MTA construction costs are too high compared with cities around the world, politicians say

[Via Garibaldi 8]

MTA construction costs surpass those in other major cities around the world, leading to a call from city and state Democratic politicians for an independent commission to study the issue. (Credit: Metropolitan Transportation Authority / Patrick Cashin)

TRANSIT

MTA construction costs are too high compared with cities around the world, politicians say

By Vincent Barone   vin.barone@amny.com October 16, 2017

Extraordinarily high construction costs are keeping the MTA from meeting the demands of a growing city, elected officials who rallied for spending reforms charged on Monday.

The politicians from the city and the state — all Democrats — called on the MTA to create an independent commission of experts to study why the agency’s capital projects cost nearly three or four times that of projects in similar cities like London, Paris or Los Angeles.

The focus on costs comes in the wake of rising subway delays, as well as high-profile service failures that continue to plague morning commutes. On Monday morning, signal problems at Midtown stations caused delays and service changes on eight lines, leading to the suspension of B and M trains.

“The MTA has the highest construction costs compared to any other city on the planet. The MTA regularly spends three to six to ten times more money for a capital project compared to anywhere else,” said Manhattan City Council member Helen Rosenthal. “New York City cannot afford to keep spending more and getting less as service delays and disruptions have been growing from bad to worse.”

Between 1999 and 2023, Madrid will have built 71 miles of underground railway at the cost of $3.5 billion. London will have 48 miles of new underground rail at $31 billion. New York expects to have only 13 miles at $19.9 billion. The first three stations along the Second Avenue line cost $4.5 billion to build, which a variety of experts view as the most expensive subway extension on the planet.

Higher costs mean fewer subway expansions and fewer major projects, such as improving wheelchair accessibility in stations and replacing decrepit signals with modern equivalents, the politicians said.

“A lot of the time critique of government spending comes from kind of a right-wing point of view from folks who want to just do away with government altogether. That’s not where we’re coming from,” said David Bragdon, executive director at the advocacy group TransitCenter. “We believe more money ought to be spent on transit and frankly it’s hard — it’s even embarrassing — to be a transit advocate and to be asking for more money for the MTA when you know a portion of that money is going to be wasted.”

While sounding the alarm, officials offered little insight into what they believe to be at the root of the high construction spending at an agency that boasts a $32 billion, five-year capital plan. Several experts believe labor costs, such as overstaffing and work regulations, play a primary role in exorbitant spending. Rosenthal, however, dismissed the idea. She and City Councilman Ydanis Rodriguez pointed to the MTA’s process of selecting contractors for projects as a possible area for reform.

The MTA’s board has grown frustrated with the procurement process, which some on the board have said does not have stiff enough penalties for contractors that do poor work. Rodriguez believes the agency could broaden its pool of companies to choose from.

“Right now there’s like 15 international corporations that are doing construction related to the needs of the MTA. Do you know how many the MTA uses? Two,” Rodriguez said.

In a letter dated Aug. 10, Rosenthal and Rodriguez wrote to MTA Chairman Joe Lhota requesting he form the independent commission to explore cost reforms. They said they have not heard back.

Shams Tarek, an MTA spokesman, said in a statement that the agency is “laser-focused” on reducing construction costs. He added that the agency had already formed such a panel back in 2008 and that the panel’s recommendations have helped reduce spending. Tarek listed a handful of measures, including expanding the use of design-build contracting, that the MTA is implementing to tackle the issue.

“The MTA is constantly studying best practices and taking aggressive steps to build major projects while lowering costs, with approaches such as design-build contracting and aggressively holding contractors accountable for delays,” Tarek said. “New York has some of the highest construction costs across all industries — which is exactly why the MTA’s new senior management team is laser-focused on this issue.”

Bragdon said the agency must move on from its common “excuses” that an expensive city, paired with a complicated web of underground infrastructure and the challenges of an old subway system, inflate costs.

