Construction projects for New York City subways are the most expensive in the world thanks to overall mismanagement by transit officials, favoritism toward powerful special interests like labor unions and building firms, inefficient staffing, and a bloated bureaucracy, according to a report published on Friday.
A lengthy expose by The New York Times reveals why New Yorkers are forced to foot the highest costs for the maintenance and expansion of their transit system than those in other world class cities.
The report found that the agency in charge of the subways, the Metropolitan Transportation Authority, wastes massive sums of money by employing too many people to do work that can be performed in the same amount of time by half the number of personnel.
In New York, ‘underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,’ according to an internal report by Arup, a consulting firm that did work for the MTA as well as other agencies worldwide.
This January 2012 file photo shows the view of construction of a newly built concourse underneath the lower level of Grand Central Terminal. The 3.5-mile East Side Access project is estimated to cost $12billion – or $3.5billion per mile
When a tunnelling contractor from California observed a construction site in New York, he noticed approximately 25 people used to operate a tunnel boring machine.
‘That’s three times what I’m used to,’ the consultant, Mike Roach, told the Times.
In 2010, the MTA was working on digging a 3.5-mile tunnel connecting Grand Central Terminal to the Long Island Rail Road.
An accountant noticed that the project needed 700 jobs to be done, yet documents shows that 900 workers were being paid at a rate of $1,000 per day.
That means large sums of money were wasted on 200 workers who were not needed.
Not only do labor agreements negotiated with unions and construction companies call for too many workers deployed on each project, but they also include inflated pay rates.
A union made up of tunnel-diggers receives a whopping $111 per hour in salary and benefits.
Workers are viewed underneath Manhattan at the Second Avenue Subway project site on January 10, 2014. The Second Avenue subway took 10 years to build and it ended up costing taxpayers $2.5billion per mile
Those who work overtime or on Sundays receive twice that amount – over $400 per hour, according to the Time.
The construction workers deny that they are overpaid. They insist the wages they are paid are due to extraordinary safety measures that need to be in place.
‘Construction workers deserve every penny they make, and more,’ said Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York.
‘We live in New York. It’s very expensive to live here. We take great pride in the work that we do. And the work rules are there to make sure we stay alive.’
The Times obtained records showing that unions given MTA contracts are able to receive such generous work pay and benefits because they have donated over $1million to Governor Andrew Cuomo.
Independent transit consultants and experts say labor is the primary factor driving up construction costs in New York.
The Times obtained records showing that unions given MTA contracts are able to receive such generous work pay and benefits because they have donated over $1million to Governor Andrew Cuomo (above)
The estimated cost of the Long Island Rail Road project that began in 2010 has reached $12billion – which is almost $3.5billion for each new mile of track.
The average cost of underground construction for subway systems worldwide is $500,000 per new mile.
The MTA recently completed the Second Avenue subway in Manhattan. This cost $2.5billion per mile.
In 2015, it extended the No. 7 line to the Hudson Yards. That project cost $1.5billion per mile.
Unions and construction contractors say the inflated costs are necessary to speed up the completion of projects and keep workers safe.
Yet the statistics obtained by the Times found that compared to other cities, subway construction projects in New York take longer to complete.
The Times also found that safety accidents were not less frequent in New York. On the contrary, safety incidents in other mass transit cities like London are less frequent than in New York.
The end result is that the MTA wastes billions of dollars on inflated labor costs instead of using that money for upkeep and maintenance as well as expansion in order to keep up with greater ridership and demand.
‘It’s sad, really,’ said Lok Home, the owner of Robbins Company, the maker of equipment used to dig tunnels for subway projects.
‘Because if they controlled the costs, they could do twice as many expansion projects and still have more money for maintenance.’
The Times also notes that the bidding process for MTA projects is limited to just two or three construction firms – whereas other cities usually solicit bids from up to seven or eight different companies.
With so few competitors, the MTA is forced to pay inflated costs to companies with an interest in driving up the price of their work.