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Officials at the Sonoma Marin Area Rail Transit District said Friday every engine on 14 new rail cars — which, combined, cost nearly $50 million — are potentially at risk of failing and must be replaced. The stunning development will further contribute to delays in delivering passenger service promised nearly a decade ago under a taxpayer-funded rail initiative.

SMART had been aiming to launch passenger service by the end of the year, but Friday revised that plan and is now targeting late spring of 2017 to finally bring paying customers on board.

However, Farhad Mansourian, the agency’s general manager, conceded that even the new launch date may not be realistic, depending on resolution of the engine problems and progress made on safety testing.

“We’re giving ourselves a target, and at this point, the target looks good,” Mansourian said. “On a monthly basis, I’ll provide the public and (SMART’s) board with an update.”

Besides frustrating potential riders, the delays carry financial implications for the rail agency, which among other things loses out on fare revenue each day that passenger service isn’t being offered.

There were signs prior to Friday that SMART was going to have trouble meeting its self-imposed deadline to start service in 2016. The agency has ramped up safety testing on the green-and-gray trains and at crossings, but is still months away from simulating fare service and getting final approvals from federal railroad authorities to begin fare operations.

The news that the rail agency also is dealing with a potential major problem related to train engines came more than three months after Mansourian and other SMART officials first were notified that a nearly identical rail car in Toronto had experienced a catastrophic engine failure with passengers on board. No injuries were reported.

The rail car was operating on a new line serving Toronto’s airport when a piston-rod penetrated the engine block and caused the train to lose power, Lisa Cobb, a paid SMART consultant, wrote in a letter attached to Mansourian’s staff report to the rail agency’s board of directors.

The car, operated by Metrolinx, is functionally identical to those used by SMART, and was purchased through an option on SMART’s procurement contract with Sumitomo Corp. of America.

The Diesel Multiple Units, as they are called, were developed at the Nippon Sharyo factory in Toyokawa, Japan and assembled at Sumitomo’s plant in Rochelle, Illinois, to comply with SMART’s federal funding requirement to manufacture and assemble the cars in the United States. The engines were built by Cummins, Inc.

According to Cobb, Sumitomo notified SMART officials about the Toronto engine failure on July 6. Two months later, on Sept. 7, the company alerted SMART that the underlying problem was a design flaw in the engine’s crankshaft.

The parties agreed at a Sept. 14 meeting at a Cummins facility in Indiana that the engines would need to be rebuilt.

Several SMART directors said Friday they were not notified about the engine problems until recently.

Judy Arnold, a Marin County supervisor and chairwoman of SMART’s board, said she was apprised of the problems about two weeks ago. She defended the timing of the notification on the grounds that SMART staff needed time to diagnose the problem and to figure out what steps to take to remedy it.

“I don’t think there have been any secrets kept,” Arnold said Friday. “I think staff did what they needed to do.”

Mansourian said he didn’t alert his board earlier while the engine failure was being investigated because “you don’t have information.

“There was an engine failure in Canada, but why? What is it you are notifying?”

Mansourian said the decision to replace the engines does not require approval from SMART directors. The matter is listed on the board’s Wednesday meeting in Petaluma as a topic for discussion and not one requiring formal action.

In another letter attached to Mansourian’s report, a Cummins official stated that the company recommended “that it is possible to wait” to replace the engines until they have reached the mid-point of their expected life.

But Mansourian and other SMART officials argue it’s better to do the work now.

SMART’s plans call for operating six two-car trains along the initial 43-mile rail line form north Santa Rosa to downtown San Rafael, leaving the rail agency with only one spare train in the event a problem should arise.

In the worst-case scenario, Cobb wrote in her letter to the board, passengers might have to be evacuated en route to their destinations due to an engine failure. She stated that in turn could spark a loss of confidence in the system.

Said Mansourian, “For us, it was very important that we deal with a known defect now, and not take the chance or risk and move forward. Getting the engines replaced is the best thing for us to do.”

Arnold agreed, citing the example of a new rail service in Denver that debuted in April and has been beset with problems ever since.

“We want to get it right the first time,” she said.

Mansourian said the engines will be replaced one at a time, starting in November and continuing through April. He said testing in the meantime will continue on the rail cars that remain in service.

Meanwhile, the rail agency has been struggling to get warning systems at 63 crossings in Sonoma and Marin counties functioning as intended. Mansourian said Friday that the system is so complex that one problem can lead to a “domino effect that works on everything else.”

Taking trains out of service and then bringing them back online with new engines raises obvious concerns about the potential impact that might have on the testing regimen. Mansourian said he doesn’t believe that the testing process will have to be restarted on individual cars, or on the whole with the entire integrated network. But he couldn’t guarantee it.

“At this point, I don’t think we need to do it over again, but I always leave room for anything because it’s a complicated project and there are many variables,” he said.

He also couldn’t say for sure what the potential financial impacts are related to the engine problems and delays. SMART spent roughly $46.9 million on the rail cars, which are still under warranty.

Mansourian said Cummins has agreed to pick up the tab for replacing the engines. He declined to state whether SMART might in the future seek to recoup costs from the company or from the manufacturer of the cars related to lost revenue from service delays.

“Our first order of business is to take care of the problem,” he said.

Then there’s the matter of lost fare revenue. A majority of SMART directors in June adopted a fare structure based on zone travel, with a $3.50 base fare and $2 charge for each zone line crossed. That equates to an average overall fare of $5.25 with discounts factored in. Without discounts, the average fare is $7.50.

The rate structure is projected to generate initial annual revenue of $3.9 million, about 13 percent of the agency’s operating budget. Currently, about 85 percent of that $30 million operating budget is covered by sales tax from Measure Q, the voter-approved rail initiative passed by voters in 2008.

In July, SMART projected operating reserves of $18.9 million this fiscal year, an amount equal to 44  percent of the entire operations and administration budget, including debt service.

“I’m not having any financial worries at all,” Mansourian said Friday. “This is not a major financial issue. It’s a performance issue and we need to make sure it’s done as promised.”

You can reach Staff Writer Derek Moore at 707-521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.