“We know that the excuses Gov. [Andrew] Cuomo’s MTA is making really do not hold up,” Bragdon said, pointing to cheaper subways being built more efficiently in older, similarly expensive cities around the world. “While New York is making those excuses, other places are making progress.”

 

Source: https://www.amny.com/transit/mta-construction-costs-are-too-high-compared-with-cities-around-the-world-politicians-say-1.14500290

[max999]

I'm cynical.  I don't believe anything will change.  I believe there are many groups in NYC that profit handsomely from the over-inflated construction costs.  They have very strong incentives to keep the gravy train going.  The MTA is not politically strong enough to take on all of those groups or it doesn't have the willingness to do so.  Ultimately, it's too risky for the MTA to rock the boat so it's in their best interest not to make any fundamental changes to the way construction is done.  

[Via Garibaldi 8]

1 hour ago, max999 said:

I'm cynical.  I don't believe anything will change.  I believe there are many groups in NYC that profit handsomely from the over-inflated construction costs.  They have very strong incentives to keep the gravy train going.  The MTA is not politically strong enough to take on all of those groups or it doesn't have the willingness to do so.  Ultimately, it's too risky for the MTA to rock the boat so it's in their best interest not to make any fundamental changes to the way construction is done.  

I disagree.  I believe they have the political power to make changes.  As you noted, some of these groups profit handsomely on the backs of taxpayers since the  is a public agency.  I also think it's absurd that they say that they formed a panel in 2008, but provide no specifics in terms of how they plan on reining in spending. The only thing they've been hammering away at is cutting service, both on the bus side and the subway side.  You have numerous services running at or over capacity and riders have to fight their way on and then fight tooth and nail with the  to get the service that they are paying for. 

It's rather hypocritical that Lhota talks about being more transparent, yet the agency goes about cutting costs in a very secretive manner.  I haven't seen anything that indicates that they're getting construction costs under control.  Sure, meeting or even exceeding deadlines helps keep costs down considerably in some cases, but you can't rely on that solely.  We need a better understanding of how costs are being reduced from the beginning, which includes analyzing how they put out of Request for Proposal (RFPs), to the entire process.  It is no secret that in many cases RFP requirements are written in a such a way so as to favor one vendor, and that IMO is a big problem.  It's a form of pay-to-play in my mind.  

[bobtehpanda]

7 minutes ago, Via Garibaldi 8 said:

I disagree.  I believe they have the political power to make changes.

The MTA's main flaw is that no one is directly accountable to voters, so no one actually has the mandate to get things done. The Chairman and everybody else on the board are just political hacks put into their positions by big, powerful people who can throw them under the bus at any time. Mario Cuomo and everybody else since then have done it to their Chairmen and Boards. Notice that, essentially, every chairman since Kalikow has never really strayed away from anything other than toeing the Governor's line.

Idealistically, the MTA Board should consist of the mayor, the county executives, and the borough presidents. But that would make the MTA an actual problem for an elected official then.

[N6 Limited]

The sad thing is that

4 hours ago, Via Garibaldi 8 said:

 

Higher costs mean fewer subway expansions and fewer major projects, such as improving wheelchair accessibility in stations and replacing decrepit signals with modern equivalents, the politicians said.

“A lot of the time critique of government spending comes from kind of a right-wing point of view from folks who want to just do away with government altogether. That’s not where we’re coming from,” said David Bragdon, executive director at the advocacy group TransitCenter. “We believe more money ought to be spent on transit and frankly it’s hard — it’s even embarrassing — to be a transit advocate and to be asking for more money for the MTA when you know a portion of that money is going to be wasted.”

“The MTA is constantly studying best practices and taking aggressive steps to build major projects while lowering costs, with approaches such as design-build contracting and aggressively holding contractors accountable for delays,” Tarek said. “New York has some of the highest construction costs across all industries — which is exactly why the MTA’s new senior management team is laser-focused on this issue.”

