NJ Transit threw away its gear earlier than it should have. Now it’s on the hook for $ 24.5 million.

Stationed in the woods of western Morris County are 32 rusty metal horrors covered in graffiti.

The now-discontinued ALP-44 electric locomotives ruled the tracks when new, but have been rusting on unused railroad tracks in Roxbury since 2012. NJ Transit ruled them out three years before they should have been withdrawn because the square motors were not powerful. enough to pull long trains of new heavier tiered cars and replace them with more powerful locomotives.

But before these old railroad kings could go scrapping, NJ Transit had to pay $ 24.5 million in interest that the Federal Transit Administration still had from grants it had given to NJT to buy the locomotives.

The ALP-44s were purchased for around $ 150 million between 1990 and 1996. This was done with state and FTA funds, a spokesperson for NJ Transit said.

“Because the FTA-recommended useful life of ALP-44 electric locomotives is 25 years and NJ Transit considered the ALP-44s to have expired their useful life after 22 years, he left federal interest against grants received to purchase equipment. “said Jim Smith, a spokesperson for NJ Transit.

These are not the only trains on which NJ Transit must satisfy the authorities. Over the past 13 years, 42 Comet III cars have deteriorated in a Bay Head yard, sidelined by the best tiered cars. Flooded by Hurricane Sandy in 2012, they were also deemed unusable and have been since.

32 graffiti-covered NJ Transit ALP-44 locomotive trains have been slowly rusting in the woods of Morris County for 9 years after NJ Transit deemed them not powerful enough to haul a multi-level wagon train.André Malok | NJ Advance Media for NJ.com

The ALP-44 electric locomotives were phased out and out of service in late 2011, Smith said. NJ Transit officials decided not to rebuild them, choosing to purchase more powerful ALP-46 engines as replacement.

Putting the ALP-44 fleet on hold ultimately costs NJ Transit one way or another, a former FTA official said.

“There are several options. On a straight-line basis, NJ Transit can repay or redeem the remaining federal interest. At this point, NJT has the assets and can do whatever it wants, ”said Larry Penner, a retired FTA Region 2 official and public transport advocate.

The AFC may also agree to assume the equivalent value due in another asset or similar locomotive, 100% non-federal. Finally, the FTA can deduct the amount owed, reducing the federal share in the next pending grant, Penner said.

This means that a future FTA grant could be less than $ 24.5 million, he said.

In this case, NJ Transit chose to transfer the $ 24.5 million interest from FTA to 113 Multi-Level Power Cars purchased in December 2018, a move that was approved by the federal agency in 2018. These cars , which are in production, will replace the 40-year-old Arrow electric wagons.

“This would solve the problem for (the) FTA because they got an equivalent value of interest in equipment not funded by the federal government,” said Penner.

Typically, shipping companies auction off discarded equipment after it has been replaced. This was the case last December when NJ Transit listed 20 retired Neoplan articulated buses that were replaced with newer vehicles in 2020.

It’s also what businesses and agencies do with excess equipment, said Jon Peters, professor of finance and data analytics at the College of Staten Island.

“You want to use it or get rid of it, you don’t want it lying around,” Peters said of the equipment. “If you don’t use it, throw it away and do it in an orderly fashion to get value out of it.”

Storing excess equipment also comes with costs, said Peters, an expert in transportation finance.

“The first rule of capital (assets) is that equipment must be maintained, managed and inspected,” Peters said. “There is a long life in public transport trains. “

A fleet of Comet III wagons, which were retired when the first tiered wagons were purchased in 2006, also languish in a Bay Head station – and become a sight to behold. But four years after being shelved, they were damaged by flooding during Hurricane Sandy in 2012. NJ Transit is considering selling them.

Comet III wagons

Stored for years in NJ Transit’s Bay Head marshalling yard are Comet III cars that NJ Transit has not used in years, but which cannot be thrown away until they satisfy financial interests. from the federal government. The cars were also damaged by the flooding caused by Hurricane Sandy and are being prepared for sale. Aristide Economopoulos | Advanced NJ Media

“The Comet III cars were retired from commercial service in 2008 because these cars were dated and unreliable for passenger service,” Smith said. “They were pulled and taken out of the fleet plan with no plans to repair or put them back into service, either before or after Sandy.”

The FTA also has an unspecified amount of federal interest in Comet IIIs, a spokesperson for the agency said.

“It is understood by FTA that a disposition action is currently underway for the Comet III wagons,” he said. “NJT will be required to repay the remaining value of the federal interest in the Comet III cars at the time of disposition in accordance with the requirements.”

NJ Transit is completing work necessary to prepare Comet III cars and ALP-44 locomotives for potential sale, Smith said.

“The final disposition is still pending as the assets have not been sold and a final monetary value has not been determined,” Smith said of the Comet IIIs. “NJ Transit continues to work with the FTA throughout this process. “

NJ Transit initially kept the ALP-44 locomotives and Comet III wagons as a back-up fleet.

“The Comet III cars were kept as a reserve fleet, going through the acceptance and subsequent introduction of Multilevels and ALP-45 (locomotives),” Smith said. “The ALP-44 electric locomotives were held as a reserve fleet to protect service in the event of a problem with the performance of the ALP-46 fleet. “

NJ Transit has had success in the past selling scrap rail equipment to other railways.

In 2008, Utah purchased 25 older NJ Transit Comet I cars to reduce congestion on its Front Runner commuter train line for $ 35,000 each and were refurbished at a cost of $ 400,000, a saving of $ 2.2 million per new railroad car.

NJ Transit has also been successful in recycling its own rail equipment. In 1986, an entrepreneur converted 30 old Arrow I electric railroad cars into non-motorized passenger cars for use on non-electrified railroad lines. After NJ Transit removed them, the California Department of Transportation purchased 14 cars for $ 75,000 each, which were overhauled and used on the San Joaquin line between Bakersfield and Oakland.

Peters asked why the Comet IIIs could not have been sold to another railroad when they were still valuable.

“If they were damaged in (Hurricane) Sandy, either dispose of them or restore them,” he said.

NJ Transit had potential buyers interested in the Comet IIIs, Smith said.

“The extent of repairs and movement restrictions (on other railways) made the sale of vehicles impractical,” he said. “The Comet IIIs were no longer necessary. NJ Transit is currently going through the procurement process (to sell) Comet III rail cars. “

Preparation includes disassembling fluorescent lights, collecting freon from air conditioning units, removing batteries and emptying toilet tanks from cars with toilets. Smith said.

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Larry Higgs can be reached at [email protected].

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