During it’s regular monthly meeting for January 2011, the SEPTA Board approved proposals to a fund fare modernization initiative; the purchase of new Regional Rail cars; and a major, long-needed station renovation project.
The first proposal authorized a loan commitment agreement with the Philadelphia Industrial Development Corp. (PIDC) Regional Center that will provide up to $175 million in funding for the New Payment Technology initiative. This includes the main “Smart Card” project, as well as related improvements to infrastructure, communications and customer service.
A modernized fare payment and collection system is critical to SEPTA’s near- and long-term financial health, as illustrated by its inclusion as a key component of the authority’s Strategic Business Plan. The system will make fare collections more efficient, and its “open” nature is expected to attract new riders. Customers will be able to pay for travel on SEPTA trains, buses and trolleys using common retail methods such as bank cards, mobile devices, and other emerging “smart” technologies. It also means a move away from outdated fare instruments such as tokens and paper transfers.
“This action by the SEPTA Board marks a major milestone in our efforts to provide our loyal customers with state-of-the-art, convenient and efficient service and equipment,” said SEPTA General Manager Joseph M. Casey.
Philadelphia Mayor Michael A. Nutter also applauded the board’s action. “The entire region benefits when outdated infrastructure is replaced with customer focused state-of-the-art technology,” Nutter said. “The new technology will serve Philadelphia residents and fundamentally transform regional transit access into an integrated network.”
New Payment Technology initiatives will be financed through the “The Welcome Fund,” a low-cost loan program developed by the PIDC Regional Center in conjunction with CanAm Enterprises, LLC. The PIDC Regional Center, which was established under the U.S. Immigrant Investor Program to administer the loan program for southeastern Pennsylvania, has provided funding for the Pennsylvania Convention Center, the Temple University Health System, the Comcast Center and several other major local projects.
SEPTA pursued innovative financing after the main fare modernization project was cut from the Fiscal Year 2011 Capital Budget due to a 25 percent reduction in funding. With the loan commitment agreement in place, SEPTA can begin to advance its New Payment Technology plans. The projects are expected to be complete in about three years.
In an unrelated action at the January 2011 meeting, the SEPTA Board approved proposal to issue up to $250 million in Grant and Fare Revenue Bonds to fund the purchase of new Silverliner V Regional Rail cars and the Wayne Junction Station renovation project.
SEPTA is purchasing 120 new Regional Rail cars under a contract with Hyundai-Rotem, and a significant portion are expected to be delivered this year. The bonds, which SEPTA has long expected to issue for the Silverliner V project, will provide up to $208 million in funding for the purchase of the railcars and related costs.
The Silverliner Vs will significantly upgrade customer service throughout the Regional Rail system. The new trains feature state-of the-art technologies and amenities. Their addition to SEPTA’s fleet will also add passenger capacity and help alleviate overcrowding.
Customers will also see service improvements through the Wayne Junction Station renovation project. The station, which sits at the heart of the Regional Rail system, is among SEPTA’s busiest. The facility was originally built in 1901, and has fallen into a serious state of disrepair.
SEPTA planned to move ahead with the Wayne Junction Station renovations this year, however, as was the case with New Payment Technology, the project was cut from the Fiscal Year 2011 Capital Budget due to the 25 percent funding reduction.
SEPTA has continued to try to find ways to advance projects cut from the budget. Financial support for the Wayne Junction Station recently came in the form of a $4 million competitive grant award from the Federal Transit Administration. The funding secured through issuing the Grant and Fare Revenue Bonds will provide up to $23 million to pay for the remaining project costs.