It’s high times for close-ups on the MTA’s out-of-control capital spending, and hot on the heels of The Times’ deep dive into the MTA’s cost problems comes a long awaited Regional Plan Association report on the very same topic. The title is staid — Building Rail Transit Projects Better for Less — and doesn’t exactly roll of the tongue, but the conclusions are forceful. “The entire process of designing, bidding, and building megaprojects needs to be rethought and reformed top-down and bottom-up,” the RPA says, not mincing words.
In a certain sense, the RPA’s report takes a modest approach to cost reform goals. The RPA believes the MTA could save between 25-33% by implementing its recommendations. While those savings would bring costs more into line with the most expensive international transit projects, the MTA would still be a leader in the cost realm if, for instance, East Side Access came in at $7 billion instead of $10 or Phase 1 of the Second Ave. Subway checked in at $3 billion instead of $4.5. But the extra billions in essentially free money would be put to good use.
The full report is available as an 80-page PDF and, while not perfect, is worth the read. It delves into three case studies focusing on the Second Ave. Subway, the 7 line extension (the best of three overly expensive projects) and East Side Access before analyzing New York City in the context of its international peers. When stacked up against London (Crossrail and the Northern Line extension), Los Angeles, Paris and Madrid (along with a few other cities thrown in for good measure), our models fall apart. New York doesn’t adopt best practices when it comes to capital construction and thus cannot keep pace with technological innovations that would improve service reliability and modernize an old system as many international peer systems of a similar age have. It’s an ugly and familiar story all around.
A comprehensive set of recommendations
As with other recent pieces on the topic, the RPA is careful to spread the blame. Much to the frustration of those outside the transit realm, there is no silver bullet. “The extraordinarily high costs associated with building transit projects in New York are due to many factors, at every stage, from decisions made by political leaders at the inception of the projects to the final stages of lengthy planning, design, and construction processes. Long tolerated as an accepted natural consequence of New York’s size and dominance, these costs threaten to strangle the region’s future economic growth. Other global cities have outpaced New York in building modern infrastructure and attracting new business and residents as New York struggles to simply keep up with basic maintenance.”
To fix the problem, the RPA sets forth 22 recommendations. These include a streamlined environmental review process that could cut years off the planning process. Projects in New York can take up to seven years to get off the ground due to the environmental review requirements while similar work in Europe can begin in 18-24 months. The RPA also recommends accurate project budgets and timelines to avoid funding and procurement problems down the line; more of a reliance on off-the-shelf design and construction elements to avoid costs of customization and change orders; industry-standard project management and procurement practices; streamlined post-project review; the ever-popular work-rule reform; a ten-year capital funding pipeline to better align with construction timelines; and a reform of land-use and zoning practices so that the city and state coordinate on value capture. As a break from the familiar laundry list of reforms, the RPA also points to a shortage of skilled and qualified laborers for the work on the MTA’s slate and urges the creation of job-training centers as well.
Inside the Second Ave. Subway case study
While the RPA by and large seems to reinforce what many in the know have urged the MTA to do for years, the case studies, particularly with regards to the Second Ave. Subway, lay bare the the MTA’s problems. You can read Aaron Gordon’s analysis on the impact of cutting the third track at 72nd St., and take, for instance, the cost of phasing out the entire line:
SAS’s first phase offers many lessons for phase two, starting with how best to manage the overlap of a project with multiple phases. To date, the MTA has not completed engineering and design for phase two, which is only just getting started. This has made it impossible for the agency to coordinate the winding down of phase one with the ramping up of construction for phase two, which would have allowed the experienced crews working on phase one to move directly onto the next segment. Instead, the MTA ended major construction in January 2017 and left the neighborhood, with plans to return in roughly three years. The loss of experienced labor, current staging docks, and remote office spaces means the MTA will have to start the process all over again — adding to the time and costs of phase two as well as the disgruntlement of the neighborhood. And without institutionalizing the lessons learned from phase one, the MTA risks the loss of institutional knowledge that agency staff and project managers have developed on the job over the course of building SAS.
