Friday, March 8, 2013

East Side Access Project: $4.4B Over Budget, Ten Years Behind Schedule

State Comptroller Thomas DiNapoli blasted the Metropolitan Transportation Authority for cost overruns and delays on its massive project to connect the Long Island Rail Road to Grand Central Terminal. East Side Access is now expected to cost nearly $8.25 billion and the opening date has been pushed back to August 2019, a dozen years after its groundbreaking. It has been known for years that the East Side Access project would not meet its initial budget and timetable, but the comptroller's office said a full accounting had not been done, nor had the overruns been broken down into components. MTA watchdogs said the most recent findings were beating an old drum.

"I think it's pretty well known that the project is way over budget and way behind its original schedule," said William Henderson, executive director of the Citizens Advisory Committee to the MTA.

"The main question is, will it get worse? Everyone's wondering if another shoe will drop and that opening date will get pushed further into the future."

Mr. DiNapoli's report said East Side Access is now expected to cost nearly $8.25 billion and the opening date has been pushed back to August 2019, a dozen years after its groundbreaking. It is 10 years late and $4.4 billion over budget, figures Mr. DiNapoli labeled "the most egregious example" of the transit agency's tendency to underestimate the cost of its projects.

Mr. DiNapoli also noted that the transit agency had not been including the cost of new rail cars in the project. Doing so boosts the total price tag to $8.76 billion.

With its federal funding capped at $2.7 billion and New York State contributing $450 million, the MTA is being soaked with the cost overruns. The authority's slice has grown to $5.6 billion from less than $2.2 billion, according to the report.
Initially, it appeared that federal funding would pay for up to 70% of the cost, but that figure will ultimately be about 30%. It goes to the whole issue of federal money not really being free.

The comptroller said that city taxpayers bear the brunt of the rising costs for East Side Access, which was designed to shave up to 40 minutes off commute times for 160,000 Long Island riders each day. The primary beneficiaries will be Long Island commuters. The cash-strapped MTA also stands accused of fare hikes that are on track to rise at double the rate of inflation through 2019.

Underestimating the complexity of a massive project is not unusual, Mr. Henderson said. "All kinds of things can go wrong, and in this case, many of them did."  Transit advocates privately acknowledge that costs of projects are estimated as 'best-case scenarios' because figures that are more realistic would dissuade politicians from green-lighting important projects.

A revolving door of MTA bosses also makes it hard to pinpoint who is to blame. The MTA has not had a real chairperson in five years. Joseph Lhota resigned as chief executive of the MTA in December. His predecessor, Jay Walder, left a year earlier to run a transit agency in Asia. You cannot hold anyone accountable, and that is a problem.

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