Home Capital Program 2015-2019 Why the MTA’s cost and credibility gap matter

Why the MTA’s cost and credibility gap matter

by Benjamin Kabak

When I was in Berlin last month, I stayed close to Unter den Linden, a wide boulevard that connects the former East Berlin to Museum Island and runs through the Brandenburg Gate where it becomes Strasse des 17. Juni as it passes through the Tiergarten. It’s a wide boulevard, and it’s the site of the German capital’s own transit megaproject. For €433 million, Berlin is building a 2.2-kilometer, 3-station U-Bahn extension that will finally join the U-5 with its U-55 progeny. Much like New York City, Berlin has had some issues delivering on-time projects, and this one is set to wrap in 2019. Still, the price is very, very right.

In New York City, meanwhile, the MTA maybe might open the 7 line extension — all $2.4 billion worth of it — before the end of the third quarter of 2015, but a City Council hearing today, MTA officials noted that the project could be delayed until October. The MTA is beginning dispatch training and teaching train operators how to run 7 trains from Times Square to 34th St., but the opening date won’t be announced for “several weeks,” according to MTA Capital Construction head Michael Horodniceanu. “We are in the final 50-yard sprint of this project,” he said.

The timeline is almost besides the point. The MTA is getting a little bit more track than Berlin and two fewer stations for nearly six times the cost. It’s stunningly disproportionate, and the 7 line isn’t alone. It’s not the most expensive subway project in the world on a per-mile basis because the 2nd Ave. Subway is. (The costs decrease a bit on a per-passenger basis, but the MTA’s cost scales are inexplicably high.) The MTA doesn’t talk much about these high costs and, tangentially, their inability to deliver anything on time, but well-positioned politicians have taken note of these issues.

On Monday, in an attempt to convince the City Council to up its contributions to the MTA’s underfunded capital plan, agency CEO and Chairman Tom Prendergast faced a sometimes-provincial, sometimes-on point City Council. After clearly laying out the agency’s financial issues, Prendergast heard from some council members who demanded, without funding, as Ydanis Rodriguez did, a subway from 207th Street in Manhattan to Fordham or from those who don’t understand that capacity increases require investment in the form of hundreds of millions of dollars to implement CBTC. (Ryan Hutchins at Capital New York summed up the hearings.)

But Prendergast, hat in hand, also faced some witheringly accurate criticism regarding the MTA’s project management skills. A certain line of argument came from Corey Johnson, the council member who represents the Hudson Yards area. Noting the 7 line extension delays, Johnson said, “It doesn’t inspire confidence” in the MTA’s ability to pull off large-scale projects. He didn’t even discuss costs (as expected since costs can be esoteric and don’t make for great sound costs).

All in all though, this gets us to the MTA’s credibility gap. We know they can’t manage costs, and we’ve seen how they manage timelines. Every few weeks, the opening date for the 7 line extension has been pushed back so that, if revenue service begins in October, it will have been 22 months since Mayor Bloomberg’s ceremonial first ride. Meanwhile, the agency continues to insist the Second Ave. Subway will open in December of 2016, and the P.R. blowback if they miss that date will be tremendous.

Overall, the MTA’s problem is one that affects its allies too. I want to argue vociferously for the MTA Capital Plan, but the agency needs to get out in front of these cost and time management issues. They have to assuage critics and proponents alike that they (a) recognize the problem and (b) are working to resolve it. Why does the Second Ave. Subway cost orders of magnitude more than similar projects throughout the developed world? We don’t know, but the MTA should be working its collective tail off trying to lower costs for future phases. Instead, their funding request includes $1.5 billion for a Phase 2 build-out with an indeterminate budget. That does not, as Johnson said, inspire confidence.

There’s no doubt the MTA needs funding for the capital program. The alternative is bad service and high fares without technological advancements. But until the MTA can be efficient with its spending and deliver projects on time, politicians will have arrows in their quivers they can use at will. And can you really blame them?

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PETE in the Heights June 2, 2015 - 12:07 am

You’re too kind to the MTA, Mr. Kabak. Subways are vital to New York City, but the MTA should not get any more money until they can explain their ridiculous cost structure. If it’s union work rules, then come out and say it. If it’s crazy demands for compliance with all kinds of other regs, say it. Taxpayers and voters will support the MTA if the agency comes clean. All you need to do is give politicians some smart darts to hurl at the MTA. Keep up the good work!

