Delays, Cost Overruns Found in Audit of New Jersey Transit Rail Operations

New Jersey’s state auditor found serious issues with how the New Jersey Transit’s runs rail’s operation, from on time performance goals to cost overruns in installing a federally mandate safety equipment that is behind schedule.

The report states the auditor found “weaknesses related to the timeliness of NJT efforts to implement federally required rail safety technological initiatives as well as the monitoring of vendors contracted by NJT to design and install those safety initiatives.”

Auditor Stephen Eells characterized NJT documentmentatiion to prioritize the repair or replacement of some bridges as not adequate, with main components determined to be in poor or bad condition. 

Report Findings

In an executive summary of the report, major issues facing NJT include:

  • NJT is behind schedule on its federally required safety system installation of Positive Train Control (PTC), and it is debatable whether NJT will meet the full implementation deadline of December 31, 2020.  
  • The initial budget for the PTC installation totaled $225 million. As of September 2019, the total budgeted PTC project costs are $500 million including an initial consultant ($41.4 million), a contractor ($210.3 million), a new consultant ($47.4 million), and other costs totaling $200.9 million (including in-house). 
  • NJT has not collected approximately $9.1 million in contractually allowable liquidated damages from the PTC contractor as of September 2019.  
  • A total of 174 of 679 railroad bridges owned by NJT had at least one of its main components assessed as poor or bad. A total of 47 of the 174 bridges have not been included on NJT’s repair plan.  
  • Manpower and equipment shortages contributed to NJT Rail Operations not achieving its ontime performance goals. We noted that 38 percent of the delays during calendar year 2017 through May 2019 were due to circumstances that may have been preventable by NJT.

Auditors believe NJT is so far behind schedule on its federally required safety system installation of Positive Train Control, “it is debatable whether NJT will meet the full implementation schedule of Dec. 31, 2020.” 

Failure to meet the Dec. 31 deadline to have Positive Train Control tested, certified and running could bring commuter trains to a halt, unless NJ Transit decides to keep running them and incur fines of $27,000 a day, according to

Agency Response

A response included in the report by NJ Transit President and CEO Kevin Corbett stated the agency plans to address the issues raised, while challenging others.

NJ Transit has submitted a revised schedule to the Federal Railroad Administration for PTC testing in regular service to start in the first half of 2020 to account for the software delay.

Meeting the deadline is a top priority for Corbett who promised to hold contractors accountable in providing “the deliverables required to comply with the…federal Dec. 31, 2020 deadline for PTC implementation.”

The auditor’s report determined the budget for installing PTC had nearly doubled to $500 million. The auditor wants NJT to improve monitoring of its PTC vendors and hold its consultants and contractors accountable for the failure to meet project milestones in the contracts.

Bridge Dispute

On the bridge issue, NJ Transit officials replied all bridges inspected met federal standards and are safe for rail and road traffic. Officials said bridges are prioritized based on several inspections and that list is updated annually. 

“All NJ Transit owned bridges are safe,” Corbett said.

Issues that contributed to rails delays, specifically crew shortages are being addressed. Of the 9% of trains that didn’t meet NJ Transit’s 91% on-time performance goals, Corbett said 62% of them were caused by reason outside NJ Transit’s control, such as Amtrak issues, bad weather or police activity, Corbett said.

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