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W.Pa. companies have financial interest in Philly transit agency's success

| Monday, April 8, 2013, 12:15 a.m.

Western Pennsylvania companies have millions of reasons to care about the Philadelphia-based Southeastern Pennsylvania Transportation Authority.

Local companies made $121.5 million during the past four years providing goods and services to the nation's sixth-largest transit agency, better known as SEPTA, according to an agency analysis of procurement contracts. In addition, local subcontractors have SEPTA deals worth tens of millions of dollars.

Allegheny County companies raked in $113.6 million in the past four years, the third-highest total among Pennsylvania counties behind Philadelphia ($422.5 million) and Montgomery ($166 million), the SEPTA analysis showed.

“It's a good part of our business,” said Brian Heery, president and CEO of Warrendale's Mitsubishi Electric Power Products Inc., a SEPTA subcontractor that made propulsion systems for 120 trains in a project worth $55 million.

Such work is becoming harder to find.

Just as the Port Authority struggles annually to pay for its operations, SEPTA has stared down a capital funding crisis for years, lacking the money to adequately maintain its facilities, vehicles and other equipment.

“We're walking a ragged edge,” said SEPTA Deputy General Manager Jeff Knueppel, adding that the agency has $4.7 billion in unmet capital needs and $308 million budgeted for capital projects next year.

It would be the fourth consecutive year that capital spending dropped. Knueppel points to a $110 million annual cut in capital funding from Harrisburg that happened when federal authorities shot down a state plan to make Interstate 80 a toll road and use proceeds for transportation needs, including transit.

The state provides about half of SEPTA's capital funding.

State leaders are considering a plan to raise transportation funding. In February, Gov. Tom Corbett proposed a plan that would generate $510 million for transportation in the first year and as much as $1.8 billion by the fifth. That would provide an additional $40 million for transit in the first year and $250 million by the fifth.

Legislators in both parties have said more money is needed to stave off financial crises and are working on their own plans.

“There's no question that we are well aware of the issue and paying attention,” Heery said of state funding debate.

A few companies, however, said their work with Pennsylvania transit agencies represents a small part of their business.

“We're glad for every contract we get, but we do more work nationwide,” said Terry West, sales engineer at Liberty Electronics Inc. in Franklin in Venango County, which was subcontracted to do $1.6 million in work on the SEPTA train project on which Mitsubishi worked.

West said about half the work the company does is for the military.

“For us locally, the transportation funding issue in Pennsylvania is not as big of an issue,” said Russell Glorioso, spokesman for Downtown-based Ansaldo STS USA.

The company, formerly known as Union Switch & Signal, is the prime contractor on a $99 million project to install a federally mandated train control system by 2015 that is designed to prevent crashes. It had a $13 million signal contract on Port Authority's $517 million North Shore Connector project.

Although the company has long-standing relationships with the Pennsylvania agencies, Glorioso said, much of its work is for agencies elsewhere in North America and in South America.

“It would affect us, but we have contracts everywhere. We would not be in a position where we would have to lay off half of our workforce,” Glorioso said of the prospect of its Pennsylvania work drying up.

Tom Fontaine is a staff writer for Trib Total Media. He can be reached at 412-320-7847 or tfontaine@tribweb.com.

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