Second Ave. Sagas

On the MTA’s Capital Construction accountability problem

Written by

Benjamin Kabak

in

A panoramic view of the mezzanine at the new 7 line stop at 34th St. and 11th Ave. The station will not open in June as originally predicted. (Photo by Benjamin Kabak)

Last week was a rough one for MTA Capital Construction. A few hours after we learned that East Side Access will cost $10 billion and will be delayed until 2021, the MTA’s Board materials revealed the news that the 7 line extension wouldn’t be opening in June after all. It could be ready by September; it could be ready by the fourth quarter of 2014. Either way, it wasn’t a good way to end the week.

Over the past decade, delays and cost overruns have become the norm. The first phase of the Second Ave. Subway was supposed to be in service a few years ago; the 7 line was originally proposed for the 2012 Olympics; the Fulton St. Transit Center had an initial opening date of 2007. On a smaller scale, we’ve seen station rehabs fall months, or in some cases years, behind schedule, and something as simple as a staircase redo or an elevator repair can seem endless.

The litany of missed deadlines and cost overruns for only the MTA’s megaprojects could fill a post, and I’m not going to recite them here again. Everything is late, and nothing is on budget. The latest news though has New Yorkers casting a wary eye toward Second Ave. If these other projects are late, can we reasonably expect the Second Ave. Subway to open on time in December of 2016?

That question itself has no easy answer, and there’s some controversy behind it. Back in July of 2009, a federal report questioned the MTA’s own timelines. While the MTA’s worst-case scenarios then predicted an opening date of July 2017, the feds didn’t see the project reaching completion prior to August 2017 and noted that construction could stretch into 2018. The MTA aggressively disputed that account.

At the time, MTA CC President Michael Horodniceanu, in no uncertain words, committed to a 2016 date. It was, he said, “set, as far as I’m concerned, in stone.” He did warn that the MTA has “a variety of factors that many times are unanticipated.” It was a firm commitment with a hedge, but since then, the MTA has taken pains to repeat their belief that the Second Ave. Subway will be ready by mid-2016. The feds haven’t revised their estimates one way or another. (Note that when the MTA announced the 2016 date, it also believed East Side Access would open in 2016 as well.)

In materials released for Monday’s meetings, the MTA reiterated its 2016 launch date for the Second Ave. Subway, but should we expect it? I don’t have a firm answer, but with history as our guide, I’m not placing any bets. The MTA hasn’t delivered a major project on time yet (and we can dispute whether a 2016 launch date for the East Side’s new subway line should even be considered “on time”). I’m struck though by something Horodniceanu said when discussing the Fulton St. Transit Hub back in 2009. “What I present today,” he said of plans to open the new hub in 2014, “I stand by. I expect you to hold me accountable to it.” This came years before a bunch of politicians called the 7 line extension “on time and on budget” a few weeks ago. It was a laughable claim then just as it is now.

The appeal to accountability is the irony in Horodniceanu’s five-year-old statement as public accountability, at least, has been lacking. No one has been held accountable for the failure to realize deadlines, and nothing much has changed over the past decade of capital works. Later on Monday, Horodniceanu will take the spotlight when he presents the latest on East Side Access, and the accountability should start now. If our transit network is to expand, the MTA has to figure out why these projects’ initial budgets and timelines are so wrong and how it can avoid these problems in the future. After a bad week, New Yorkers needs that accountability now more than ever.

Comments

27 responses to “On the MTA’s Capital Construction accountability problem”

  1. Michael K

    What we need is a little bit of whatever they are s drinking in Salt Lake City.

    Reply
  2. Michael Plasmeier (theplaz)

    Ben, what do you propose?

    Reply
  3. John-2

    Maybe the MTA should do the same thing they do at the access points to their brudges and tunnels, and put in 24/7/365 webcams in the construction site areas, so anyone can open their browser window and watch what was going on (or what’s not going on) underground at the various locations.

    Reply
    1. Josh K

      This is a fantastic idea

      Another idea is inserting clauses into the bidding process that happen in other countries:

      * Finishing a job on time costs X
      * If you finish the job early, you get paid X plus a bonus Y
      * If you finish the job late, you get paid X and penalised Z
      * The city is never accountable for more than a fixed cost and a predetermined bonus payment, and there’s no such thing as a cost overrun

      With incentives in place, I wonder if contractors would add additional staff to get jobs done quicker in order to get higher bonuses, and everyone wins.

      Reply
      1. SEAN

        What you describe is sometimes done with road construction & should be done elsewhere. The feds cant control their own budgets & time lines much less predict the same for others.

