This is why they overtax us: East side access project 10 years late and $4.4 billion over budget


The Metropolitan Transportation Authority’s (MTA’s) East Side Access project, which will bring Long Island Rail Road (LIRR) service to Grand Central Terminal for the first time, is expected to cost nearly $9 billion when finished in 2019, more than twice the MTA’s initial cost estimate and a decade later than expected, according to a report released Wednesday by New York State Comptroller Thomas P. DiNapoli.

“Time and again, the MTA has come up short on the goal to deliver the East Side Access project on schedule and within budget,” DiNapoli said. “While this project is an important addition to the regional mass transit system serving New York City and Long Island, taxpayers will have to bear the brunt of these unanticipated costs. There must be lessons learned at the MTA from this experience as they move forward with their capital program.”

East Side Access is the nation’s largest public transportation project and the first expansion of the LIRR in more than 100 years. Initially expected to cost $4.3 billion and to begin service in 2009, East Side Access is now projected to cost $8.76 billion when completed in August 2019.

The project is expected to serve 160,000 riders daily, reducing commutes by up to 40 minutes. New tunnels will connect the LIRR main line in Queens to the lower level of the existing 63rd Street Tunnel and then to a new LIRR terminal being constructed below Grand Central Terminal. While major tunneling has been completed, the entire project is less than half-finished.

DiNapoli also reported:

· The MTA’s current cost estimate for East Side Access is $8.25 billion, but that figure grows to $8.76 billion when the cost of additional passenger railcars needed to meet service demand is factored in.

· The MTA has acknowledged that its initial cost estimates and schedules (which were released in 1999) were based on conceptual plans with virtually no engineering work behind them.

· By the time design work had advanced in 2006, the estimated cost had grown to $6.3 billion and the completion date had been pushed back four years to December 2013.

· Since 2006, the cost has grown by $2.4 billion, or 38 percent, and the completion date has been pushed back another six years. A range of factors, including overly aggressive schedules, the number of large concurrent infrastructure projects, a contractor that performed poor quality work and unforeseen construction challenges increased cost and contributed to delays.

· The MTA estimates that there is an 80 percent probability that the actual cost of East Side Access may be at or below its current estimate, and that service could begin up to one year earlier than currently forecast. Conversely, there is a 20 percent probability of additional costs or delays.

· The cost of building the new LIRR terminal below Grand Central Terminal accounts for more than one-quarter of the cost overrun, having grown from the MTA’s initial estimate of $709 million to $1.9 billion, an increase of 170 percent.

· The cost of the Queens segment, which mostly involves tunneling, has doubled, from $695 million to $1.4 billion.

· The cost of contracts for track, signals, and power and communication systems has nearly tripled, growing from $331 million to $901 million.

· The MTA’s share of the cost of East Side Access has grown from less than $2.2 billion to $5.6 billion, an increase of more than 150 percent. The federal government’s contribution has been capped at $2.7 billion. New York State is contributing $450 million.

· Debt service on bonds issued by the MTA to fund the cost of East Side Access is estimated to exceed $300 million in 2019 when the project enters service. This represents nearly 11 percent of the debt service for the MTA’s entire capital program in 2019. Debt service is reflected in the operating budget and is funded with fares, tolls and tax revenues.

· A rezoning of the area around Grand Central Terminal to permit higher density office buildings proposed by Mayor Bloomberg, in combination with the completion of East Side Access in 2019, is expected to increase overcrowding on subway platforms and surrounding passageways.

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