The report includes a one-page featurette on the decision to forego development at the six lots along 2nd Ave. that are home to ventilation plants and station entrances. The MTA lost out on approximately $100-$125 million had the city and state coordinated on rezoning and air rights transfers. As costs go, the Second Ave. Subway was subject to thousands of change orders, and the costs add up:
According to the GCA, the SAS had thousands of change orders, with 96th Street issuing 200 orders during the acceleration phase alone (a claim the MTA disputes). Change orders modified more than 30% of the contract plans. An extreme example occurred with the electrical contractor at 96th Street having over 70% of its bid scope of work modified by change orders, which were issued serially as items were discovered. “This required the general contractor to perform other work out of sequence,” noted GCA, “and in many instances, remove and replace (at its expense) work that had already been completed and installed.”
The stories and dollars just keep adding up. Take, for instance, the station costs:
The high costs of the 96th Street station can be partly explained by the inclusion of 65,000 square feet for the MTA workforce in underground facilities and office space, requiring expensive blasting. The station has hundreds of non-public-access employee spaces. This equates to three to four times as many employee spaces as any other station along the line. The MTA’s justification was that 96th is a terminus, which is only temporary because the line will actually terminate at 125th Street when phase two is completed. Instead of spending the extra millions of dollars to build these temporary facilities, the MTA should have explored the cost-effectiveness of providing employee spaces at the surface by renting commercial space.26 There are also redundant employee facilities at 86th Street and 72nd Street.
Of course, another reason SAS’s stations were extraordinarily expensive lies with the materials. The archway entrances, for example, are built of granite that is six to eight inches thick. As one MTA project manager noted, part of the problem is nothing is off the shelf, with all of the granite being custom-produced.27 Granite, by nature, is nonstandard; each piece is unique due to its geologic formation. Under Buy America procurement rules, the MTA was required to buy American materials. Yet the United States has only a few suppliers that could provide granite of this size, custom-cut to curve at around eight inches thick to support the weight of the archways. This was a deliberate material design decision that almost surely should not be repeated in the future if the MTA hopes to contain costs.
The examples go on and on and on, and by the end of the case studies, one may think that the Second Ave. Subway was designed with no regard to cost at all. The construction of Phase 1 was, from start to finish, a textbook example of how not to build a subway line at a reasonable cost and within a reasonable timeline, and the MTA has shown no indication that things will be different for Phase 2.
Criticism of the RPA’s report
For the strength of its examples, though, the RPA report has not been immune from criticism, and Alon Levy, the resident expert on transit construction costs, has weighed in with a thoughtful critique of the report that is also worth the read. Levy highlights mistakes in the details of the RPA’s cost comparisons that are hard to ignore and rightly charges the organization with an Anglo bias in that it “overvalue[s] other English-speaking countries, even when their construction costs are the highest in the world outside the US.”
Levy doesn’t hold back in his conclusion, urging the creators of reports such as these to delve deeper and draw out the necessary comparisons. He writes:
One of the things I learned working with TransitMatters is that some outside stakeholders, I haven’t been told who, react poorly to non-American comparison cases, especially non-English-speaking ones. Ignorant of the world beyond their borders, they make up excuses for why knowledge that they don’t have is less valuable. Even within the group I once had to push back against the cycle of failure when someone suggested a nifty-looking but bad idea borrowed from a low-transit-use American city. The group’s internal structure is such that it’s easy for bad ideas to get rejected, but this isn’t true of outside stakeholders, and from my conversation with Tom Wright about Gateway I believe the RPA feels much more beholden to the same stakeholders.
The cycle of failure that the RPA participates in is not the RPA’s fault, or at least not entirely. The entire United States in general and New York in particular is resistant to outside ideas. The political system in New York as well as the big nonprofits forms an ecosystem of Americans who only talk to other Americans, or to the occasional Canadian or Brit, and let bad ideas germinate while never even hearing of what best industry practices are. In this respect the RPA isn’t any worse than the average monolingual American exceptionalist, but neither is it any better.
The RPA of course knows its audience and knows how far recommendations can go within the MTA. Scott Rechler, the chair of the RPA, is a bright voice on the MTA Board, and he knows that institutional resistance to reform runs deeper. So perhaps in that sense, the report is written for its audience and goes as far as this audience is willing to go. That may be part of the problem. It is another salvo in the MTA’s war on costs, one I would read with Levy’s grain of salt but not dismiss out of hand. The question is: Who’s listening and when and how will change arrive? The city cannot afford to spend more while getting less and less each year.