        Reply
      2. Phantom

        I doubt that the problem is principally with contractors.

        They deliver on time and closer to budget more often everywhere else.

        NY, and its bad labor laws, and other things particular to NY State and NY City are the problem.

        NY is the problem.

        Reply
        1. John

          In a gianormous bureaucracy, the hold-ups can be in many places. But it’s possible if anyone could click and watch an underground webcam over a period of days or weeks and see that little is changing, while it might be boring, it would give the public the option of not being sandbagged every 18-24 months when the deadlines get pushed back and the cost estimates go up, because they could see the lack of progress for themselves (or conversely, if the MTA and the contractors got their act together, they could see ESA or the SAS beginning to take its final form).

          Reply
        2. Nathanael

          The problem is principally with contractors. Most big contractors will get away with all kinds of crap if they can…

          …but almost everywhere in the world *except* New York, there is a functioning system for overseeing contractors so that they know they can’t get away with crap.

          So the problem is something which should be fixed by New York.

          Remember the South Ferry station, where the contractor cheated the MTA blind by building a leaky station, and got away with it.

          Reply
  4. Fasbender

    Does anyone have a link to the MTA materials being presented today?

    Reply
    1. Chris C

      MTA website

      ‘MTA Info’ tab then ‘Board Materials’ et voila !

      Reply
  5. anon_coward

    just because some PHB makes up a schedule doesn’t mean its based on any kind of reality for the project

    Reply
  6. JK

    Incentive contracts (bonus early completion, penalty late completion) worked extremely well for NYC DOT on the billion dollar rebuilds of the East River Bridges. But massive overruns for subways seems the norm in the NYC and London. In the last decade, UK govt tried shifting all of the of the risk to private consortiums working in the Tube. That utterly failed when the consortiums all went bankrupt from cost overruns and the taxpayer was left holding the bag and a giant legal mess. How does the NYC DEC compare with Third Water Tunnel work? Is that technically less complex than these rail projects?

    Reply
    1. Richard

      Fair point although it is early days it is possible that Transport for London has broken out of that cycle. The UK National Statistics Office has just reported on an interim review on the Crossrail project. To everyone’s surprise it appears on target and on budget. I realise things could still go adrift as the project will not be fully complete until December 2018 (according to the current project timetable) but I was pleasantly surprised by the positive tone of the NAO report. If this is correct in its assumptions it may auger well for the next proposed London mega project – Crossrail 2.

      It might be worth doing a comparison between the TfL approach and the present MTA one

      Reply
  7. lawhawk

    When you have a lack of companies with the size/scope to handle some complex projects, you’re left with fewer options for who to contract with. Or the smaller companies band together to file joint bids on projects.

    They’ll low-ball bids and then quickly find that delivering on the terms is all but impossible, and they quickly increase costs, which are passed on.

    The process is a balancing act. You want bids that are low enough that the work can proceed, but not so low as to ignore the actual costs of getting the project completed. That also means having an institutional knowledge at the MTA (or PANY or other agency) of managing these projects on time and on budget. That knowledge has all but been nonexistent, and it would seem that the only way to get something close to an on-time project that’s on-budget is to do cost plus incentive deals, that reward contractors for on-time or better performance that meets the agreed-upon standards.

    The alternative is to bring these formerly outsourced projects back in-house and doing the work that way but I don’t see that happening on the mega projects that are in the pipeline or under consideration.

    Reply
    1. Raffi

      You’re not wrong but we don’t really know what’s going on in there. I’d refer to Ryan’s last comment on the previous post on the ESA delay.

      At this point it’s become a chronic problem. MTA got a post-Sandy boost of good-will and they’ve squandered it, in my opinion. The work on ESA at least needs to be stopped, period, before any more money is paid out; and an independent audit done as to how things got to this point. Not only is the delay unconscionable, any more blind expenditure is tantamount to stealing from the taxpaying and riding public in the MTA area.

      What’s more, I believe it’s a winnable political fight if some legislators see fit to take it up, because it pits New York City and the Hudson Valley against a project that overwhelmingly benefits Long Island.

      Reply
      1. Nathanael

        Don’t underestimate the problems with shady, thieving contractors. The situations with South Ferry and the #7 line both point to problems with contractors.

        Reply
  8. Michael

    There are a couple points that I want to touch upon:

    1) There’s the current political meme: “The government can not do anything right!” That has been promoted in a variety of ways and forms for some time, with some folks benefiting from promoting that view point.

    2) It is often the case that various projects are very complex: to both design and build, that also involve numerous subcontractors, suppliers, etc. Coordinating all of those elements is not easy. However the public is only given measure of the project: “Is it on time and budget?” As if no other measures apply.

