Saturday, July 13

Congress Plans to Investigate High Costs of New York City Transit Construction

Panorama on Manhattan, New York City

When you go to New York City, you can expect to spend a lot of money. Restaurant prices are a lot more expensive than other places in the country, parking is going to cost you an arm and a leg, and finding a place to stay? Wow, you better be prepared to spend a couple hundred dollars. While the city itself is so expensive, it may or may not come as a shock that the subway system ranks pretty low in terms of cost efficiency. Congress wants to know why.

According to Time Out, the MTA’s 7 train cost about $1.4 billion to complete per kilometer. This is compared to London’s newer soon-to-be train extension which will only take about $1 billion per kilometer to complete. To see why the NYC cost is so high, Congress said in their latest omnibus spending bill that they will be mandating a study to figure this out.

The New York Times says auditors plan to look at contracting policies, project routing, station design, and other elements that could be driving the cost. They plan on comparing their findings with other cities in the United States and cities outside of the country.

All of this comes three months after the New York Times revealed how state and city public officials did nothing as a group of politically-connected labor unions, consulting firms, and construction companies were driving up transit construction costs stop. Recently, the Second Avenue Subway on the Upper East Side cost $2.5 billion per mile of track. In any other location in the world, a mile of Subway track usually will cost around $500 million or less.

While some people are excited about this study, a spokesperson for the MTA says they were already working to reduce construction costs.

“The M.T.A. under new leadership is aggressively tackling these issues through working groups dedicated to procurement reform and containing construction costs,” spokesman Jon Weinstein said. “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.”

A member of the MTA board believes that while the situation may be rigged, he doesn’t think it’s corrupt. He believes people are doing business with people they know, which they like to do. However, that is only giving few companies work and allowing them to charge whatever they want.

The United States has the second largest construction market in the world, with a market share of 10%. The goal is to have the study completed by the end of the year, along with recommendations on how to cut the costs.

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