At a meeting at the end of July in 2003, the MTA Board decided to form the Capital Construction Company. An offshoot of the construction shops within the various agencies and an attempt at consolidating construction efforts, Capital Construction was designed to serve as a clearinghouse for all major capital programs, as the MTA said in a press release. On the precipice of a once-in-a-generation expansion effort that would see the authority build a new subway line for the first time in decades, people with specialized knowledge had to oversee the efforts.
At the time, the MTA lauded its new internal division. Then-MTA Chair Peter Kalikow had just appointed Mysore Nagarajan to head up the agency, and a bright future seemed on the horizon as the MTA prepared to build the Second Ave. Subway, the 7 line extension, the East Side Access tunnel, the Fulton St. transit hub and the new South Ferry terminal. “Moving these mega projects forward is a real challenge,” Kalikow said at the time. “We are confident that Mysore Nagaraja is the ideal person to get these jobs done, on time and within budget.”
Fast forward nearly seven years and things have not gone according to plan. The Second Ave. Subway, originally set for a Phase I completion in 2012, may open in 2017 if we’re lucky. The Fulton St. Hub is seven years later and nearly 100 percent over budget. The South Ferry Terminal opened 14 months late and with engineering difficulties that continue to this very day. The smooth sailing that Kalikow predicted in 2003 hasn’t come to pass.
In The Post yesterday, Tom Namako offered up a seemingly tortured history of MTA Capital Construction and blamed institutional bloat for the authority’s construction woes. Namako reports:
Salaries and staff at the MTA division charged with overseeing the transit agency’s $15 billion in megaprojects have ballooned for five straight years — even though many of its high-profile construction jobs fell behind schedule and ran over budget during that time. MTA Capital Construction staffing skyrocketed from 39 employees in 2004 to 151 in 2009, increasing total payroll by $10.6 million, according to records obtained by The Post.
The division’s ranks were filled with construction experts and engineers whose job it is to make sure contractors hit deadlines and don’t overspend, and to manage the $21 billion budget that includes the Second Avenue Subway and scores of station rehabs. Total payroll in 2004 — a year after the division was created — was $4.1 million. By 2009, it had grown to $14.7 million… But the MTA said the approved budget for 2010 reduced salaries and staff in the division.
Total payroll was decreased by $1.5 million, and the head count dropped by 21. When the division was created, the intent was to always keep head count below 150, a goal it has hit, said MTA spokesman Jeremy Soffin. And that’s even as the cost of mega-project contracts has increased by 187 percent and the number of contractor employees will grow by 284 percent, which happens because special construction work — like boring massive tunnels — has begun, Soffin said.
I understand the point The Post is trying to make. The money spent on capital construction has exploded in recent years, and at a time when the MTA’s operating budget is taxed, its capital expenditures have come under fire. Yet, this article seems to miss the point.
The better question about these numbers isn’t the what of it; rather, it’s the why of it. Why have costs grown so steeply over the last seven years? Since 2004, when many of the capital projects were simply plans and schematics on paper, the MTA has started digging out three train tunnels and is deploying numerous workers at sites across the city. If anything, the pace of projects has slowed because there aren’t enough people ensuring that the projects are on pace and on target. After all, when was the last time New York City witnessed any multi-billion-dollar construction projects let alone three at once?
In the end, one of the problems facing the MTA seven years ago was one of knowledge. It seems today as though the MTA and its Capital Construction department were ill prepared for the demands of new subway construction amidst a densely populated city with aging infrastructure. Lately, the various projects are proceeding on pace, and timelines and costs have settled. But there’s no denying that MTA Capital Construction had a rocky start. It’s no so much a matter of bloat as it is growing pains.
3 comments
I read that article last night and was thinking the same thing — of course the number of employees has increased. There’s far more work going on now than in 2004. Although, the role of MTACC is a bit murky. They are supposed to be the single point-of-contact for designers and contractors, so as to not burden the operations groups at NYCT and LIRR. However, they often end up being middle-men, consulting those agencies anyway to seek approval on decisions made on the Second Ave Subway, 7 Extension, and East Side Access.
But going back to the change in ’09 to ’10 budgets: “Total payroll was decreased by $1.5 million, and the head count dropped by 21.” This averages a salary of just under $71,500 for each of the 21 employees – assuming we’re just talking gross pay (if benefits are included in that figure, the salary is less). For a highly skilled, experienced, educated engineer with the responsibility over some of the largest transit projects in our lifetime, in the most expensive city in the US to live in, $71k isn’t much (perhaps they are earning more, and some administrative staff is pulling down the average – I sure hope so). You get what you pay for, and for $71k you get a well-educated but inexperienced engineer with a few years out of college, not 30 years of success in the industry.
Having said that, I wonder what the roles of these 21 people are, and why 21 of them are expendable.
The problem isn’t a waste of $20 million in administration. It’s a waste of about $5 billion in construction.
I never understood the rationale behind the formation of MTA Capital Construction – most capital projects are still managed by the individual agencies. But one effect it certainly had was to increase overhead. (Cynics might argue that this was in fact the rationale.)