“We know that the excuses Gov. [Andrew] Cuomo’s MTA is making really do not hold up,” Bragdon said, pointing to cheaper subways being built more efficiently in older, similarly expensive cities around the world. “While New York is making those excuses, other places are making progress.”

 

Source: https://www.amny.com/transit/mta-construction-costs-are-too-high-compared-with-cities-around-the-world-politicians-say-1.14500290

Pretty much.  I like that a lot of the issues were mentioned in this article.

[RR503]

4 hours ago, bobtehpanda said:

The MTA's main flaw is that no one is directly accountable to voters, so no one actually has the mandate to get things done. The Chairman and everybody else on the board are just political hacks put into their positions by big, powerful people who can throw them under the bus at any time. Mario Cuomo and everybody else since then have done it to their Chairmen and Boards. Notice that, essentially, every chairman since Kalikow has never really strayed away from anything other than toeing the Governor's line.

Idealistically, the MTA Board should consist of the mayor, the county executives, and the borough presidents. But that would make the MTA an actual problem for an elected official then.

Do you think it'd be better if the MTA was directly accountable to NIMBYs? If politicians could run on ridiculous infrastructure projects..and then actually build them? I can't imagine anything worse for the MTA than filling the board with politicians. The whole idea of a public authority is that some functions of government are best separated from voters for the voters own good. 

[Deucey]

3 hours ago, RR503 said:

Do you think it'd be better if the MTA was directly accountable to NIMBYs? If politicians could run on ridiculous infrastructure projects..and then actually build them? I can't imagine anything worse for the MTA than filling the board with politicians. The whole idea of a public authority is that some functions of government are best separated from voters for the voters own good. 

I think it’d be better if the MTA Board were, like most other transit and transportation authorities around the country, made up of bureaucrats that have to think of the region as a whole and not solely careerist employees and political cronies.

So what I’d do is:

Each of the Borough presidents are ex-officio members - like county supervisors are elsewhere. (5 seats)

The other NY counties - or cities/villages etc - in the service area get representation on the board on a rotating basis (4 seats)

The Mayor and Governor appoint four board members, with one each a non-voting member (4 seats)

NYCDOT and NYSDOT each get a non-voting seat.

 CEO is hired by the board - not nominated/appointed by politicians. Chairman is chosen from the ranks of the voting board members, not Albany.

====

Local control, with State supervision. Elected officials are made accountable.

[bobtehpanda]

4 hours ago, RR503 said:

Do you think it'd be better if the MTA was directly accountable to NIMBYs? If politicians could run on ridiculous infrastructure projects..and then actually build them? I can't imagine anything worse for the MTA than filling the board with politicians. The whole idea of a public authority is that some functions of government are best separated from voters for the voters own good. 

A Board is not supposed to do day-to-day management anyways, it's supposed to shore up support and provide general guidance. What use are board members who have no weight to throw around in places where it actually matters?

Having an authority that essentially answers to one politician (NYCBOT to the mayor, MTA to the governor) is not useful, but actually having a diverse set of elected board members is useful since it would be pretty hard to collectively get all of them to be irresponsible - one person acting in their own self interest is by definition acting against all the other members' self interest. At the county, borough, and city level, they're driving the vision of their jurisdictions.

Sound Transit in Seattle works this way and is one of the more successful agencies in the country at boosting ridership and expanding the network.

[Deucey]

^^QFT.

[Via Garibaldi 8]

18 hours ago, bobtehpanda said:

The MTA's main flaw is that no one is directly accountable to voters, so no one actually has the mandate to get things done. The Chairman and everybody else on the board are just political hacks put into their positions by big, powerful people who can throw them under the bus at any time. Mario Cuomo and everybody else since then have done it to their Chairmen and Boards. Notice that, essentially, every chairman since Kalikow has never really strayed away from anything other than toeing the Governor's line.