Larry Littlefield June 2, 2015 - 6:42 am

Let’s be specific.

New York City Transit does not have a cost or efficiency problem on the OPERATING side.

The issue is with the contractors, and related costs of capital projects.

The operating cost issues are on the LIRR.

Alon Levy June 2, 2015 - 2:07 pm

Conductors? Station agents? Train drivers who’re only behind the wheel 500 hours a year? [No, full-time isn’t feasible that I know of, but 700-800 exists in Helsinki.]

sonicboy678 June 2, 2015 - 9:18 pm

I wouldn’t use “behind the wheel” for train operators, as rail vehicles handle differently from road vehicles.

Tower18 June 3, 2015 - 11:20 am

I wonder how much more lean & efficient the internet would be if pedantry was removed.

Brooklynite June 2, 2015 - 11:20 pm

Salaries are inflated, trains are overstaffed, and routine maintenance is filled with crews doing nothing. Yeah, MTA operations don’t have a cost problem.

sonicboy678 June 3, 2015 - 6:02 am

I agree with one of those, question one, and outright disagree with one.

Bolwerk June 3, 2015 - 8:53 am

Salaries are not especially inflated in the TWU realm. I don’t think the TWU is even that guilty of do-nothingism.

Might be the TWU has a lot of bad work rules, some roles that are now archaic, but they aren’t guilty of the malicious theft the suburban railroads (at least the LIRR) pulls off.

Nathanael June 8, 2015 - 3:35 pm

The conductors on NYC Subway trains are pretty much useless. The station agents would be useful if they were encouraged to get out of their booths and walk around (like they do in London). There’s a need for a lot of employment but a bunch of people are employed in do-nothing positions, while simultaneously important valuable work goes undone.

This is normally called “mismanagement”, though it’s quite clear the TWU local is part of the problem. They should be able to come up with a win-win solution where everyone stays employed but conductors are removed in favor of more train drivers and more station agents, and where station agents are mostly out of the booth interacting with the public.

The LIRR is twenty times worse in terms of bad work rules, *and* the LIRR has a large amount of well-documented actual theft, at least in the maintenance department — workers falsifying their time cards, etc.

Metro-North actually has a fairly decent reputation, though the overstaffing is as standard for commuter railroads.

Phantom June 3, 2015 - 8:29 pm

Some of the same contractors ie Skanska deliver the goods in other cities for less money.

The problem rests with NYC and NYS and MTA and PA and with bad labor law and bad unions.

FIx the environment and you will get somewhere

Brandon June 2, 2015 - 12:48 pm

but the MTA should not get any more money until they can explain their ridiculous cost structure

We could say “no new expansions until…” but not funding the capital plan isn’t going to help them get their house in order, its going to ruin the physical plant and raise costs overall while making service problems inevitable.

Nathanael June 8, 2015 - 3:36 pm

No more funding for the state legislature until they can explain their ridiculous cost structure.

sonicboy678 June 2, 2015 - 1:27 pm

“No more money for the MTA until they discuss their costs!”

Watch everything unravel almost instantly. You’re basically saying to simply cease funding public transportation, the blood of New York.

Woody June 11, 2015 - 2:19 pm

Prevailing wages are almost 3 times as much on public projects as on jobs for the private sector!

“New York YIMBY

Construction Workers On NYC’s Public Projects Make
Up To 177% More Than Private Industry Counterparts

JUNE 3, 2015

New York City’s infrastructure crisis stems from many issues, but one of the biggest problems in maintaining and expanding the city’s arteries are construction costs, which have ballooned into a stratosphere of unknown numbers and complete non-transparency on the part of city agencies. But now YIMBY has obtained data showing that salaries are up to 177% higher for unionized employees of contractors performing public works projects and building service work for government agencies than the prevailing wages of their respective private industry counterparts.

The gap in pay is unsurprising … The MTA is currently seeking to close a $14 billion gap in its five-year capital plan, yet it cannot tell the public how a $1.5 billion downpayment on the second phase of the Second Avenue Subway will be spent, or what specifically it is for.”

More at

With a great table listing yearly INCOMES for the two types of employees.

Abba June 2, 2015 - 12:24 am

Just open the 7 line ext already.

