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Report cites shortcomings of high-speed train effort

(The Business Review of Albany, N.Y., posted the following article by Eric Durr on its website on June 12.)

ALBANY, N.Y. -- New York's $75 million project to put seven high-speed trains on the Amtrak route running from Albany, N.Y., to New York City has been plagued by management weaknesses, technical problems and payment control shortcomings, according to three audits released on June 12 by state Comptroller Alan Hevesi.

These problems have contributed to putting the high-profile Department of Transportation/Amtrak deal at least $21 million behind budget and years behind schedule, Hevesi said.

"The Empire Corridor is a vital part of our state's transportation system, and the link between New York City and Albany is one of the most heavily traveled Amtrak routes in the nation," Hevesi said in a written statement. "I am concerned that today, five years and $51.5 million after the Turboliner modernization project was commenced, just two of the seven trains included in the project are in service."

Amtrak is currently running one of the Turboliners, from the Rensselaer Rail Station to Penn Station and back daily. The trains were built in 1976 by Rohr Inc, a San Diego firm, and are being remodeled at SuperSteel Schenectady.

Even when all seven trains are delivered to the DOT, rail travel between New York City and Albany won't get any faster because the tracks must be overhauled, and Amtrak is short of funds, Hevesi said.

"The millions spent for train modernization will not make travel noticeably faster until $140 million in improvements are made to tracks, signals and grade crossings," Hevesi said. "Neither DOT nor Amtrak appear to have plans in place or funds identified to complete the necessary work, so it is as if they are creating Formula One race cars to drive on city streets."

Hevesi's auditors found that significant weakness in the DOT's management of the project and a lack of experience by both the DOT and SuperSteel Schenectady Inc. contributed to the delay in overhauling the five-car train sets. Another factor contributing to the delay was the unexpected discovery of asbestos in engine and passenger compartments being refurbished by SuperSteel, contrary to information provided by Amtrak, which originally commissioned the trains, the audit report says.

In a separate report the auditors identified weaknesses in the inspection monitoring process used by DOT and SuperSteel. The technical assistance advice from engineering consultants was not effectively incorporated into the Turboliner remanufacturing process, the report says.

The third audit found more than $1 million in payments to SuperSteel for which the DOT could not provide proper documentation. There were other shortcomings in DOT's controls over payments made to SuperSteel.

SuperSteel Schenectady Plant Manager Dave Stanbury said that Hevesi's reports are dated. While there where delays in remanufacturing the Turboliners, SuperSteel is now finishing the trains with no problems, he said.

"There is one train ready for finalization now," Stanbury said. That train will be ready for delivering to Amtrak within a few weeks and a forth finished train will follow shortly after that, he said,

While the Hevesi report referred to "technical problems", Amtrak has reported no difficulties with the trains they have been running, Stanbury said.

DOT officials did not immediately respond to Hevesi's statement.

Amtrak spokesman Dan Stessel had no comment on the audit.

The three audits, audit report 2002-S-54, audit report 2002-S-52, and audit report 2002 S-15, are due to be posted on the Comptrollers Office Web site at www.ocs.state.ny.us, said Dan Weiller, a spokesman for Hevesi.

"I am pleased that a New York State company is handling the Turboliner project, and we owe it to train riders and taxpayers to ensure that the job is done well and without further cost overruns," Hevesi said. "The ongoing delays and other problems with this project are especially troubling because, throughout our auditing process, we raised many of these concerns to DOT."

Amtrak's failure to order some of the transmissions and engines that it agreed to provide for the project will also lead to more delay's Hevesi said.

The Turboliners are capable of running at 125 miles per hour once the track on Amtrak's Empire Corridor is upgraded. Financially troubled Amtrak, though, has been unable to spend the estimated $140 million needed to make improvements in tracks, signals and grade crossings. Currently, most trains serving the Empire Corridor operate between 75 and 95 miles per hour.

"I am asking DOT to work with Amtrak and SSSI to develop a plan to complete the Turboliners without further delays and cost overruns. DOT and Amtrak also need to show us that the state intends to follow through on the High Speed Rail Program, and I will continue to demand accountability until that goal is achieved," Hevesi said.

The initial contract between DOT and SuperSteel for two Turboliners was approved in February 1998. The two trains were to be ready for use early in 1999, but only entered service early this year.

The contract was amended in September, 2000, to incorporate change orders on the first two trains and to include five additional Turboliners. The five additional trains were expected to be in service between June and December, 2002, but none are operating at this time.

The contract was amended again in November, 2001, to add change orders for all seven trains. A contract amendment submitted by DOT would extend the contract with SSSI through December 31, 2004 and modify payment methods to allow SSSI to be reimbursed for materials upon receipt, rather than when components of the project are completed.

A fourth audit by the Office of the State Comptroller relating to the high speed rail program is pending.

Friday, June 13, 2003

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