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Congress Orders Study on Transit Project Costs

Thursday, April 5, 2018

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The U.S. Government Accountability Office will be taking a look at the cost of mass-transit infrastructure projects in the country, and especially in the New York City area, to determine why construction often ends up costing far more than similar projects elsewhere.

The New York Times reported last week that the GAO will be investigating at the request of Congress in a move authorized in last month’s omnibus spending bill. A similar study was written into budget legislation last year but the language was removed before the budget bill passed.

About the Report

The GAO, an official spending watchdog for the federal government, will compare the process involved in major transit infrastructure projects in the U.S. with those in other countries in hopes of determining why cost overruns are so common on U.S. jobs.

Second Avenue Subway
Marc A. Hermann / MTA New York City Transit, CC BY 2.0, via Wikimedia Commons

The New York Times points out, for example, that the recent Second Avenue Subway project in New York City cost $2.5 billion per track mile, in comparison with $500 million per track mile for similar projects internationally. 

The GAO will look at factors including how contracts are written and carried out, and whether regulatory barriers are driving up costs on transit projects. The report will look at transit projects throughout the country, but will reportedly focus especially on New York City projects.

The Times points out, for example, that the recent Second Avenue Subway project in New York City cost $2.5 billion per track mile, in comparison with $500 million per track mile for similar projects internationally. The newspaper recently published an investigation of ballooning costs on the Long Island Rail Road project, which is set to cost $12 billion total, pointing to “politically connected labor unions, construction companies and consultants” inflating their fees at the expense of taxpayers.

The GAO report must be filed before the end of this year.

Infrastructure Plan Developments

The GAO investigation comes as Congress and President Donald J. Trump attempt to move forward on an infrastructure funding plan that would include $200 billion in spending to spur $1.5 trillion in state, local and private infrastructure investment over the next 10 years.

The infrastructure plan set out by the Trump administration would expand the Railroad Rehabilitation and Improvement Financing program and subsidize assistance for short-line freight or passenger rail projects in an effort to spark state investment in the projects. But the plan would also potentially come with cuts to Amtrak and mass transit funding at the federal level, according to administration officials.

The “Infrastructure Czar” behind the plan, DJ Gribbin, announced Wednesday (April 4) that he would be stepping down from his post. Trump said last week that the passage of the plan would like not happen until after the mid-term election in November.

   

Tagged categories: Construction; Government; Mass transit; NA; North America; Program/Project Management; Public Transit

Comment from Lou Lyras, (4/6/2018, 8:53 AM)

A big reason is Labor Law 240/241. Whereby any “gravity” related injury is the contractor’s responsibility. A fall from 6 inches can cost the contractor millions. This law has chased most insurance companies away from NYC, and the contractors that have insurance pay very high premiums. Hence, contractors have stopped working in the city...competition is reduced.


Comment from Michael Halliwell, (4/9/2018, 11:33 AM)

Don't I recall several PaintSquare articles recently about investigations into collusion, price fixing, "ghost workers" and massive corruption on some of the big construction projects in New York City? Combined with above noted insurance issues, I can see how it would become extremely expensive to get any work done NYC.


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