NYT Probe Reveals Factors Behind MTA’s Disturbingly High Construction Costs

The 86th Street station of the Second Avenue subway in December 2013, during its construction. (Photo Credit: Wikipedia)

A recent investigation by the New York Times revealed the MTA’s disturbingly high construction costs, as well as a discrepancy in the budget for new train platforms under Grand Central Terminal in Manhattan.

According to The Times, “The budget showed that 900 workers were being paid to dig caverns for the platforms as part of a 3.5-mile tunnel connecting the historic station to the Long Island Rail Road. But the accountant could only identify about 700 jobs that needed to be done, according to three project supervisors. Officials could not find any reason for the other 200 people to be there.

‘Nobody knew what those people were doing, if they were doing anything,’ said Michael Horodniceanu, who was then the head of construction at the MTA, which runs transit in New York. The workers were laid off, Mr. Horodniceanu said, but no one figured out how long they had been employed. “All we knew is they were each being paid about $1,000 every day.”

The discovery, which occurred in 2010 and was not disclosed to the public, illustrates one of the main issues that has helped lead to the increasing delays now tormenting millions of subway riders every day: The leaders entrusted to expand New York’s regional transit network have paid the highest construction costs in the world, spending billions of dollars that could have been used to fix existing subway tunnels, tracks, trains and signals.”

For some reason the estimated cost of the Long Island Rail Road project, known as “East Side Access,” is seven times more than the average cost would be anywhere else in the world, with the projection inflated to $12 billion, which is almost $3.5 billion per one mile of new track. Other projects recently completed in the city also cost far above the average, with the new Second Avenue subway line’s construction costing $2.5 billion per mile and the 7-line extension in 2015 costing $1.5 billion per mile.

This ridiculously inflated spending has taken place even as the MTA cuts back on important maintenance due to politicians diverting money from the transit authority.

These incredible costs have been attributed to several factors in The Times’ report.

Overstaffing is one big factor. According to the consulting firm Arup, who worked on the Second Avenue subway as well as similar projects across the globe, in New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe.”

Another factor is the lack of competition. Consultant Gary Brierley, who worked on the 7-line extension and the Second Avenue subway in addition to hundreds of similar projects, told The Times, “In other cities, you get eight bids for projects. In New York, you get two or three, and they know that, so they’ll inflate their bids if they think they can get away with it.”

Political pressures and the infamous “soft-cost,” which are the non-construction aspects of a project like preliminary designs and project managers, are the other factors which make the costs of transit construction in New York City so much higher than it is in the rest of the world.

While the findings of The Times were not disputed by the MTA, officials did defend the state of things and that all costs were necessary.

MTA chairman Joseph J. Lhota said, “We recognize this has been a problem. We’re never going to deny history. This is an issue that needs to be addressed. It needs to be attacked.”

By Hannah Hayes

 

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