DeFazio joins those questioning SEPTA's contract with CRRC

House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Ore.) is asking the Federal Transit Administration to look into a contract between the Southeastern Pennsylvania Transportation Authority and the China Railway Rolling Stock Corp. (CRRC) after three Republican congressmen penned a letter earlier this week.

DeFazio sent a letter Sept. 29 to FTA Administrator Nuria Fernandez calling for an investigation into the $138 million contract, which has CRRC, a Chinese-government backed company, delivering 45 coach cars to SEPTA. The FTA requires transit agencies that use federal funding to comply with "Buy America" requirements, which require federally funded projects to source American-made steel, iron and manufactured goods.

DeFazio and other lawmakers are concerned about China's entry into the U.S. public transportation market and how that could harm the domestic suppliers and manufacturers.

In his letter, DeFazio asks Fernandez to "ensure that the playing field is not further tilted against domestic manufacturers." He claims Chinese state-owned enterprises like CRRC are threatening the U.S. economy by undercutting pricing and forcing American competitors out of business.

"One of the greatest threats to a strong U.S. transportation manufacturing sector is the rise of predatory Chinese state-owned and supported enterprises," DeFazio wrote.

When Congress passed the National Defense Authorization Act for Fiscal Year 2020, it attempted to address these issues by "prohibiting the use of federal transit funds to purchase rolling stock from [state-owned enterprises] in most cases," DeFazio continued.

"Unfortunately, the law also provides four transit agencies with a permanent exemption to those protections," he added.

DeFazio opposes the exemption and has tried to eliminate it through congressional action.

Earlier this week, U.S. Reps. Sam Graves (R-Mo.), Rodney Davis (R-Ill.) and Eric Crawford (R-Ark.) expressed similar concerns about the contract in a letter to U.S. Department of Transportation Inspector General Eric Soskin. In their letter, they allege CRRC is building passenger-rail cars in China and shipping them directly to SEPTA. In their view, such action appears to violate Buy America requirements, but it is possible to waive the requirements under limited circumstances. It's unclear if the requirements were waived for SEPTA.

CRRC has been awarded more than $2.6 billion in transit contracts in Philadelphia, Boston, Chicago and Los Angeles since 2014, according to their Sept. 27 letter.