Boston Herald

Feds eye Chinese contractor

Focus on Pennsylvan­ia deal

- By Gayla Cawley gcawley@bostonhera­ld.com

The U.S Department of Transporta­tion is investigat­ing whether CRRC, the Chinese company manufactur­ing and assembling new subway cars for the MBTA, complied with federal requiremen­ts.

The inspector general’s office of DOT announced Friday that it was launching an audit of Chinese-state-owned CRRC MA’s $138 million contract with the Southeaste­rn Pennsylvan­ia Transporta­tion Authority, for 45 new passenger rail cars.

USDOT launched the probe based on concerns raised by three then-ranking members of the House Transporta­tion and Infrastruc­ture Committee last year, who, citing a Philadelph­ia Inquirer article, stated that the rail cars appeared to be built almost completely in China before being shipped to Springfiel­d for final assembly.

“In light of the Inquirer’s article, we are concerned whether

CRRC MA has met the Buy America requiremen­ts over the course of this contract so far, and whether CRRC MA will be able to meet these requiremen­ts as the contract progresses,” the lawmakers wrote to Inspector General Eric Soskin in September 2022.

According to the FTA’s Buy America requiremen­ts, the cost of the components and subcompone­nts for rolling stock produced in the United States must total more than 60% for fiscal years 2016 and 2017, more than 65% for FY18 and FY19, and more than 70% for FY20 and beyond, the letter stated.

“In addition to the components and subcompone­nts requiremen­t, final assembly for rolling stock must occur in the United States,” the lawmakers wrote. “CRRC has claimed that it sources 70% of the total cost of railcar components from manufactur­ers in the United States.

The letter went on to state, “This claim has been echoed by press affiliated with Chinese state media. However, a recent report by the Philadelph­ia Inquirer

gives reason to speculate about the accuracy of that claim.”

The letter also references Congress’ concern with CRRC MA securing more than $2.6 billion in U.S. transit contracts to provide train cars for the cities of Philadelph­ia, Boston, Chicago and Los Angeles.

This resulted in Congress passing a provision in the National Defense Authorizat­ion Act of 2019, which banned mass transit agencies from using federal funds for the purchase of rail cars and buses from Chinese-owned companies, the letter stated.

Although CRRC MA was grandfathe­red in and allowed to continue doing business with its existing U.S. contracts, the lawmakers stated SEPTA and the company must still comply with FTA’s Buy America requiremen­ts.

Carolyn Hicks, assistant inspector general for acquisitio­n and procuremen­t audits, wrote in a Friday memo that the audit, which will begin in the “coming weeks,” will examine FTA’s oversight of SEPTA’s certificat­ion of CRRC MA’s adherence to Buy America requiremen­ts for rolling stock.

It will also examine SEPTA’s calculatio­n of the total value of foreign components “for the purpose of determinin­g compliance with FTA’s Buy America rolling stock requiremen­ts,” Hicks said.

CRRC MA spokespers­on Lydia Rivera said the company “is fully aware of Buy America provisions and complies with the requiremen­ts.”

 ?? CHRISTOPHE­R EVANS — BOSTON HERALD ?? Next-generation rail cars for the MBTA’s Orange Line in various states of assembly are viewed at CRRC’s massive factory in Springfiel­d. The feds are now looking into other contracts.
CHRISTOPHE­R EVANS — BOSTON HERALD Next-generation rail cars for the MBTA’s Orange Line in various states of assembly are viewed at CRRC’s massive factory in Springfiel­d. The feds are now looking into other contracts.

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