Penn Station the past few weeks has become the focal point for New York’s transportation infrastructure woes.
Alarmingly, it's no outlier.
Malfunctioning switches, dangling wires and misaligned rail parts have created havoc around the Midtown Manhattan station, exasperating Amtrak, subway and commuter rail passengers.
The crisis prompted quasi-public federal operator Amtrak to accelerate its track-and-switch overhaul for Penn after its top executives consulted Thursday with officials from the Metropolitan Transportation Authority, its Long Island Rail Road unit, and New Jersey Transit.
To accelerate the work, Amtrak, which owns Penn Station, intends to close several tracks on weekdays during the summer, further frustrating commuters.
“We have to step up our game there,” said Amtrak chief executive Wick Moorman.
New Jersey’s General Assembly intends to hold hearings on the derailments.
Around the region, much of the equipment is more than a century old. Megaprojects are frequently late and over budget. Regional agencies and municipalities bicker. Balancing new projects with basic, state-of-good-repair maintenance strains operational and capital budgets.
Meanwhile, uncertainty over transportation funding from Washington hovers.
During think tank Regional Plan Association’s annual assembly at the Grand Hyatt hotel on April 21, speaker after speaker painted an ugly picture.
Former Vice President Joe Biden called the nationwide infrastructure funding crisis a national disgrace and said the Hudson River tunnels connecting New York and New Jersey are hanging by a thread.
“The warranty expired 105 years ago on those tunnels,” said John Porcari, interim executive director of the Gateway Development Corp., which is running point on the tunnel project, federal funding for which is up in the air.
RPA board chairman Scott Rechler, chief executive of RXR Realty and former vice chairman at the Port Authority of New York and New Jersey, called for major overhaul at several transit organizations, including his former one.
“We have to throw away the 20th century playbook,” said Rechler. “Others are progressing at warp speed into the future.”
Rechler suggested far-reaching changes for his former agency such as siphoning off Port Authority Trans-Hudson commuter trains to NJTransit -- the authority could provide NJTransit an annual subsidy -- downsizing the Port Authority police force and even taking the World Trade Center public.
“As the shares increase in value, the Port Authority could strategically sell its shares and re-invest the proceeds back into the region’s transportation system,” he said.
Controlling spiraling capital construction costs in a constant worry.
RPA senior fellow Julia Vitullo-Martin said other cities, including Los Angeles and Denver – both traditionally hostile to mass transit -- are outperforming New York.
“Our peers are building cheaper and faster,” she said.
New York’s Second Avenue subway line extension, 100 years in the making, is Exhibit A. Three new stations and one retrofitted, adding only two miles to the system, cost an estimated $5.5 billion. Overtime related to finishing the project by last Dec. 31 could push the final bill much higher.
“How is it possible that the construction of one mile of the Second Avenue subway costs four times as much as it costs to construct in Tokyo or Paris?,” said Rechler. “We’re not talking about Shanghai or Mumbai where labor is close to free and regulations are far looser, but expensive, first world cities.”
By contrast, the Purple Line subway extension under construction in Los Angeles is to cost $3.2 billion to add eight miles and four stations, new and retrofitted. Tokyo’s six-mile, $3.6 billion Fukutoshin Line featured eight stations. London’s four mile, three-stop Northern Line cost $1.1 billion.
“This is not sustainable over the long term. We have a finite amount of dollars,” said Thomas Prendergast, executive vice president of engineering firm STV Inc. and former chief executive of New York’s Metropolitan Transportation Authority.
“If we have to fund expansion at the expense of maintaining state of good repair [or vice-versa], we will have failed.”
Prendergast oversaw the century-old MTA from 2013 to January as it managed several big projects simultaneously. The MTA is one of the largest municipal issuers with roughly $36.5 billion of debt.
Capital construction projects involve several variables, said Jonathan Peters, a finance professor at the College of Staten Island.
“First, one has to think about our estimates for projects, where in many cases the actual estimated price and the final project costs are vastly different.
“Second, one might want to consider if the cost of projects has just risen and then we have to discuss how much capital we as a society can own and maintain.
“Third -- one needs to think about who should pay for these capital investments. Should the system user pay? Should society in general pay via general taxes? Should the local landowners pay as it impacts their property values?”
