MBTA boss says South Korean firm now promises to deliver new commuter rail coaches by early 2013

By John R. Ellement, Globe Staff

The acting general manager of the MBTA said today he is “guardedly optimistic’’ that long-promised new commuter rail coaches will arrive early next year and that all 75 cars ordered from a South Korean company will arrive by July 2014.

Jonathan R. Davis spoke in a telephone interview today from Changwon, South Korea, where he met with the top executives of Hyundai Rotem, which, the Globe has reported, has fallen about two years behind on manufacturing double-decker coaches planned to replace single-decker coaches from the 1980s.

“I told them in no uncertain terms that they have to deliver on their most recent, revised schedule,’’ Davis said. “They also have to deliver quality cars.’’

He said the revised schedule for the $190 million contract now calls for the first wave of coaches to arrive in January or February, and that the final shipment of the 75 coaches will be in the United States by July 2014.

“We are guardedly optimistic,’’ Davis said. “The proof is being able to deliver. And up to now, we have gotten promises. But they have failed to deliver. We are going to have to see if they live up to the commitment they have made to me, to the organization, and our customers.’

Davis said Hyundai is now devoting two production lines at a “very large” facility to the completion of the T contract, and currently has a total of 18 cars in various stages of completion.

He said it wasn’t until recently, and only after prodding from the T, that Hyundai assigned a second production line to the T.

“They have applied additional resources to our project,’’ said Davis.

Davis said that under the contract, Hyundai faces a maximum of $18 million in penalties for missing deadlines, including a penalty for each day they are late in delivering the new coaches. He said the T will seek to collect those penalties once the work is done, and that the total amount of money, known as liquidated damages, won’t be known until then.

“We will not make final payment until we have recovered our liquidated damages,’’ Davis said.

Davis said he met personally with M.H. Lee, the Hyundai executive in charge of the facility, and with other top managers. He said that during a meeting with Lee and Lee’s top manager, the Hyundai executive expressed his disappointment at his company's performance.

“He is also expecting no further delays,’’ Davis said of Lee. “He is disappointed at having to face this within his organization. I want to say that he is probably also embarrassed that they have not been able to deliver.’’

Davis said he believes his international trip was necessary in order to convince Hyundai executives how important the contract is to the T and its customers, and to reinforce the message that no further delays will be tolerated.

“My being here certainly has drawn the attention of the highest level of executives within Hyundai so they know how important this project is to us and to our customers,’’ he said.

He said Hyundai has contracts with transportation agenices from around the world, and elsewhere in the United States, including Philadelphia, California, and Denver.

“We want to make sure there is no further slippage,’’ he said.