    However, it should noted that after the project is completed, there will be a crowd of critics who will say plenty of the following:

    – If the project was completed on time – it should have cost less.
    – If the project was delayed for whatever reason, that the project should have been completed earlier.
    – However or whenever the project is completed – that it cost too much for what was achieved. Or the infamous – they forgot or did not do something and now it is going to cost money to add it. Even if that “something” was not technologically possible or in use at the time of construction. The designers “failed” because they could not predict the future.
    – Once the project is completed – that the project is not beautiful enough, and that it could look better.
    – Once the project is complete – that the project is simply too beautiful, and that the masses require something cheaper, uglier, most important – shoddily built, so that is could be wrecked, and something else built later by another owner.
    – If the completed project replaced something that was at the site earlier, there will be those who will complain that the older item was better, cheaper, and more beautiful than the completed project.
    – That is it a miracle that government ever actually completed a task.
    – If the project involved the building of under-ground infrastructure – The public will complain about the elements that can be plainly seen – as if that represents the whole of the project. The usefulness of the underground built infrastructure will not be appreciated until much later.

    3. In the current news world where it seems that only headlines matter, we the public are not told the amounts of progress, the reasons for the various delays, the difficulties of the process, etc. From a selling news perspective, some of that kind of stuff is boring, it does not sell. What sells are headlines – “it’s the project is delayed, there’s huge cost over-runs from the projected amounts, etc.” Then there’s the easy count-down – this project is delayed, that project’s delayed, etc. As if that is all that matters, and nothing else.

    4. There is the very old but very useful maxim: A typical project requires: Time, Money and Manpower – however only two of those items can be controlled. The typical critic acts as if all of those items can be controlled and manipulated at the same time. The typical critic is usually amazed that plenty of stuff costs plenty of money! They are truly surprised that the corner general store simply does not stock “pre-built subway systems”, or “180-feet working escalators”, etc.

    5. At the Whitehall Street Ferry Terminal, the escalators were damaged by Hurricane Sandy in October 2012, and they have been closed ever since. The elevator has also damaged in the storm. (It should be noted that there was plenty of damage from the storm in plenty of places, there is still a lot of recovery work to be done.) Considering past outages on the escalators within the various forms of the Ferry Terminal – it is on its usual schedule for repair, considering the amounts of escalator repair work that has to be done in NYC, at this time. The whole process usually takes 1.5 to 2 years to fix the escalators, regardless of money or who’s in charge.

    6. That all of this will be replayed with the next project. There is always, “the next project.”

    Mike

    Reply
    1. VLM

      tl;dr

      But in all seriousness, why are so quick to repeatedly excuse gross ineptitude by the MTA?

      Reply
    2. George

      Mike has a good point. Who are we, the unwashed masses, to expect anything out of our transportation agencies? How dare we complain that something came out not the way it was promised? What gives us the power to demand that government does what it is supposed to do. And when we get something that works, we invariably complain about it. All we do is bitch and moan. Why, you all make me sick. Next time you gripe about a delayed subway project, remind yourself that you have been bamboozled by the mass media — and then tell me how you feel. You should feel dirty and ashamed.

      Reply
      1. SEAN

        That was your BEST POST TO DATE Mike, right on the money.

        Reply
        1. VLM

          No, it isn’t. It’s terrible. That’s my initial point, and I think George agrees.

          Reply
    3. Quirk

      Not surprising — another wall of text.

      TL;DR

      Reply
    4. Chris

      You are excusing as the vagaries of fate what is not even incompetence but deliberate deception. Projects like this one are sold to the public with costs and timeframes that have no basis in fact, because if the agency had given actual reality-based estimates on cost and timetable the project would never have been approved.

      Reply
    5. Abraham

      Well, while you’re right that people will complain about everything, there’s a matter of scale here. Dissatisfaction because a project is billions over budget and years late is not nitpicking. It’s a real, serious concern. And the inherent complexities of civil engineering and construction management, while real, aren’t excuses either. They’re par for the course and the people running the show should know how to deal with those issues in a reasonable manner. That’s kind of the point of their supposedly being professionals.

      I can sympathize with you a bit because I do tire of people complaining about the MTA when it’s clear they don’t know what they’re talking about, but that really isn’t the case on this site. Something has to change. Actually, many things have to change, but there’s so much wrong I’m not sure where one should begin.

      Reply
  9. Nathanael

    I’d like to point out that there is some behind-the-scenes improvement.

