Lifetime Citizen Portal Access — AI Briefings, Alerts & Unlimited Follows
CTA amends CRRC railcar terms to manage escalation; staff warns of higher market prices for new cars
Loading...
Summary
Board placed on omnibus an amendment to CTA's contract with CRRC covering escalation indices, taxes/duties and bonding. Staff said about 230 base-order 7000-series cars have been delivered; per-car costs under the base order are around $1.5M but a contemporary independent estimate for new procurements exceeds $4.25M per car.
Kent Ray, general counsel, presented an amendment to CTA's long-standing contract with the CRRC/CFANG America joint venture to update replacement escalation indices for option railcars, reset timing to reflect current production, allocate tax and duty responsibilities prospectively from 2025, and require stronger U.S.-based bonding from the vendor.
Ray and Jeff Bora said the contract date pre-dates pandemic-era supply-chain and inflation impacts and the amendment was negotiated to avoid restarting a new procurement. Staff said CTA has received roughly 230 of the base-order railcars so far; the base-order per-car cost under the settled terms is approximately $1.5 million, while an independent market estimate for new railcar procurement today was cited at about $4.25 million per car.
Directors discussed fleet impacts, retirement of older equipment, and the funding needed to continue options; staff said funding for option orders will be approved separately by the board prior to production and noted ongoing maintenance costs for aging fleets.
