Second Ave. Sagas

What the MTA doesn’t know about construction

Written by

Benjamin Kabak

in

The Citizens Budget Commission has joined the long line of watchdog organizations bashing the MTA for its inability to manage its capital construction program. With a new five-year plan out that currently suffers from a $10.8 billion budget gap, the CBC report criticizes the MTA for its lack of fiscal awareness and its inability to control the cost and completion schedule for its big-ticket projects.

For long-time readers of Second Ave. Sagas and for anyone who follows subway news, this report is hardly a surprise. After all, the Second Ave. Subway completion date has been pushed by nearly a decade since it was first announced, and the Fulton St. Transit Center is nearly 100 percent over budget and five or six years behind schedule. But the CBC report — available here as a PDF — is fairly stunning in its depth. On nearly every capital campaign project, the MTA has either not met costs or can’t meet its own construction timeline.

“The MTA should do a better job of managing its capital plans and be more realistic in what it promises to accomplish,” Charles Brecher, research director of the Citizens Budget Commission, said. “Now is the time to make improvements, so that the next plan is one on which the MTA can actually deliver.”

The CBC report examined nearly 800 MTA projects that totaled $18.6 billion and came away with the following conclusions as presented in its executive summary:

  • The MTA Board does not provide the public, or even collect for itself, sufficient information to determine whether the projects in the five-year plan are progressing in accordance with the plan. Available reports do not cover all of the projects in the plan, do not correspond to items and categories in the plan for covered items, and do not relate consistently to project milestones other than start and completion.
  • The limited information available for the projects indicates that the MTA encounters significant delays in work of all types with major problems in the mega-projects and signal and communication projects, but notable delays also in less complex work such as the replacement of subway cars. Of the five mega-projects, only the South Ferry Terminal has progressed substantially in accordance with the schedule; three others are delayed by at least one year, and the Fulton Street Transit Center is currently set for completion in 2014, five years behind schedule…
  • Many projects are completed close to the initial cost estimates, but cost estimates are problematic for some mega-projects, and some important signal and communication projects are seriously over budget. The cost of the Fulton Street Transit Center is nearly 90 percent above the initial estimate, and the South Ferry terminal is 24 percent above the initial estimate…Communication projects with large cost increases include Automatic Train Supervision (35 percent), customer information service on the Canarsie Line (55 percent), and computer-based train control on the Canarsie Line (51 percent).

The report highlights many of the projects I have followed over the last three years. In addition to the big-ticket items, the CBC notes that the roll-out of train information boards and an improved public address system along the A Division lines is now four years behind schedule. Even some new rolling stock orders were delayed by eight months.

To solve the problem, the CBC issued three recommendations:

  • The MTA should commit to an improved management information system for tracking capital projects and to greater transparency in informing the public about the status of its capital projects. The public should know how its money is being used. More information should be assembled centrally, it should be kept in a consistent format with clear milestones for assessing progress, and it should be made publicly available on the MTA’s website.
  • The MTA should improve its capacity to manage mega-projects and improvements in signaling and communication systems. These are the areas of greatest delays and cost increases, and they account for large sums in the proposed five- year capital plan. New procedures and an expanded pool of personnel with relevant expertise are urgently needed within the agency.
  • The next five-year plan should be based on a realistic assessment of what can be accomplished. At the end of the 2000-2004 plan fully 365 projects costing over $4.8 billion, or more than one-quarter of the total plan, had not reached the stage expected when the plan was approved. Much of the work undertaken during the 2005-2007 period examined was for projects in the previous five-year plan. It is likely that a similar proportion of the work included in the current 2005-2009 plan will have to be extended into future years. The new plan for 2010-2014 should be more realistic in anticipating the new work that can be accomplished and the funding needed to support it.

It’s almost surprising that it took the CBC two years to release this report. After all, a quick glance at the MTA’s website reveals that information is scare. For example, the page detailing construction progress for the 7 line extension hasn’t been updated since November 2008. That’s hardly informative.

For their part, the MTA said that they are working on the issues of transparency. “Today the MTA previewed an online dashboard that will provide the public with clear, updated information about all of the projects in the upcoming capital program,” MTA Spokesman Jeremy Soffin said.“For the first time, you’ll be able to search by project type, line or station to find out exactly where construction stands, why the work is necessary and whether it is on budget. The dashboard will be available online by the end of the year. We look forward to engaging with the Citizens Budget Commission and others in the ongoing public discussion on the MTA’s critical capital program.”

That dashboard would be a great step in the right direction for the MTA. There is but one question about it: Can the agency deliver it to the public on time?

