Facing budget gap, MTA eyes cuts to capital costsBy
As the 2011 calendar pages melt away, the MTA and Albany are no closer to a solution on the authority’s capital budget woes. As we know, the agency has a hole in its five-year capital plan that is at least $10 billion deep, and the authority has essentially reached its bonding limit. Yet, before it heads north this summer to argue for the dollars, Jay Walder is looking for ways to cut costs, Crain’s Insider reports today.
Many of the ideas are basically just common sense. Take a read:
Cuts resulting from the talks are intended to show legislators that state funds will be used efficiently. The New York Building Congress board of directors told Walder in a March meeting that their top cost-savings priorities included streamlining procurement and paying contractors damages if the MTA delays a project, President Dick Anderson said. “If you sign a contract that says you are responsible for delays no matter who causes them, what do you do?” Anderson asked. “You factor it into your contract.”
Some MTA agreements allow contractors to collect damages for delays, which helps them manage risk and puts pressure on the MTA to approve construction changes more quickly…Jay Simson, executive director of the New York American Council of Engineering Cos., said a pilot project to select project designers based primarily on qualifications rather than the lowest bid could produce savings.
In exchange for any changes, many of which would require legislative approval, builders would be expected to reduce fees on already contracted projects. “We hear you, and we expect this to be a two-way street,” Walder told contractors, according to Anderson.
The emphasis is mine, and it’s a change long overdue. For too long, the requirement that the MTA automatically select the lowest bidder has led to too many shoddy construction jobs, delayed projects and cost overruns. Reforming that system would do wonders for the authority’s capital project.
In addition to these changes, the authority may also consider delaying some less important projects currently slated for 2012 and beyond. Doing so would ensure funding for the big-ticket expansion efforts currently under way beneath Second Ave. and the East River, and overall, these changes could lower costs by as much as 20 percent.
For now, Albany hasn’t yet taken up the issue of capital expenditures, but it should become a major political issue throughout the summer and into the fall. As hyperbolic as it sounds, the future of our transit system depends on it.