New York Finds Massive Savings in Transit Construction

MTA Chairman Tom Prendergast announced that an internal review of MTA Capital Construction reveals that there are large wastes in the capital budget that could be eliminated with relatively simple step. City comptroller Scott Stringer noted that Second Avenue Subway’s first phase, a two-mile stub, costs nearly $5 billion, whereas comparable lines in Paris, London, Tokyo, and other rich, global cities are a fraction of that amount. “Few lines cost more than half a billion dollars per mile,” his office added.

Prendergast’s office directed questions to MTA Capital Construction President Michael Horodniceanu. Horodniceanu outlined a list of items raising New York’s subway construction costs, including labor rules, legal issues, lack of training in new technologies, and insufficient public oversight of contractors. He added that there is little hope of seeing large reductions in the costs of ongoing projects, which are too far advanced, with most of the money already spent, but future subway construction could be done for much cheaper. He did not give a concrete estimate, but a senior official at MTA Capital Construction believed that with the requisite reforms, future subway lines would cost about half a billion dollars per mile in Manhattan and a quarter billion dollars in the Outer Borough.

When asked about the possibility of building Amtrak’s Gateway Project at lower cost, the source qualified those estimates, explaining that Gateway can probably be done for $3 billion, closer to a billion dollars per mile, as much of the project involves underwater tunneling. Officials from Amtrak did not comment on the record by the time this story went to press; however, a senior Amtrak manager speaking on condition of anonymity said, “we don’t really believe this is possible – there are lots of low estimates, and those always lead to budget overruns,” and said that the cost figures from the rest of the world are “irrelevant to America and American labor costs.”

Labor reactions to the announcement were mixed. James Ryan, the president of the Sandhogs Local 147 union, expressed skepticism that costs could be brought down without cutting wages or unionized jobs, and warned of a “race to the bottom” and a “low-wage Wal-Mart economy.” However, he added that he would accept changes as long as there was a guarantee of no job losses, wage cuts, or work rule reforms that would reduce union autonomy. TWU Local 100 President John Samuelsen, whose union represents subway workers rather than construction workers, proposed that the city and the state use the reduced costs to expand subway construction, specifically mentioning future phases of Second Avenue Subway. Currently only Phase 1 is funded, serving the Upper East Side.

Reactions within the state legislature were more positive. The greatest supporter is Assembly Speaker Sheldon Silver (D-Manhattan), whose Lower East Side district is slated to be served by the fourth and last phase of Second Avenue Subway. Silver noted that he was in support of the project even when it was just Phase 1, and said that he would work with the State Senate to pass all the legal reforms requested by Prendergast and Horodniceanu. In the State Senate, co-temporary presidents Dean Skelos (R-Long Island) and Jeffrey Klein (Ind. D-Bronx) had a cooler response. They both praised the revelations and said that they would consider passing the reforms requested, but did not mention any timeline for doing so. Several state legislators, speaking on condition of anonymity, expressed sentiments that the MTA is keeping two sets of books, and if the MTA just admitted to being able to save more money, then its budget requests for operations are also likely suspect. Skelos himself was cool to the proposals for a legislative audit of the MTA, but added, “I understand why people are upset and want to take a closer look.”

In contrast, within City Hall, reactions were overwhelmingly positive. The office of Mayor Bill de Blasio praised Horodniceanu and sent a press release calling MTA Capital Construction’s announcement “a courageous admitting of past mistakes, and an ambitious look forward.” De Blasio himself added that “Now is the time to see where we can build new lines that we thought were unaffordable,” and expressed confidence that all necessary changes can be achieved without running afoul of labor demands.

It is unclear whether the city or the MTA will propose any subway extensions, other than the completion of Second Avenue Subway. In 2008, the MTA’s then-chairman, Elliot Sander, proposed a 22-mile circumferential line running on lightly-used freight rights-of-way, connecting the Bronx, Queens, and Brooklyn without going through Manhattan. Regional Plan Association President Robert Yaro noted that his organization initially proposed this line in 1996 and proposed that the MTA build this line as well as express links to all three airports. He added that this line, which he calls Triboro, requires only about a mile of tunnel and is therefore much cheaper than fully underground lines. “The MTA has found a way to make everything cheaper, both subways and construction on existing infrastructure, so Triboro will be especially cheap now,” he said.

The community groups who could be reached by the article’s deadline were split. Transit activists within Harlem proposed that Second Avenue Subway be modified to add a fifth phase, going crosstown under 125th Street. The members of Harlem’s three community boards agreed that it would be useful, but most of them expressed concerns that it would lead to gentrification and displacement of existing residents, and said they would support the line if the city made an effort to build or preserve affordable housing. MTA planners who spoke on condition of anonymity proposed to extend the 2 and 5 down Nostrand Avenue in Brooklyn and the 4 down Utica Avenue, as per proposals from the 1970s. The response of the community boards in southeastern Brooklyn was more negative, saying that it would change the character of the neighborhoods relatively. One community board member warned that this would lead to “Manhattanization of our neighborhood.”

No member of the New Jersey state government responded to repeated requests for quotes by the article’s deadline.

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15 Responses to New York Finds Massive Savings in Transit Construction

  1. Stephen says:

    I tweeted this once, but I still find it pretty amusing (/sad). Here are the last names of Local 147’s leadership: Fitzsimmons, Ryan, Sylvester, Fitzsimmons, Mallon, Cannon, Hickey, O’Shea.

    The 1860s called – they want their Irish-only craft union back!

  2. Eric says:

    Interesting to have an April Fools article that is less satire than “what if?”.