Port Authority does not prioritize projects efficiently, said Howard Cure, director of municipal bond management for Evercore Wealth Management.
“There’s always a tradeoff between New York and New Jersey. The politics with Port Authority began to be exposed with Bridgegate, and there doesn’t seem to be a willingness of the part of the governors to fix the problem.”
Port Authority priced $695 million of tax-exempt consolidated bonds on Wednesday.
New York is also very expensive, said Cure.
“With older cities it’s very disruptive to build things. A lot of the infrastructure is underground. In newer cities, rail systems are above ground and they’re not digging, obviously.”
Other factors at play, according to Cure, are active community boards that can slow down or even stop projects and the lack of design-build procurement authority, which New York State has yet to grant and which Mayor Bill de Blasio and city transportation Commissioner Polly Trottenberg favor.
“She would love to have that authority,” Cure said of Trottenberg, a former undersecretary at the U.S. Department of Transportation who also sits on the MTA board.
Gov. Andrew Cuomo on Thursday held a grand opening of the first lane of the new Kosciuszko Bridge, which carries Interstate 278 along the Brooklyn-Queens Expressway. Cuomo said the design-build model accelerated construction by four years. By contrast, a city-financed project nearby on the BQE is much more costly and time-consuming, de Blasio told reporters Wednesday.
According to Cure, public-private partnerships are options for projects with a steady revenue stream.
“Opposition you’ll get from labor unions, construction unions about getting underbid or losing wages,” said Cure. “Also, bureaucrats and engineers see it as a threat to jobs.”
Denise Richardson, executive director of the General Contractors Association of New York, called for better collaboration between contracting representatives and the MTA early in the process.
“There is not enough interaction at the beginning,” she said.
Work rules can drive up costs as well.
According to a report by E.J. McMahon and Kent Gardner of the Empire Center for Public Policy, the state’s prevailing-wage law, which requires contractors on public projects to pay their workers what union collective bargaining agreements require, escalates total construction costs by 13% to 25% statewide, depending on the region.
Under-the-radar “idiosyncratic union disputes” consume large amounts of time and millions of dollars, said infrastructure expert Nicole Gelinas.
“Whereas you might have 10 people working on tunnel boring elsewhere, you might have 25 in New York,” said Gelinas, a senior fellow with the Manhattan Institute for Policy Research. “Not only are you paying much more, but space is cramped so you have more people doing less work.”
Merely reclassifying a job can drive up costs, said Gelinas.
For example, she said, investigators four years ago ruled that traffic flaggers at a lower Manhattan worksite were construction laborers, not traffic-control agents. The federal stick also included the threat of civil-rights action, given that some of the employees were females and minorities.
Amtrak’s assertion of territorial rights, said Gelinas, added millions to the cost of East Side Access, an MTA project designed to bring Long Island Rail Road trains into Grand Central Terminal. “Amtrak has no incentive to cooperate with the MTA.”
The most intractable labor problem on that project, according to Gelinas, has been MTA-Amtrak feuding “over who should do what, as the clock was running and people were getting paid” on Amtrak property in Queens.
Likewise, East Side Access involves more costly deep digging under Grand Central, not bringing trains into it, essentially to sidestep a longstanding feud between LIRR and Metro-North Railroad – both, ironically, under the same MTA umbrella.
“One of the big issues is that there’s no one agency in charge,” said Gelinas, who cited the successes of dedicated transit agencies Régie Autonome des Transports Parisiens, or RATP, and Transport for London in Paris and London, respectively.
Creation of such an agency would be a longshot in New York.
Other far-reaching proposals could struggle to gain traction as well.
After Wednesday’s MTA board meeting, interim executive director Ronnie Hakim and interim chairman Fernando Ferrer quickly dismissed questions about whether their agency could take over Penn Station from Amtrak.
According to Cure, reassigning PATH to New Jersey Transit is also a reach.
“PATH is a money loser. Every mass transit system is a money loser. Operating resources from fares do not cover expenses. PATH gets by receiving funding from the Port Authority’s money-making operations … airports, bridges and tunnels.
“I don’t think anyone’s that eager to take over PATH. NJ Transit has its own problems.”