Streetcar delay: Assessing the impact

Cincinnati’s first streetcar vehicle will arrive in town from a New York manufacturing plant up to three months late, but it’s still too early to know if the latest project delay will affect the scheduled service start date.

One thing is certain: The margin for error on the project is shrinking.

Critical tests are scheduled for this month and could lead to further delays if they show more work is necessary.

“It could be a showstopper,” said John Deatrick, the city’s streetcar project leader. “I don’t want to frighten anyone, but it could be ... big trouble.”

Skepticism abounds at City Hall about the streetcar route opening for business on Sept. 15, 2016. The company building the streetcar vehicles recently revealed it will blow next month’s deadline and needs another 8-12 weeks before making its delivery.

“I am alarmed by this,” Councilwoman Amy Murray said. “I’m greatly concerned, because if it goes any further than this, we are going to be in trouble.”

As of right now, though, the streetcar remains on schedule to open on time, Councilwoman Yvette Simpson said, and vehicle production is essentially out of the city's control. Councilman Chris Seelbach downplayed the impact of the delay.

“I know that there will be people who are very alarmed,” Seelbach said. “However, to me this is a little bit of a non-issue. This isn’t going to affect the opening of the streetcar. ... I would say these are normal proceedings on a major transportation project.”

Cincinnati.com and other media outlets reported the existence of a delay Monday. The extent of streetcar vehicle manufacturer CAF USA’s delay were revealed to the public at City Council’s transportation committee meeting on Tuesday.

Deatrick and his team repeatedly said CAF USA’s delay should not push back the date that the Downtown and Over-the-Rhine system opens to passengers.

But streetcar leaders could not offer many answers to council’s questions about whether the delay will cause a chain reaction of other delays and additional costs to city taxpayers. Deatrick just found out about CAF USA’s delay in mid-July, and he said it may be another month before he has answers.

“It seems a little insufficient to say, ‘We can’t make a projection of what the cost to the city might potentially be for each day of delay, week of delay, etc,’ ” Councilman P.G. Sittenfeld said.

CAF USA’s delay is the latest in a litany of issues that Cincinnati’s streetcar project has faced the past eight years. Originally projected to cost $110 million, the project now costs nearly $150 million. Annual operating costs also have greatly increased from original projections. Political hand-wringing and funding hurdles have caused several delays for the streetcar, originally projected to open in 2010.

This isn’t the first time CAF USA has delayed the delivery of rail cars. In January, the company delivered six light-rail vehicles to Houston eight months later than planned.

Cincinnati’s streetcar vehicles and 3.6-mile track are required to undergo a battery of federally required mechanical and safety tests before service could begin.

CAF USA, which has a plant in Elmira Heights, New York, ran into issues during testing and inspection of Cincinnati’s first vehicle, according to the city’s monthly streetcar report. The company also has changed its project manager and had issues with sub-suppliers.

The first vehicle is scheduled undergo some critical tests this month to its brake and HVAC systems, Deatrick said. The brake testing is being done in Germany. Problems with that test could end up delaying the opening of the streetcar system, Deatrick said.

The manufacturer – a subsidiary of Spain-based Construcciones y Auxiliar de Ferrocarriles – was supposed to deliver the first streetcar vehicle to Cincinnati on Sept. 17. All five vehicles were supposed to be here by Dec. 17.

Project leaders are not yet certain of a new delivery date for the first vehicle, although they believe it’ll be sometime in November. They say they should know more by the end of this month.

CAF USA should have a sense of urgency to move quickly, city officials say, because the company is supposed to pay the city a $1,000 fine each day the first streetcar vehicle is late arriving to town, according to the contract.

It remains uncertain whether CAF USA will pay. CAF USA Vice President Virginia Verdeja has not returned several messages from The Enquirer this week.

“If CAF USA doesn’t deliver on time, we need to sue them and exercise our rights under the contract to get our money back,” Mayor John Cranley said. “We’re entitled to penalties, and they should pay us any delay costs.”

Conversely, city taxpayers may end up having to pay for CAF USA’s delay. The city has reworked its contract with LTK Engineering Services, which performs the day-to-day oversight of the streetcar vehicle manufacturing. Another three months of work for CAF USA could mean the city would have to pay LTK for three additional months.

Councilman Seelbach, a streetcar supporter, said he believes “we’re going to be made whole as a result of the CAF delay.”

The delay could cause construction and operations contractors to re-work some of their plans, and that also could cost additional money.

Seelbach said he is encouraged that construction work is on time and on budget, and that nearly $1 million is projected to be left over in the project’s contingency fund.

Not necessarily, project leader Deatrick says.

“I’d just like to encourage you not to think the $1 million is going to be left,” Deatrick said.