Home MTA Economics Hey, where is the money?

Hey, where is the money?

by Benjamin Kabak

With apologies to Nelly for the pun-derful headline, money was on the mind last week at the Second Ave. subway groundbreaking. For starters, there isn’t enough of it yet for this new subway line, and officials with the Transit Chapter of the Civil Service Technical Guild don’t think the money the MTA has is being spent wisely. Who woulda thunk it?

We start with the issue of funding, as reported by Reuters. According to the wire service’s reports, the MTA is still $800 million short, and Federal Transit Administration Administrator James Simpson called for some public-private partnerships. Not everyone was too thrilled with this idea, Joan Gralla reported.

Spitzer reacted noncommittally to Simpson’s proposal. Asked if New York should use public-private partnerships like Texas, which has the biggest U.S. program, Spitzer said: “Nobody is talking about that for the New York City subway.”

Chicago two years ago spurred states and cites to explore these partnerships — which are common overseas — when it got $1.83 billion by leasing its Skyway commuter toll bridge. But some fiscal monitors have bashed Chicago’s model, saying the city got too little for its 99-year lease, and gave up its right to share any extra tolls with the two companies — MIG, run by Australia’s investment bank, Macquarie Bank Ltd, and Cintra, part of Spanish construction giant Ferrovial.

In the same article, Mysore Nagaraja, the head of MTA Captial Construction, noted that the project would be finished in 2021 if funding held up. Wait a second, Mysore. I thought the the original end date was set for 2020. So we’re already a year behind schedule and nothing has happened yet. Uh oh.

Meanwhile, People’s Weekly World, a Union newspaper descended from the Daily Worker, questions the MTA’s decision to contract out some of the work for the construction of the Second Ave. subway.

The Metropolitan Transit Authority-NYC Transit contract calls for the private firm to do engineering work on the planned Second Avenue subway line, work that the union contends could be done more efficiently by in-house engineers.

It is estimated that some $384 million of the project’s anticipated $3.8 billion budget would be absorbed by this contract. This amounts to approximately $51 million for each year of the seven-year project. Union leaders report that their members could do the same work for only $8 million per year, resulting in a savings of more then $300 million over the life of the project.

Right now, I’m in no position to comment on the validity of the arguments set forth by the Civil Service Technical Guild as reported by PWW. But if the claims are accurate, I think I just found some of that missing $800 million for Phase 1 of this four-tiered project.

Sounds like we’re in for a fun ride over the next few years as the MTA gets to juggle a multi-billion-dollar public works program with a tortured history. Hold on, folks.

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