Idealistically, the MTA Board should consist of the mayor, the county executives, and the borough presidents. But that would make the MTA an actual problem for an elected official then.

Well I'm not even looking at things from that perspective.  When I think of the power they possess, I'm speaking about it just from a sheer money perspective.  The financial incentives for these companies must mean something, and they need to use that to their advantage.  I've heard small business owners speaking at board meetings regularly thanking the  for helping them get off of the ground and the like.  Now this is the public sector, but I think the  should be able to call a "vendors meeting".  You bring all of your vendors in a room and you let them know the deal.  I actually had to attend a meeting like that with a client up in Westchester.  They had roughly 100 of us in a room, and they basically said indirectly I may add that they were doing some "restructuring" and were studying their costs closely and would be making adjustments as needed.  Well you don't think I got what they were trying to say?? I had to look at my costs and adjust them for my department to accommodate their request or risk losing their business entirely.  I don't pretend to know all of the ins and outs since I work in the private sector and am well aware that there are differences, but I have to think they have more power over their vendors. I mean sure it's a free market, but as a vendor, you're always lured by the idea of a nice fat contract to strengthen your bottom line.

[bobtehpanda]

14 hours ago, Via Garibaldi 8 said:

Well I'm not even looking at things from that perspective.  When I think of the power they possess, I'm speaking about it just from a sheer money perspective.  The financial incentives for these companies must mean something, and they need to use that to their advantage.  I've heard small business owners speaking at board meetings regularly thanking the  for helping them get off of the ground and the like.  Now this is the public sector, but I think the  should be able to call a "vendors meeting".  You bring all of your vendors in a room and you let them know the deal.  I actually had to attend a meeting like that with a client up in Westchester.  They had roughly 100 of us in a room, and they basically said indirectly I may add that they were doing some "restructuring" and were studying their costs closely and would be making adjustments as needed.  Well you don't think I got what they were trying to say?? I had to look at my costs and adjust them for my department to accommodate their request or risk losing their business entirely.  I don't pretend to know all of the ins and outs since I work in the private sector and am well aware that there are differences, but I have to think they have more power over their vendors. I mean sure it's a free market, but as a vendor, you're always lured by the idea of a nice fat contract to strengthen your bottom line.

IIRC, the MTA has convoluted bidding rules to prevent against Tammany-style abuse, but the system is so complex that only a few companies ever really qualify for crap. So in this case the construction industry in that sector (companies and unions and everybody else) is just one giant cartel, where as long as the gravy train keeps running no one is upset. The MTA can't just hire its own workers and do the damn work. At least with other industries you have options, sometimes options that aren't even local, to keep your costs down.

On top of that, unions still have powerful political representation, so they can't just be ignored either. I'm all for unions representing workers and fighting for their rights, but just like there are bad companies and bad corporate practices, there are bad unions and bad union rules and such.

[BreeddekalbL]

On 10/17/2017 at 9:03 PM, Deucey said:

I think it’d be better if the MTA Board were, like most other transit and transportation authorities around the country, made up of bureaucrats that have to think of the region as a whole and not solely careerist employees and political cronies.

So what I’d do is:

Each of the Borough presidents are ex-officio members - like county supervisors are elsewhere. (5 seats)

The other NY counties - or cities/villages etc - in the service area get representation on the board on a rotating basis (4 seats)

The Mayor and Governor appoint four board members, with one each a non-voting member (4 seats)

NYCDOT and NYSDOT each get a non-voting seat.

 CEO is hired by the board - not nominated/appointed by politicians. Chairman is chosen from the ranks of the voting board members, not Albany.

====

Local control, with State supervision. Elected officials are made accountable.

I take it this is similar to los Angeles?

[Deucey]

Yeah. Same with the MTC in SF Bay, and I think with Sound Transit in Seattle and TriMet in Portland.

We tend to do things better on the left coast.

And we also tend to not trust the state running local stuff directly. West Coast liberal libertarianism.