Riverduck June 2, 2015 - 9:43 am

I don’t know if the MTA is allowed to open the station while they haven’t finished testing on the safety systems. I don’t know a lot about modern safety codes. But if the MTA opens the station without the elevators working, I can’t imagine disability advocates will be happy, since the ADA act requires that the MTA makes its new stations accessible.

A man from the United Spinal Association, James Weisman, actually sued the MTA a few years ago because they didn’t plan on making Dyckman St (1) accessible after rehabbing it.


sonicboy678 June 2, 2015 - 1:24 pm

Thing is, I don’t see why there can’t be a temporary shuttle until the elevators are finished. All that needs to be done is to bring people from Times Square to Hudson Yards and back until the elevators are finally in service.

Henry June 3, 2015 - 10:44 pm

Sure. Why don’t we force disabled people to get off the trains, go up 70 feet from the 7 line platforms into the busiest intersection in the world, and make them wait however long for a dingy shuttle bus? It’ll be separate, but still equal!

Eric June 4, 2015 - 5:46 am

Keeping the subway closed doesn’t help the 0.1% of people who need elevators. All it does is hurt the 99.9%.

Henry June 4, 2015 - 9:41 am

Ah, yes, the 99.9% of people who are currently physically incapable of getting to the Javits Center by either walking, using the M34, or a cab, and the poor office workers who can’t even go inside their unfinished buildings at Hudson Yards.

Besides, it’s not as if the elevator problem was fixed long ago, and the current issue is testing communications, signalling, fire alarm and HVAC systems, which able-bodied people certainly don’t need.

Bolwerk June 4, 2015 - 10:39 am

Or, alternatively: the 99.9% who are doing those things, thereby taking the transportation more suitable for the disabled. Maybe I’m wrong, but I think I’d prefer a surface bus route across Manhattan if I’m in a wheelchair. But since I’m not, I’m probably with vast majority of people who would prefer a subway ride.

And, quite seriously, how often do you see wheelchair users on the subway? I know it happens, but it seems very unusual. The subway sucks for them even with accessibility.

(I agree with your latter point though.)

Henry June 4, 2015 - 12:32 pm

That’d be an issue if the M34 were actually crowded, but the few times I have taken it from Javits (when conventions were in town, of course) the bus by Javits is generally extremely empty.

ADA isn’t just for those in wheelchairs. It’s also for those in crutches (which I have seen), or walkers, or the blind, or any other number of disabilities. In the case of a convention center, it wouldn’t be entirely unreasonable for someone with oversized luggage items to try and use the station, and baggage on an escalator is generally not recommended or safe.

Henry June 4, 2015 - 12:32 pm

*those with walkers, if I wasn’t being clear.

Bolwerk June 4, 2015 - 2:52 pm

The people entirely ruled out of using stairs and escalators are in wheelchairs. But any of those groups might be happier on a bus because of frailty or whatever.

Nathanael June 8, 2015 - 3:38 pm


In cities where the subways are *actually accessible*, they are routinely preferred to buses by the mobility-impaired. Preferred by a LOT.

Personal experience here.

Nathanael June 8, 2015 - 3:37 pm

Bolwerk: you’re wrong. I say this as someone who pushes someone in a wheelchair around Manhattan occasionally. The subway is preferable period.

sonicboy678 June 5, 2015 - 9:40 pm

You completely missed the point. It’s not supposed to be permanent, much like how an existing elevator being closed is only (supposed to be) temporary. Once the elevators are fully operational, the shuttle service will end.

Henry June 5, 2015 - 11:45 pm

Right, just like how the lack of subway service on Second Avenue after the destruction of the els was not supposed to be permanent either.

In any case, as previously stated in another comment, the elevator is no longer the issue. But if you’ve got a dead horse to beat, why let it go to waste?

Abc June 2, 2015 - 2:32 am

The teachers union that gets an insanely bloated 1/3rd of the entire NYC budget doesn’t have to defend their ineffective costs for failing schools.

I want cheap transit too but let’s not single out and penalise transit.

Larry Littlefield June 2, 2015 - 6:44 am

And the police have 2.8 times more officers per 100,000 people than the U.S. average, and demand more. I’ve chronicled all of that.

Nonetheless, something has to be done about what the MTA is charged in the capital plan.

