Home MTA Construction Feds to dig in on high costs of NYC transit construction

Feds to dig in on high costs of NYC transit construction

by Benjamin Kabak

The late-December The New York Times deep dive into the reasons behind the MTA’s massive cost problem was met with an odd degree of silence among the corridors of power in New York City. Albany, ostensibly tasked with oversight of the MTA, failed to convene a single hearing on the topic, and while the MTA has recently made noises about a task force fronted by RPA Chair (and MTA Board member) Scott Rechler that will dig in on these issues, the agency itself hasn’t said much about the conclusions from Brian Rosenthal’s series. The feds though are interested.

As part of the spending bill approved last week by Congress (which ultimately included money for Gateway despite President Trump’s bluster), the Government Accountability Office will study the high costs of construction in New York City and the U.S. at large. Brian Rosenthal had the story:

The Government Accountability Office said on Wednesday that it was preparing to launch a study of why transit construction is so much more expensive in the United States than in other parts of the world. Special attention is expected to be paid to New York City, where recent projects have cost far more than anticipated. Auditors plan to examine contracting policies, station design, project routing, regulatory barriers and other elements that drive cost, comparing practices in different cities in the United States and abroad, officials said. A final report with recommendations is to be issued by the end of the year.

The study was part of the spending bill that was approved by Congress last week. And it comes three months after an investigation by The New York Times revealed how city and state public officials had stood by as a small group of politically connected labor unions, construction companies and consulting firms drove up transit construction costs and amassed large profits.

The first phase of the Second Avenue subway on the Upper East Side of Manhattan, for instance, cost $2.5 billion for each mile of track. Another project known as East Side Access, which will carry the Long Island Rail Road to Grand Central Terminal through a 3.5-mile tunnel, is on pace to cost $3.5 billion per track mile. Elsewhere in the world, a mile of subway track typically costs $500 million or less.

As Rosenthal notes, the study had originally been a part of the 2017 spending bill, but the funding did not survive the final version of that bill. Now, it’s been revived, and results are expected within the next nine months. An RPA spokesperson called the news “fantastic” while the MTA went on the defensive. “The MTA under new leadership is aggressively tackling these issues through working groups dedicated to procurement reform and containing construction costs,” agency spokesman Jon Weinstein said to The Times. “We are implementing new processes and procedures to streamline work, stop customization and reduce change orders, all of which will help us drive down costs.”

Despite these protestations, the GAO study is guardedly good news if it helps realize substantial progress in combating costs. In reality, Rosenthal’s initial reporting in December highlighted why everything cost so much. The next step isn’t to study these costs again but rather to identify ways to lower costs and combat what I call organized corruption. Plus, as Yonah Freemark noted on Twitter, the cost problem isn’t just related to transit in New York City; every major construction project throughout the country costs more than their European or Asian counterparts. Still people are paying attention, and that can hopefully be the first steps on the path toward much needed reform. Whether you want to hold your breath on this one, though, is entirely up to you.

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SEAN March 29, 2018 - 10:40 am

Q. We all know from this & other transit sites what roll organized crime plays in construction costs as relating to NYC, but what roll do they play across the country? Even BRT projects in mid-sized cities appear to be way out of line cost wise.

Larry Littlefield March 30, 2018 - 10:37 am

The one thing the Times knows about but didn’t include was the outsized role the MTA’s contribution to private multi-employer pension funds plays overall, as a result of past pension increases for older, mostly now retired workers, and past underfunding by construction companies — on public and private jobs.

Everyone wants to cover that up — and point the finger at current workers, who often have been left with lower wages and benefits than those who came before.

It’s the same story you find everywhere else. The Feds don’t have an incentive to call this out either, because those private pension funds the MTA is being drained to get out of the hole are backstopped by the federal government PBGC.

SEAN March 30, 2018 - 2:23 pm

Larry, do you have a source? Knowing you there are 87 of them. LOL

JOSEPH P. WALL April 6, 2018 - 12:30 pm

Someday, the rumor out there has it, that the Second Avenue subway will extend all the way out to somewhere in Brooklyn,New York or even somewhere in Queens. But, it will have to be extended all the way out to its termination point in CO-OP City in The Bronx, FIRST and that, my friends won!t be done in any of our lifetimes,( our great, great, great, grandchildren will be lucky to see that ). Unless, the M.T.A BOARD has a dramatic change of heart and elevates that subway when it reaches The Bronx and, knowing the M.T.A BOARD like I do, if the Second Avenue subway is elevated outdoors when it reaches The Bronx, to me, and to a lot of other people, it just might take a year and a day ( or even more ), to even build one girder of that subway!

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