SAN FRANCISCO (KCBS)— A $648-million contract signed Friday is helping shape the future of San Francisco’s public transportation system.

According to city officials, a Sacramento-based company will replace every single Muni light-rail vehicle with a more accommodating and efficient design.

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The contract approved by the Board of Supervisors represents a turning point for the entire Muni system according to San Francisco Municipal Transportation Agency (SFMTA) Director Ed Reiskin. He spoke at the signing ceremony along the Embarcadero.

“The ability to upgrade and expand our fleet in a way that will provide for much more reliable, service of higher quantity and quality of service as part of one the biggest light rail procurements in the history of the United States is something that’s just of monumental importance,” he said.

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Mayor Ed Lee said the procurement has the ability to expand to $1.2 billion over the next three years.

“We are a modern city, but we’re also growing. We’re challenged by neighbors that hadn’t had this kind of transportation needs in so many years and so we want to be able to accommodate all of our residents,” said Lee.

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The contract was awarded to Siemens Rail Systems division, which will produce 175 new fleet of the future LRVs for Muni with options for an additional 85 cars. The first should be ready to go by the end of 2016.