Tim June 2, 2015 - 9:27 am

In fairness, the NYC crime rates are pretty low per capita in comparison to other big cities in this country.

Brandon June 2, 2015 - 12:53 pm

Which is why we don’t need so many cops, most of the work of which is responsive to crimes, not preventative.

Bolwerk June 2, 2015 - 12:54 pm

Eh? According to reported statistics, NYC violent crime in general is probably middling-high for larger cities.

The NYC homicide category, specifically, is low. Probably partly because police can’t really fake homicides that easily (unless they’re car accidents), and partly because of strict gun control.

Larry Littlefield June 2, 2015 - 2:24 pm

When people finish reading my post on infrastructure finance from the Census of Governments and downloading the spreadsheet


Note that I also wrote on the uniformed services.


And the schools.


Bolwerk June 4, 2015 - 10:41 am

I always find the most interesting metric to be cops per square mile or km or whatever. New York is off the charts in that regard.

We’re basically under occupation.

Woody June 6, 2015 - 12:17 pm

This “liberal” city is under Occupation by Confederate sympathizers. The most petty of laws are severely enforced against the descendants of slaves.

Do the citizens really want sellers of looses to be arrested at all, much less strangled to death on the sidewalk?

Do we want arrests for jaywalking?

Do we really want marijuana arrests? (Those arrests will then be used to deny scholarships to black kids, when we know the same laws are NOT enforced in white neighborhoods.)

Do we want to bring back stop-and-frisk, as former Mayor Giuliani called for this week? We know that stop-and-frisk was heavily used against black and brown youths but hardly at all against white kids.

Couldn’t we reduce the harshness of the Occupation and reduce the spending on it, and cut the number of cops, letting them seek honest work elsewhere, and shift that money to transport and other needed work?

Chet June 2, 2015 - 10:51 pm

As a teacher for the past 30 years I can tell that salaries might be the largest part of the school budget, but it is hardly eating up 1/3rd of the city’s budget. Paper, textbooks (electronic ones as well) computer, smartboards, keeping schools clean and safe, all the bean counters at Tweed, food services, bus services, and the list goes on and on and on.

Above my computer are four college degrees. There are plenty of lawyers, finance people, engineers, etc. who have a hell of lot less education that I do, and have a lot more control of the job they do as well and get paid many times what I do. It takes a NYC teacher TWENTY-TWO years to reach top salary.

And one other thing- overwhelmingly, our schools are NOT failing. The media and the charter lobby would like you to believe that, but I can tell you, it is simply not true. No school is perfect, and some really do need a total overhaul, but most are doing quite well.

Don’t offer to cut my salary to pay for something else- especially when you have no clue what you are talking about.

sonicboy678 June 3, 2015 - 5:58 am

Based on what you’re saying, I assume your students believe your lessons are engaging. Is this correct, or is there at least one student who consistently disengages from your lessons?

Chet June 3, 2015 - 6:37 am

Overwhelmingly, yes, most students think their teachers, not just in my class, have engaging lessons. Does that mean that 100% of the students sitting in front of me are totally engaged in what is being taught and how it is being taught? Of course not. There is always at least that one kid who stayed up too late the night before; just isn’t interested in anything (and it is my job to find out why); the student who thinks school is a waste of time, etc.

You can have a lesson plan that works incredibly well, with 100% student engagement one period, and the very next period, with a different group of student, that same plan crashes and burns.

There is an awful lot of stuff out there about teacher effectiveness and what should be done in classrooms, etc. The problem with about 90% of it, is it written by people who have never taught, and never been in a classroom since they were students themselves.

Woody June 6, 2015 - 12:22 pm

I don’t think the fat and wasteful part of the education budget is going to education in any way, shape, or form. It is going to PENSIONS.

The teachers union was able to raise pensions retroactively, that is, for already retired teachers, as well as raising the formula to benefit teachers nearing retirement. The union thereby took away money from kids today and tomorrow in order to make life unexpectedly softer for those who were teachers in the past.

AMM June 2, 2015 - 10:55 am

Re: Berliner U-Bahn construction project.

If you look up the Wikipedia article on the U55, it appears that this project has had some, ah, issues too. (Rather reminiscent of the MTA’s chronic problems.)

