Fleet of the Future now projected to come in hundreds of millions of dollars under budget

BART news release:

Thanks to a revised schedule, and an accelerated monthly delivery rate of new rail cars, the project is expected to cost $394 million less than when the contract was awarded in 2012.

[...]

The original contract awarded for 775 cars forecast a project cost of $2.584 billion but an October 2023 financial update lowered the forecast by 15%, to $2.190 billion. Over the course of 11 years, BART and the manufacturer, Alstom, have increased the pace of making and delivering the cars, resulting in significant savings.

I'll be honest, I'm a bit confused on how accelerating deliveries saves money.

Was BART paying Alstom by the day on this contract?

Read the transcript for the podcast here: https://www.bart.gov/news/articles/2024/news20240109

It appears that payment for these was at time of delivery and the contract had an automatic inflation adjustment every year. Therefore, speeding up delivery meant that they will have fewer years of inflation adjustments to pay, resulting in cost savings.

I understand that an assembly line has a fixed cost to maintain, even if it isn't being operated at capacity (i.e., leases on equipment for that line don't stop just because the equipment's idle) and Alstom may want to fully utilize that equipment before replacing it for a different assembly line.

So one scenario could be that if Alstom's price assumed their factory could build 20 cars, and they were bidding on the BART and MBTA Orange Line contracts at the same time, and were still working on an NYMTA contract with a contracted deliver rate of 8 cars a month (I don't know that they were, this is just a scenario), Alstom could bid to BART and MBTA a rate of 6 cars a month, possibly increasing to 10 after the NYMTA contract completes, but when Alstom lost the MBTA contract, and completed the NYMTA contract and isn't bidding on any new contracts it now has a capacity to complete the BART contract it won faster, it could be to both BART's and Alstom's benefit to not run that line at full capacity as it may allow Alstom to retain and use union labor while the SEPTA and ConnDOT orders are still being designed (we saw what a mess it is if talent disappears and you have to rebuild that labor pool with CAF's struggles with the ViewLiners for Amtrak).

Actually the original plan was to deliver 10 cars a month and Bombardier requested 16 and BART agreed. This was why the delivery schedule was shorter than originally budgeted. And the reason the shorter delivery timeframe resulted in savings was as I wrote above, because they ended up paying less in inflation adjustments.

lensovet wrote: ↑Fri Jan 12, 2024 7:18 pm Actually the original plan was to deliver 10 cars a month and Bombardier requested 16 and BART agreed. This was why the delivery schedule was shorter than originally budgeted. And the reason the shorter delivery timeframe resulted in savings was as I wrote above, because they ended up paying less in inflation adjustments.

As I might add, for both Bombardier (the manufacturer) and BART (the customer).
Which proves once again, time is money. Bringing projects in on time (or in advance) and on budget (or under budget) is best for everyone. Late projects are almost always over budget.

There's probably some oversight cost at the plant on the part of BART. It's not uncommon in other industries to have someone physically onsite. No idea if that carries over to transit.

There's a team from Alston on BART's site yes. There's no one from BART at the factory.

Will BART be able to make use of these early arriving cars to avoid high end-of-life maintenance costs on an existing fleet? Or are they ending up scrapping fully depreciated cars to make room in a yard for new cars?

The legacy fleet will be completely retired.