Cost of East Side Access project jumps again, now over $11B

Posted On Thu, April 26, 2018 By

Posted On Thu, April 26, 2018 By In Policy, Transportation

Workers at East Side Access project in 2016 via MTA’s Flickr

The Metropolitan Transportation Authority approved on Wednesday an amendment to its capital plan that allows for more than $400 million to be invested in the East Side Access, a project that began more than a decade ago. In addition to exceptional construction delays, the project’s price tag has jumped dramatically, from early estimates of roughly $2.2 billion to now over $11 billion (h/t NY Times). As a way to reduce crowds at Penn Station, East Side Access will connect the Long Island Rail Road to Grand Central Terminal.

In a joint letter to the MTA on Wednesday, Mayor Bill de Blasio and City Council Speaker Corey Johnson said more measures of accountability and transparency are needed. With the city now funding half of the authority’s $836 million emergency action plan, the officials said the MTA needs to prove it can invest the funds effectively. The officials cite the East Side Access project as one of the reasons New Yorkers question the MTA’s capability of completing projects, both on time and on budget.

“City taxpayers deserve to know they are getting a good return on their investment,” they wrote. “The public is skeptical when it comes to work performed by the MTA, especially given recent public reports about prolonged delays and billions of dollars in cost overruns on MTA projects. ”

To explain the project’s ballooning costs, the authority pointed to contract changes and insurance expenses. As the Times learned, the MTA has nearly $2.2 billion in “soft costs” alone, which includes engineering, management and real estate costs. “I can’t tell you that there isn’t a lot of disappointment coming out of this review in terms of the budget impact,” Janno Lieber, the MTA’s chief development officer, told the board.

The new train station, which will sit about 15 stories below Grand Central Terminal, is now scheduled to be completed by the end of 2022 (early plans had estimated a completion sometime in 2009), and will serve about 200,000 commuters.

Transit projects continue to cost more in NYC than anywhere else in the world, as 6sqft previously learned. Labor unions have secured deals mandating sites be over-staffed, construction companies have increased projected costs when dealing with the MTA, and consulting firms have convinced the authority to spend an excessive amount on design and management.

According to a report released last year by the Times, the cost of the East Side Access project is seven times the average of anywhere else. On this project, an accountant discovered that 900 workers were being paid about $1,000 per day to do only 700 jobs available. Michael Horodniceau, the former head of construction at the MTA, told the Times: “Nobody knew what those people were doing, if they were doing anything. All we knew is they were each being paid about $1,000 every day.”

[Via NY Times]

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