and the world, there are countless examples of privatization schemes backfiring at the expense of taxpayers, riders, and workers. It seems that the privatization deal with Keolis is increasingly becoming Boston’s primary example of transit privatization gone wrong.

In order to keep services going, the MBTA announced in October that it agreed to pay Keolis $66M more in addition to their unprecedented $2.68B contract. There is no guarantee that this bailout will lead to a more financially stable situation for Keolis, as they have exhibited increasingly poor financial performance throughout the contract. In its first year of operation, Keolis lost $10M. The following year they lost an additional $30M and are projecting net losses for this year as well.[3] If recent trends continue, the MBTA may be throwing good money after bad.

This $66M bailout in public dollars isn’t the only break that the MBTA has cut Keolis. In October, the MBTA quietly waived over $800,000 in fines accrued by Keolis for unprecedented poor service during the winter storms of 2015.[4] During that January, commuter lines experienced the first derailment in the entire state in years. Track failures along 30 miles of the Haverhill line caused three cars to ran off the tracks. Disruptions in service included 10 cancelled trains during the morning commute.[5]

The administration insists that these lapses in service occurred because of factors beyond Keolis’ control.[6] However, winter service under Keolis’ control was the worst it had been in years. The percent of commuter trains operating on time during the winter months has never dipped lower than in 2015. From 2011 to 2014 when the MBTA last operated the commuter lines, the percent of on-time trains never decreased by more than 20% of all trains. During Keolis’ first winter operating the trains, the percentage of on-time trains plummeted by more than 50%.[7]

Perhaps the most unnerving of controversies related to Baker’s relationship with Keolis through a consulting firm headed up by a close friend. The lobbying and media firm that was hired by Keolis to help coordinate publicity for Baker’s approval of a $66M extension to their contract is headed by Baker’s  former campaign manager.

Baker assures that his administration’s interaction with Keyser is limited only to communications strategies and does not edge into management or policy decisions. Emails that Baker’s office voluntarily released however may hint at a different story. In one email, high-ranking Keyser staff set agenda items for bi-weekly meetings with the MBTA and state Department of Transportation. Other emails show high-ranking Keyser staff expressing interest in helping the MBTA’s Fiscal and Management Control Board but warned they must stay “behind the scenes because of Keolis relationship.”[8] Such close coordination calls into question the kind of undue influence private interests represented by Keyser may have on the very administration that is supposed to be holding them accountable.

Despite poor performance and bailouts of the commuter rail contractor, Baker’s administration insists on pursuing other ways to privatize parts of the MBTA, including spending significant amounts of public dollars to hire a firm that is notorious for unilaterally recommending privatization. In October, the MBTA approved a $1M contract awarded to a consulting agency to assess the viability of privatizing their other services beyond the cash counting department,[9] including bus operations and maintenance.[10] In 2007 in Seattle, McKinsey suggested Seattle Public Schools cut back on such “high costs” as health care for teachers and recommended the system include more charter schools.[11]

These controversies call into question whether or not the administration is making decisions that prioritize the public over private interests. It’s a pattern that riders, taxpayers, and workers should watch closely. Rather than rely on the invisible (and often unaccountable) hand to improve the MBTA through private contracts, transparency and open dialogue can help generate innovative solutions that keep the MBTA within the public domain while achieving better and safer performance, more good-quality jobs, and fair prices for riders.


[1] “The Green Line had the most derailments in the nation last year,” Boston Globe, October 2016.
[2] “Commuter operator still struggles with losses,” Boston Globe, June 2016.
[3] “MBTA will pay $66m more over 6 years to commuter rail operator,” Boston Globe, July 2016.
[4] “T reversed half of fines against Keolis after winter turmoil,” Boston Globe, Oct 2016.
[5] “Despite cold-weather woes, T says it’s ready for winter season,” Boston Globe, Jan 2016.
[6] “Baker: ‘Acts of God’ justify ine waivers for Keolis,” Commonwealth Magazine, Oct 2016.
[7] “Winter is gone, but commuters’ rail problems continue,” Boston Globe, June 2015.
[8] “Baker consultant wields influence on commuter rail, charter schools,” Boston Globe, Oct 2016.
[9] “MBTA paying firm $1M to assess outsourcing options,” Boston Herald, Oct 2016.
[10] “MBTA hires McKinsey to study more privatization,” Boston Globe, Oct 2016.
[11] “Private firm gets failing grade,” Seattle Times, Dec 2007.

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