Comments

13 responses to “What the MTA doesn’t know about construction”

  1. Scott E

    While I don’t dispute that there are problems in progressing with these projects, I can’t understand why the number-one focus seems to always be on transparency. A big reason that many mega-project costs and schedules are wrongly estimated is because there is very little basis for them – a perfectly valid reason. We’ve got several mega-projects ongoing now, and prior to South Ferry (which was completed after the other projects began), we haven’t seen a new subway station designed in decades. There are little few lessons from prior projects to apply to new ones. Any wrong assumptions made on one project will be carried into all of them. (These lessons must be local, considering local government, community response, labor, etc. Science is the same worldwide, but governance and people’s behaviors are not)

    If the Fulton Street design began after South Ferry was completed, I’d bet the estimates on headhouse and station construction would be more accurate. If 7-extension were completed before Second Ave. began, I’d bet the Second Ave tunneling estimates would be spot-on. Possibly so much so that it would be worth delaying some of them — it sometimes costs more to undo a mistake that was hastily made than to wait until it can be done right.

    Yes, some of the problems may be due to (mis-)management, but some is simply because there’s not a whole lot of reality to back up these estimates.

    Reply
  2. Larry Littlefield

    “The MTA Board does not provide the public, or even collect for itself, sufficient information to determine whether the projects in the five-year plan are progressing in accordance with the plan.”

    The MTA has very detailed information on the budget and schedule of every project, updated monthly and archived. It isn’t made public.

    The MTA has three major problems.

    First, it kept building during a real estate bubble, when construction costs skyrocketed, and will now cut capital spending in a real estate bust, even as construction unemployment soars. It would have been better off shutting down the capital program for a few years until prices came down, but that doesn’t work politically. (City projects also had massive cost over-runs, as did the stadiums).

    Second, all the signal contractors merged together and then went bankrupt, leaving the MTA with one primary, crippled supplier.

    Third, every time someone says “boo” the agency spends another few millions. The cost of mitigating construction projects now exceeds the cost of the projects.

    Reply
  3. Larry Littlefield

    Oh and one more thing. The MTA publishes its cost estimates, then you have bidding. You can bet the bids don’t come in much below the cost estimates, which everyone has.

    Then there are over-runs, so cost estimates are increased to more “realistic” levels for the next project. What do you think happens? Higher bids.

    What Jay Walder doesn’t understand is that, based on all the income earned by New York City residents, we cannot afford to maintain the transit system at the current cost of capital projects. We, the people, don’t have enough income. Increasing cost estimates won’t solve that problem and borrowing has made it far worse.

    Reply
  4. Boris

    Two points. First, there is only one person who can even theoretically get in trouble for this and has something to lose. None of the MTA union or management workers would suffer just because their company didn’t meet a deadline or went over budget. It’s the nature of being a government agency.

    Second, the MTA is very transparent and probably very fiscally prudent compared to whoever does our NYS DOT downstate highway projects- for which we have no figures at all, because they are neither detailed in the state budget nor audited.

    Reply
  5. AlexB

    Is there some sort of department for managing capital construction? Is there a person somewhere appointed by the MTA board who is in charge of all these projects? We always talk about the MTA’s failures at doing this or that, but the MTA is a huge organization. Why is there not a go-to person or department that can implement these changes relatively quickly; some sort of capital construction “czar”

    Reply
    1. Benjamin Kabak

      MTA Capital Construction is its own department with its own president. Much like Howard Roberts is the present of New York City Transit, Michael Horodniceanu is the head of Capital Construction. All of the capital projects though were proposed, budgeted and planned when Mysore Nagaraja was in that position. He left a few years ago For what it’s worth, Horodniceanu has been far more willing to take responsibility for these projects than Nagaraja ever appeared to.

      Reply
      1. Andrew

        To clarify, MTACC isn’t in charge of all capital projects for the MTA – only a select few “mega-projects”: South Ferry Terminal, Second Avenue Subway, East Side Access, 7 Line Extension, Fulton Street Transit Center, and maybe one or two others that don’t come to mind. Most capital projects (by far) are managed by the agencies themselves. Your standard run-of-the-mill subway station rehab or signal modernization, for instance, is managed by NYCT’s Capital Program Management department.

        Reply
        1. Andrew

          Oh, I notice that you say that “Michael Horodniceanu is the head of New York City Transit.” I assume that’s a typo – Horodniceanu is the head of MTA Capital Construction, not NYCT.

          Reply
      2. AlexB

        Thanks. Perhaps we can get Horodniceanu to implement the CBC recommendations on his own.

        Reply
        1. Andrew

          The vast majority of capital projects undertaken by the MTA’s agencies are not under Horodniceanu’s purview. Horodniceanu is responsible for a grand total of five projects.

          Reply
          1. Alon Levy

            Those five projects include the two most expensive subways in the world, of which the cheaper one is twice as expensive as the most expensive subway outside New York.

            Reply
  6. Walder and the end of new big projects :: Second Ave. Sagas | A New York City Subway Blog

    […] MTA’s big projects. With the CBC criticizing the MTA’s capital construction efforts for constant delays and cost overruns, Walder believes the MTA must focus on its current projects and not add new […]

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  7. Walder vows to end cost overruns, but at what price? :: Second Ave. Sagas | A New York City Subway Blog

    […] For the last few weeks, Jay Walder has been preaching responsible investment and an increased attention toward improving surface transit. He knows that the agency he heads has long been plagued by an inability to manage its capital projects, and a CBC report issued last week confirmed a history of cost overruns and missed deadlines. […]

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