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Installation lost MBTA $15.4 M

The Massachusetts Bay Transportation Authority spent an unnecessary $15.4 million in cost overruns on the CharlieCard, an automated fare collection system, between Oct. 1, 2001 and April 30, 2008, according to an audit by Office of Massachusetts State Auditor Joe DeNucci.

DeNucci said he attributes the extra spending to ‘design errors and improper planning and internal communication.’

‘This delayed the implementation of the system for one year, thereby losing the opportunity to earn approximately $2.9 million in revenue by eliminating virtually all fare evaders,’ according to DeNucci’s audit released Feb. 24.

The MBTA shortened the warranty period on 400 of the fare boxes in order to save money on the project. In 2008, the MBTA spent $606,000 on repairs that would have been covered in the original warranty, according to the audit.

‘The MBTA has the largest debt of any Transit Authority in the country,’ DeNucci’s spokesman Glenn Briere said.

The MBTA insists that the overrun spending was well worth it, and that new fare collection system has saved $13 million in the fist year, MBTA spokeswoman Lydia Rivera said.

‘We are looking towards developing ways to address the debt issues,’ Rivera said. ‘And we are working with the executive office of transportation and the Commonwealth to reduce the debt.’

The CharlieCard system helps the MBTA keep track of their revenues and account for how much they are saving from fare evasion with the implementation of new gates in place of the old turnstiles, Rivera said.

The original contract for the project did not call for the secure gates, even though the technology was readily available and in use in other cities across the country, so the MBTA incurred more overrun costs to write up a new contract that included gate installation, Briere said.

‘Good contract management is key, especially in these unsure economic times,’ Briere said.

The MBTA has teams of people who work to prevent cost overruns for projects, Rivera said.

‘Overall, we do our best to minimize cost and work within our means,’ Rivera said. ‘But with many projects we do encounter and need to address many issues.’

The state auditor’s office hopes the MBTA will learn from these mistakes for the implementation of other projects, Briere said.

‘The damage has been done,’ Briere said. ‘In the future, the T has to do a better job to make sure it doesn’t happen again.

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