Swelling ‘Soft’ Costs
The M.T.A.’s high costs are not limited to the companies that build the tunnels. Projects start burning through cash long before construction begins.
On average, “soft costs” — preliminary design and engineering, plus management while construction is underway — make up about 20 percent of the cost of transit projects in America, according to a 2010 report by the Transportation Research Board. The average is similar in other countries, contractors said.
Not in New York.
The latest federal oversight report for the Second Avenue subway projected soft cost spending at $1.4 billion — one-third of the budget, not including financing expenses. M.T.A. officials said that number was high because it included some costs for design of later phases of the line. But experts said it was still shocking.
“The crazy thing is it’s so high even with everything else,” said Larry Gould, a transit consultant and former M.T.A. subway planner. “If we have three or four times as many workers, how can the percentage for soft costs be so high?”
Soft costs for East Side Access are expected to exceed $2 billion. The project plan called for the hiring of 500 consultants from a dozen different companies, according to a 2009 federal oversight report.
Both the Second Avenue subway and East Side Access projects hired the same main engineering firm: WSP USA, formerly known as Parsons Brinckerhoff. The firm, which designed some of New York’s original subway, has donated hundreds of thousands to politicians in recent years, and has hired so many transit officials that some in the system refer to it as “the M.T.A. retirement home.”
The firm was the only vendor to bid on the engineering contract for the Second Avenue subway, records show. On East Side Access, it is sharing the contract with STV Inc., which recently hired the former M.T.A. chairman Thomas F. Prendergast. The contract was initially for $140 million, but it has grown to $481 million.
WSP USA declined to answer questions. “WSP has undertaken complex and enduring infrastructure projects across the U.S., and the New York region presents unique needs and challenges,” the firm said in a statement.
The M.T.A. is partly to blame. Officials have added to the soft costs by struggling to coordinate between vendors, taking a long time to approve plans, insisting on extravagant station designs and changing their minds midway through projects. In 2010, they hired a team of three consultants to work full time on East Side Access “operational readiness” — getting the tunnel ready to open — even though contractors knew construction would not end for another decade.
Janno Lieber, who joined the M.T.A. as chief development officer in April, acknowledged there were parts of the authority’s project management approach that have been “broken” and “self-defeating.” Changing plans midway through projects is a “huge issue,” as is over-customization of designs and poor management of consultants, he said.
“We just have to do a much better job,” Mr. Lieber said. “We’re relying on these consultants to run our projects, and we’re not getting good results out of them.”
Others have a more skeptical perspective about the soft costs.
Jack Brockway, an executive at Herrenknecht, a German manufacturer of tunnel-boring machines, said he got “stacks and stacks and stacks” of instructions from consultants for his work on the Second Avenue subway, down to details that barely made sense.
“It makes you wonder if it’s really necessary, or if they’re just trying to do something to justify how much they’re getting paid,” Mr. Brockway said.
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The View From Paris
Across the Atlantic Ocean, Paris is working on a project that brings the inefficiency of New York into stark relief.
The project, called the Line 14 extension, is similar to the Second Avenue subway. Both projects extend decades-old lines in the hopes of reducing systemwide overcrowding. Both involved digging through moderately hard soil just north of the city center to make a few miles of tunnel and a few stations about 80 feet underground. Both used tunnel-boring machines made by Herrenknecht. Both faced strict regulations, high density and demands from neighbors, which limited some construction to 12 hours per day.
But while the Second Avenue Subway cost $2.5 billion a mile, the Line 14 extension is on track to cost $450 million a mile.
On a recent afternoon at a Line 14 construction site, an official expressed disbelief that New York was spending so much.
“We thought ours was expensive,” said Laurent Probst, managing director of Île-de-France Mobilités, which controls transit in the French capital.
As he descended into the hole carved for the future Pont Cardinet station, it became clear how the costs could be so different. Scattered around the cavern were a couple dozen workers, running drills, smoothing over soil and checking electrical systems. Mostly, they worked by themselves.
Mr. Probst, 39, wearing a suit and blue tie under his orange safety jacket, pushed the button to operate the elevator himself.
France’s unions are powerful, but Mr. Probst said they did not control project staffing. Isabelle Brochard of RATP, a state-owned company that operates the Paris Metro and is coordinating the Line 14 project, estimated there were 200 total workers on the job, each earning $60 per hour. The Second Avenue subway project employed about 700 workers, many making double that (although that included health insurance).
The tunnel-boring machine chewing through dirt north of Pont Cardinet — a secondhand machine, Ms. Brochard noted — was staffed by a dozen laborers who bounced between the control room, the cutting wheel and the sides of the machine.
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