New York City is the most expensive place in the world to build transit, but it doesn’t have to be that way.
RPA’s newest report, “Building Rail Transit Projects for Less,” finds that the cost of building new subways and commuter rail is more than twice as high than in cities like London, Paris and Los Angeles. We compared the project costs as well as planning and delivery of recent local projects including Second Avenue Subway, East Side Access, and the #7 Line Extension to projects in these cities and others around the globe.
We found that the MTA’s high costs aren’t just a product of pricey real estate or old, complex subterranean environments (London and Paris have been around a lot longer, and are just as expensive). And you can’t point your finger at any one cause.
Our pricey projects stem from entrenched practices that flow through every phase of a project, from decisions by political leaders that lead to a cascading series of cost overruns and delays to byzantine MTA contracting procedures to overstaffed projects stemming from outdated work rules.
And the public is fed up.
So what can be done about it?
RPA’s report outlines a series of reforms that could reduce MTA costs on megaprojects by at least 25-33%, saving billions of dollars and rebuilding public trust so that we can keep building the transit that our region needs to serve residents more equitably and continue to thrive.
Here are just a few of the recommendations that RPA is calling on the MTA, state and city political leaders and labor to adopt:
- Create realistic budgets and project timelines. Political pressure often leads the MTA to lowball initial project cost and timeline estimates. This leads to costly project interruptions and extensions and a loss of public trust.
- Engage the public early and often. Right now the public is engaged in a narrow way. People are often asked to react to plans already far along in development. This leads to unnecessary fights and litigation that slow projects down, adding time and money. The MTA’s outreach in advance of the L train shutdown may be a model to incorporate in future projects.
- Put one team of professionals in charge of each new project from start to end. A temporary special purpose entity should own responsibility to deliver the project on time and budget. This has worked well in London and other peer cities, in contrast with the MTA’s internal office of Capital Construction, which has little authority over other MTA agencies.
- Rationalize environmental review. Right now the national average for reviews is 84 months, compared to international peer cities with strong environmental track records that manage to complete similar processes in 18-24 months. There is much the State and MTA can do to streamline the process for large projects without compromising the intent of protecting the environment.
- Use design-build for all new rail lines and extensions. The MTA should replace its traditional design-bid-build procurement for megaprojects with the increasingly accepted practice of design-build, in which a single contract is made to design and build the project. This model is credited with saving significant costs in the construction of the Tappan Zee Bridge.
- Rethink labor practices and work rules. Other world cities including London and Madrid have demonstrated how employment and wages can be maintained while delivering projects faster and at lower costs. Two examples of reforms include realigning overtime pay to start once the 40-hour workweek is completed and reducing the number of staff required to operate tunnel boring machines (TBM’s). These could result in significant direct cost savings and suggest that other work rule reforms could lead to additional savings.