    You don’t go into detail about the question everyone’s wondering – why exactly are costs so much higher in NY than elsewhere – but the impression given is that you mostly blame it on unreasonable labor unions. My first impression is to disagree. How many workers are actually working on a subway project at a time, and how much do their wages add up to even if inflated by say 300%?

    • Alon Levy says:

      To be a little less tongue-in-cheek, I think that if the MTA finds an actionable plan to reduce costs, then (some) unions will be the major source of political opposition, since they’re more organized than the contractors and the consultants. Jokes about democracy and lobbying aside, the democratic system is very good at giving politicians incentives to be The One Who Saved Taxpayer Money, which means that political actors who are most active behind the scenes, such as industry lobbyists, lose power in such a situation. Organized labor, in contrast, has the ability to argue openly because of its influential role within the working class.

      The other group of people I portray as not fully in support, the NIMBYs, I doubt would be able to mount a challenge. First, I doubt that any solution to the cost problem will involve active disempowerment of community leaders; in contrast, it would disempower unions, to the extent that it reduces staffing levels – e.g. Stephen Smith reports that Horodniceanu admitted once that labor rules require New York to use 24 people for a certain task involving TBMs that Madrid does with 9. Second, I doubt that any reform would involve actual changes to the environmental impact reporting process, triggering the ire of the environmental groups that now oppose CEQA reform in California. NIMBYs would lose out only from suddenly having to argue against subway extensions that under today’s cost structure are unaffordable.

      • Adirondacker12800 says:

        About the only place East Side Access is two tunnels is under the river. The rest of it spreads out into three, four or eight tunnels. someone has to do a cost per track mile/kilometer analysis.

        It’s not the sandhogs making costs so high. At 400,000 a year with fringe benefits and overhead ( someone has to make sure the timecards are correctly accounted for etc.) 24 sandhogs for a year is 9,6 million. For ten years, 96 million. There’s labor to be saved but it’s not all union members driving up costs. Throw in the electricians, plumbers, HVAC guys, concrete and steel deliveries ya might get up to an extra billion for blue collar workers on a ten year project….. how much extra did it cost to defend the entrances that are going to be in the sidewalk because that would mean pedestrians on the sidewalk?
        …Gateway… it’s gonna cost a billion dollars to condemn the block between 7th and 8th, 31st and 30th. Before they demolish anything or turn a shovel of dirt. Saving a billion dollars makes Macy’s basement look a lot better. And Macy’s basement could have connected to Grand Central someday. And is three to four blocks closer to where most people want to go. And would have been finished a decade earlier than Gateway.

        • It may cost a billion to condemn that block, but the big difference from Macy’s basement is that the land can then be re-sold, perhaps at a higher value given that it’s not often that a developer can buy a full block already assembled.
          That’s assuming that the additional platforms are actually required.

        • al says:

          No, ESA is one big 4 track double deck tube under the East River.

          • Adirondacker12800 says:

            the top two tracks are for the subway. the lower tracks are for the LIRR.

    • Stephen says:

      Labor is the largest component of any tunneling project, so the costs could get quite high. And just to be clear, I don’t think anyone is alleging that they’re overpaid – rather, it’s that their work rules (especially those of the Sandhogs) require overstaffing and I’ve seen some evidence (well, what passes for evidence re: subway tunneling costs – more like vague hints) that they’re inexperienced in modern tunneling methods (NATM).

      But general design (as opposed to specific tunneling designs…NATM is sort of an on-the-fly method of tunneling, where you kind of design the project as you go) is definitely an element on some projects as well – East Side Access especially, 7 train to some extent (in that it never should’ve been built in the first place), and ARC if it would have been built.

      • Adirondacker12800 says:

        There’s gonna be 50,000 people living and working around 11th and 34th someday.

        • Stephen says:

          And when that happens, they’ll be totally deserving of a subway. Until then – it’s gonna be a while until there’s actually demand for office space there, which is what half of the zoned capacity is for, or for the city to wise up and rezone for what there is already demand for (housing) and will be demand for whether there’s a subway or not – there are people already living and working on the east side who have been waiting generations for a subway.

        • Adirondacker12800 says:

          And when the city tries to build one hordes of lawyers come out from under the woodwork trying to stop them. For generations.

  3. Ian Mitchell says:

    ” The members of Harlem’s three community boards agreed that it would be useful, but most of them expressed concerns that it would lead to gentrification and displacement of existing residents, and said they would support the line if the city made an effort to build or preserve affordable housing”
    “One community board member warned that this would lead to “Manhattanization of our neighborhood.””

    *FACEPALM*

    I can’t stand this kind of stuff. It’s a public utility. People in slums without electricity worrying about whether they’ll be able to afford the rent increase once there’s electricity- so they either want no electricity, or to not have to pay market rent once there is electricity.

    Everyone is better off once there’s electricity in one area- even those who get displaced. Making an area of MANHATTAN less convenient than much of New Jersey in terms of job access to maintain low rent is absolutely wasteful.

    As far as brooklyn- Brooklyn has skyscrapers. It has more people than manhattan plus two staten islands. It’s going to manhattanize. It should. Keep pushing. Improve LIRR, build triboro, built an outer loop from Suffern-White Plains-Hicksville-Jamaica-Atlantic Terminal. There’s no reason to make manhattan below 125th the only place with fantastic transportation. There’s 22 million people in the metro area. There’s the demand. I don’t know what it takes, but it really ought to happen. A rail system less extensive than it was in the 1930’s is just insane.

  4. John Kopp says:

    Mr. Levy, You should be more careful about what you post on April 1. Last year your post prompted a certain naive Silicone Valley entrepreneur to propose a crazy loopy transportation system for San Francisco to Los Angeles. But you certainly do bring items up for discussion.

  5. Nathanael says:

    April fools.
    Not enough satire for my taste.

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