 A recent announcement by the Metropolitan Transportation Authority (MTA) due to ongoing litigation against implementation of congestion pricing, $15 billion in capital projects contained within the $51 billion 2020-2024 Five Year Capital Plan are now on hold. This includes $7.7 billion for the Second Avenue subway.
This means $3.4 billion in the Federal Transit Administration Second Avenue Subway Phase 2 Full Funding Grant Agreement to MTA is in jeopardy of being lost.
MTA previously accepted the terms and conditions within the grant offer. This included a legal commitment that the $4.3 billion in local share was real, secure and in place. FTA caps its funding at $3.4 billion based upon the MTA’s commitment of a secure $4.3 billion local share. MTA’s local share was based upon implementation of Congestion Pricing.
Placing the project officially on hold and failure to proceed with advancing the project will eventually result in FTA de-obligating its $3.4 billion in funding and closing out the grant. MTA would lose $3.4 billion in discretionary federal funding. Never in MTA history has the MTA lost FTA funding due to reneging on providing its legally required matching local share in any approved FTA grant. MTA Chairman Janno Lieber would be the first MTA chairman to do so and have egg on his face.
The federal Department of Transportation Office of Inspector General will be monitoring FTA to insure that the agency enforces all legal requirements as contained in the FTA $7.7 billion Second Avenue Subway grant to MTA.
Several months ago, the MTA promised that more efficient station designs could reduce the overall project cost by $300 million. This may not hold water based upon past project history. There is no way to know today, assuming the MTA finds $4.3 billion, what the final price tag would be for construction of all three new stations.
The MTA must first advertise, respond to bidders’ questions, receive and open bids, followed by contract award There are always contract change orders during construction due to unforeseen site conditions or requested by different NYC Transit departments adding to costs. The MTA will never know the final cost for all three new stations estimated to worth over $4 billion until 100% of the work is completed and final payment is released to the contractor.
In April 2019, the MTA Office of Capital Construction President Janno Lieber claimed that the MTA could save between $500 million to $1 billion in costs for the proposed Second Avenue Subway Phase 2. This would have reduced the overall tab down to almost $5 billion. Promised cost savings were based upon reduction in excavation for both the 125th Street Station and building the 116th Street Station in space no longer needed for other project work. Fast forward to February 2022 and instead the cost increased to $6.9 billion. In 2023, the cost grew to $7.7 billion. The MTA lacks credibility when it comes to promised cost savings.
Transparency is required on the part of Gov. Kathy Hochul, MTA Chairman Janno Lieber, MTA Office of Capital Construction Jamie- Torres-Springer and NYC Transit President Richard Davey when it comes to securing the required $4.3 billion MTA local share and any future promised cost savings. The same holds true for my old colleagues at the Federal Transit Administration when it comes to enforcement for the approved $7.7 billion grant.
Taxpayers, commuters, MTA Board members, elected officials and transit advocates should expect nothing less.
Larry Penner
Great Neck
Larry Penner is a transportation advocate, historian and writer who previously served as a former Director for the Federal Transit Administration Region 2 New York Office of Operations and Program Management.
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