The U55 was part of a planned extension of the U5 westward, ultimately to Tegel airport. The segment that is the U55 was (mostly) finished when, in 2002, Berlin realized it was running out of money. They were planning to just mothball it until they could get more money, but then the federal government threatened to demand its subsidies back. So they put this 3-station segment (which doesn’t connect to the rest of the U-Bahn network) into service in 2009.

Evidently, they found some more money, if they’ve started working on the piece that connects the U55 to the U5.

Eric June 2, 2015 - 11:13 am

“Do not worry about your difficulties in mathematics. I can assure you mine are still greater.” -Albert Einstein

The MTA has problems and Berlin has problems. But Berlin still builds subways for one sixth the cost. What Berlin calls a problem would be spectacular for the MTA, because the MTA’s standards are so much lower.

BoerumHillScott June 2, 2015 - 11:11 am

It will be interesting to see how the costs and timelines for the Los Angeles Purple Line extension costs come in. It is easily the closest comparison in the US to the SAS: a 2 track, multi mile, multi station, all underground extension through a dense area.

I expect the Purple line to be less since it has fewer stations per mile, the area is less dense, and the platforms are 3/4 the size, but even taking those factors into consideration I expect it will be much cheaper than NYC while much more expensive than the rest of the world.

eo June 2, 2015 - 11:45 am

The MTA is the product of its envoronment. There is nothing the MTA can do about it. Berlin’s metro is accessible (at least the new stuff), but there is no German ADA and all the bureauracy and lawsuits which come with our ADA. Berlin’s metro is no less safe than ours, but we have an enormous list of agencies which have to sign off on an enormous lists of stuff that the stations are “safe”. Their stations are at least as safe as ours, but there is no thousands of bureaucrats in the Fire Department, The Building Department and so on that have to sign onto everything. Blaming the MTA will not get anyone anywhere. Even if you dismantled the MTA, transfered the assets to a new agency and let it run for a while, you will end up pretty much at the same place where you started. The envoriment has made the MTA what it is. There could be some differences on the edges, but the bulk will be the same.

Practically every big problem with the MTA has its origins in the environment and cannot be solved by the MTA alone. For example, the cost overruns: not to pick on the unions, but it is the government that requires unionized labor to be used, not the MTA. It is the government that requires “Buy American”, not the MTA (think the elevators on the 7 line as an example). I am sure the same applies to the safety systems that are delaying the 7 line extension. A non-MTA example on that is the WMATA speakers on the Silver Line — the government’s regulations required that they be torn out and replaced with “certified” models.

In the private sector, regulations get push back from the regulated private actors. In the public sector, nobody is pushing back. The MTA is owned by a the government, so it does not push back on anything. Just think about it. How many times Verizon and Comcast have sued the government to overturn regulations? At least a few times a year. How many times has a transportation agency done this? How many times has the MTA or NJTransit sued to overturn any federal, state or local regulation which they are subjected to? None!

Blaming the MTA is easy, but the MTA can only change things around the edges. It is us as a society that is willing to put up with this state of affairs so this is state of transportation is what we get. The Germans clearly have different preferences, so they get different transportation. Unfortunately, different here also means “much much better”. As long as the voters do not demand it form their elected representatives, we are not going to get better transportation. Until then the only times when money will be found is when either some politician has a pet project (Cuomo and the useless AirTran) or a disaster happens (Sandy and the Amtrak’s tunnel box).

MichaelK June 2, 2015 - 5:19 pm

What he said ^^^^

Henry June 3, 2015 - 10:48 pm

The MTA’s elevators are actually sourced from Italy, so in this case “Buy America” doesn’t specifically apply.

Nathanael June 8, 2015 - 3:43 pm

The ADA exists largely because NYC Subway refused to make its system accessible on its own, and was dismissive and hostile towards, well, Paralyzed Veterans.

In Germany, thy did it voluntarily, so they didn’t have the hammer brought down on them.

Jason June 2, 2015 - 12:29 pm

I will go in another direction and blame the Governors of NY. They are after all the ones who hold the power to appoint the board of the MTA which directs the agency and its “it is what it is and we can’t change it” practices. One would think with continuing debacles like the SAS and the 7 line extension as well as the derailments and accidents that have occurred on the Metro North and the LIRR, Prendergast would assume responsibility and be gone, but instead he is nominated by Cuomo to stay on.