    With the South Ferry subway station, the contractor *got away* with substandard building techniques, built a station which leaked water, and got paid for it.

    With the #7 line, the contractors got *caught* trying to use substandard equipment *before the line opened* and are being forced to replace it.

    It may not be obvious that this is an improvement, but it is. The problems with contractor cheating are starting to be addressed. This is a good thing for the Second Avenue Subway project.

    Reply
  10. Nathanael

    I’d like to point out that “measure once, cut twice” may apply.

    There are a number of Amtrak/NYS projects upstate which haven’t broken ground, or which broke ground 3 or 4 years late. This is because those years were spent ironing out the details, getting them right, getting proper cost estimates, doing geological surveys and preliminary engineering, negotiating, etc.

    I expect the *construction* schedules on those projects to run on time and close to budget. By the time construction starts, the people overseeing the projects will have a really good understanding of exactly what is involved.

    The MTA’s megaprojects seem to have started with insufficient in-house expertise to properly oversee the construction contractors and insufficient in-house expertise to estimate prices correctly. Therefore, lots of unexpected stuff *at construction time*…

    Reply
  11. Michael

    I truly do not believe that I in any shape or form – repeatedly excused gross ineptitude by the MTA or other public authorities, or even on privately-financed projects. I talked about the nature of completing a large project, and the delays that can occur, in general – in the second paragraph.

    I did not suggest that folks who are upset about some aspect of a public project keep quiet and not complain to their government leaders or others. Please point to a single statement where I said folks should not speak their minds. Please tell me where I said that cost over-runs or delays are not serious concerns?

    “Dissatisfaction because a project is billions over budget and years late is not nitpicking.” I never said that looking at cost-over runs or delays was nit-picking!

    I plainly said that there are plenty of folks that express and present the idea that cost over-runs and delays are for all practical purposes the only measures to ever look at. I clearly and plainly said that cost over-runs and delays were not the only issues that should be looked at, as one reviews what is happening in the course of a given project. There are plenty of issues to look at – from the conception, to the various designs, construction, finances, completion, usage, etc., a whole host of issues in a large project.

    Speaking generally, each given project can have a history of issues, sometimes un-expected happenings, plenty of bad things going on, etc., or none or little of that. The regular person would have to compile an encyclopedia of news clippings & reports (if they exist) to understand in detail all of the issues going on with each particular project (by the MTA or others). Most folks simply do not have the time for that. They depend upon the media to fill them in on what is happening with a particular project, or the various projects going on. What does the media report? What makes headlines and captures eyeballs! Such that “cost over-runs and delays” are what makes the news! Much too often that is almost the only discussion, with little depth of the other issues, etc.

    I do however note the patterns of some of the criticisms that have been made about various projects in the past, because they often follow a pattern. I do question the nature and purpose of criticism, and the stance of being critical. My view is that criticism is useful when it advices our ability to do better the next time, and the time after that, and for the future. However for criticism to be really useful, understanding and context is needed – something that takes time. It can not be done in only 140 characters!

    Am I expressive in my writing. Yes – and I am still working on that. Yes, I can be cynical, and I’m working on that too. (Smile) There were a few statements in the comments that seemed attributed to me, things that I did not express.

    I brought up the story about the repair of the escalators at the Whitehall Ferry Terminal, due to the history of such repair projects. There has not been a completed on-time escalator repair project in the Whitehall Ferry Terminal since 1990. I’ve read articles in the Staten Island Advance in the past bemoaning the delays over the years, with each new instance. I know that whatever dates are printed on the project signs won’t happen. Is that “repeatedly excusing gross ineptitude” – no, I do not think so. I recently read a report about the state of such repairs in many stations and places through-out the city. Which placed this particular repair project in context. I however had to spend a bit of time searching for the information to place it in context.

    As is usual, if there is a discussion about a particular project being delayed – often in the media or in the forum circles – there often is not a real in-depth discussion of the issues and reasons WHY a particular project has been delayed. Or why the projected costs have risen. The majority of time the discussions will center on the delay, and how much the total project will cost – as if nothing else matters!!

    In the current political climate – there are those who say, “The government can do nothing right!” That has been promoted in a variety of ways and forms for some time, with some folks benefiting from promoting that view point. Before we buy into that notion, it is good to be clear about what was/is actually going on – not just leave our examination limited to only 2 issues.

    As we are learning about the issues surrounding Gov. Chris Christie in New Jersey, there can be a variety of issues related to a project that is useful to report upon, even if the project is not built. Yes, cost over-runs and delays are important, but so are other aspects of any given project. Cost over-runs and delays are not the only things that matter!

    Mike

    Reply

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