SEPTA's last new rail cars are stuck in the pipeline

In October 2010, the first of the Hyundai Rotem-made rail cars debuted on the Cynwyd line. (TOM GRALISH / Staff Photographer)

By Paul Nussbaum, Inquirer Staff Writer

Posted: October 20, 2012

SEPTA is still waiting for its last seven rail cars from Hyundai Rotem Co., the South Korean manufacturer that is assembling the Silverliner V cars at a South Philadelphia factory.

Hyundai Rotem, a subsidiary of the Hyundai automaker, is two years behind in completing delivery of 120 railcars ordered by SEPTA in 2006, and it faces millions of dollars in penalties.

So far, SEPTA has received 113 of the cars, and 108 are in service on SEPTA routes. Five of the 113 are still being tested by SEPTA workers.

The final seven cars are waiting for shipments of parts, and SEPTA spokeswoman Jerri Williams said Wednesday that SEPTA hopes to receive four of the cars by mid-November, after brake system components have been installed.

The three other cars are waiting for door components, which are not expected to be available until mid-January, Williams said.

Delays have plagued the Silverliner V's from the beginning.

The contract for the new cars was first awarded in 2004, thrown out because of competitors' complaints, and awarded again in 2006, when SEPTA ordered the 120 cars from Hyundai Rotem for $274 million.

The total cost, including spare parts and associated training and management, is $330 million.

Production snags - including material delays, design flaws, labor-management disputes, and workmanship problems - put the delivery of the new cars far behind schedule.

The new cars were ordered to replace 73 Silverliner IIs and IIIs, some dating from the 1960s. The last of those cars was retired in late June.

Hyundai Rotem had built cars for foreign transit systems, but SEPTA's order was the company's first by a U.S. transit agency. Its venture into the U.S. market has not been a smooth one.

The company in 2008 won a $190 million contract to assemble 75 double-decker train cars for Boston's commuter rail system at the South Philadelphia factory, but has fallen far behind on that job, too.

In July, Massachusetts transportation secretary Richard Davey threatened to fire Hyundai Rotem for its poor performance. Last month, the head of the Massachusetts Bay Transportation Authority, Jonathan R. Davis, went to South Korea to try to speed up production.

In June 2010, Hyundai Rotem also won a contract for about $200 million to build 50 rail cars for Denver's Regional Transit District. The first of those cars is supposed to be assembled in South Philadelphia in the fall of 2013, and the last one is scheduled to be delivered to Denver in early 2015, said Regional Transit District spokesman Kevin Flynn.

With SEPTA, Hyundai Rotem is liable for penalties of $200 for each day that each of the first 104 cars was late. Penalties are not assessed for the final 16 cars, which were purchased under an option clause in the contract.

With the new cars and its existing Silverliner IV cars, SEPTA will have a fleet of about 400 cars to carry passengers on its 13 Regional Rail lines. Passengers have faced overcrowding on rush-hour trains for several years because of shortages caused by increasing ridership, delays in new-car deliveries, and removal of cars for repairs or maintenance.

SEPTA is selling its old Silverliners to a Newark scrap dealer for about $23,000 each.

Contact Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.