Benjamin Kabak June 2, 2015 - 12:45 pm

Torpedoing leaders every 10 months is one of the reasons the MTA is in the pickle in the first place. Plus, these projects and their flaws pre-date Prendergast by half a decade or more. Jettisoning him isn’t the right answer.

Jason June 2, 2015 - 12:52 pm

Metro North’s safety record IIRC was pretty spotless until his term which alone should be enough to accuse him as incompetent. Continuity of bad things is not good, however.

Anyway, I wouldn’t necessarily call for the termination of MTA board members every so often, but the point still stands that Cuomo, and the legislature, for that matter control the puppet strings at the end of the day. It was rather “endearing” to see Prendgergast being Cuomo’s lapdog after an employee came out stating without state funds, they’d have to hike the fares. That was fun to watch unfold.

sonicboy678 June 2, 2015 - 1:17 pm

It’s easy to blame Prendergast for everything wrong in recent days, even though there are numerous factors to consider for just about everything.

Alon Levy June 2, 2015 - 2:11 pm

Train accidents are low-probability, high-impact events; you shouldn’t overinterpret them on the level of a single small railroad, for the same reason you shouldn’t overinterpret the two Malaysian Airlines plane crashes.

Chris C June 3, 2015 - 9:48 am

Has anyone done a proper like for like comparison of costs in NYC against e.g. London, Paris, Berlin and Stockholm?

It’s all very well saying ‘look NYC is paying too much’ if simply looking at the ticket price and comparing.

What difference is there in pay costs for the various trades? Costs of materials? Pensions? etc etc

If you applied NYC pay rates to say Berlins how do the costs then compare for the same work?

Are the costs of contracts in NYC conflated with other elements that aren’t included in Europe because they are done as different projects but related?.

A few years ago I was looking at a large project here in the UK. People were going ‘It cost £1bn for that???’ but an analysis of that £1bn showed that the costs of the ‘that’ were about 40% of the total with the rest of the spend on building infrastructure – roads, power, water etc and clearing up the ground (it had been a previous industrial site) and demolition etc etc

Henry June 3, 2015 - 10:53 pm

This is a rough comparison of rail costs.

Adjusted for PPP materials should be roughly the same everywhere you buy it, and PPP also adjusts for local differences in costs. Either way, New York’s projects should not be triple, quadruple, or quintuples of what other cities pay, and this is before we start counting the massive money sinkhole that is East Side Access.

Nathanael June 8, 2015 - 3:45 pm

There is a culture which has developed in NYC of contractors scamming the MTA. This culture is perpetuated and exacerbated by the structure of the NY State public bidding rules, according to the people who know those rules.

patrick June 3, 2015 - 10:23 am

The thing is, the MTA always said this would be a $2 B+ project. An article I found in the Daily News just now from 2007 estimates that the project will cost $2.1 B – for one station. The project is now estimated to cost $2.4 B. So while you’re right that the project is more expensive than other subway projects internationally, it’s a little unfair to say they lack credibility in the cost estimating department in regards to the #7-Line extension.

Larry Littlefield June 3, 2015 - 11:18 am

Credibility in estimates is what is killing us.

The MTA puts stuff out to bid already announcing what it will pay, as part of its estimates. The contractors see that and add 20 percent to whoever bids lowest.

To make the next estimate for the next project more accurate, the MTA then adds 20 percent, and announces that before the next bid. And the process repeats.

It’s like executive pay and public employee pensions for those cashing in and moving out.

Nathanael June 8, 2015 - 3:46 pm

Other organizations have different public bidding procedures and as a result get different results.

In particular, it’s quite common for a bidding round to be rejected (everyone rejected) and for the agency to announce “We’re doing this in house, and fuck you all for overbidding”. I’m not sure why this happens so rarely with the MTA.

Henry June 8, 2015 - 7:37 pm

It sort of happened with the Hudson Yards work, and it happened with BusTime.

From what I understand MTA managebas a result they have lost a lot of in-house experience and have issues attracting talent, construction or otherwise. According to David Gunn, a former NYCTA president, there was also a lot of institutional experience lost when in 2003 the construction arms of all the different agencies were merged into the overarching MTA Capital Construction division.

LLQBTT June 5, 2015 - 2:37 pm

Sound familiar? Except this time, they’re getting the boot!



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