NY: East Side Access Runs $1B Over Budget

May 22--The MTA's enormous East Side Access project to link the Long Island Rail Road to Grand Central Terminal by 2019 is running almost $1 billion over budget, and the MTA is uncertain where it will find the extra money, officials said Monday.

At a Metropolitan Transportation Authority committee meeting, Capital Construction president Michael Horodniceanu announced that a revised estimate of the project now pegs the price tag as high as $8.24 billion — nearly a billion more than the last estimate of $7.33 billion from 2009.

MTA officials said they plan various measures to try to bring the new estimate down to $7.98 billion — still a $650 million increase — including by temporarily reducing service on the LIRR as needed to let more work get done.

But MTA chairman Joseph Lhota said it was important that the agency be realistic about the project's cost after a history of estimates that have been "consistently blown."

"We have to go with the right number," Lhota told the meeting of the Capital Program Oversight Committee. "The public deserves that."

The higher expenses are related to unexpected delays that Horodniceanu blamed largely on competing rail infrastructure projects, including Amtrak's continuing replacement of all the tracks inside the four East River Tunnels into and out of Penn Station. The simultaneous projects are causing construction bottlenecks that reduce efficiency and throw related work off schedule. Delays typically drive up the costs of employees, contractors and materials.

The other projects are also diverting workers and resources away from the most critical site for East Side Access — the Harold Interlocking rail yard in Long Island City.

Work there is "much more complicated than we envisioned," Horodniceanu said.

MTA officials have called East Side Access the largest public works project currently under way in the United States. It aims to bring the LIRR to Metro-North's longtime Manhattan terminal, Grand Central, via newly bored tunnels in Manhattan and Queens.

Lhota has said the project will save about 160,000 LIRR riders at least 40 minutes a day on their commutes, and also raise property values in Nassau and Suffolk counties by making Long Island more attractive to people who work on Manhattan's East Side.

Lhota announced at a Long Island Association meeting earlier this month that the complications could delay completion of the megaproject until 2019 — a year later than most recent MTA estimates. Eight years ago, the MTA was predicting the project would be completed by 2011.

It remains unclear how the MTA will pay for the cost overrun. The federal government is kicking in $2.6 billion toward the project, and the MTA has borrowed for the rest. The authority is still hoping to get $2.2 billion more in federal loans.

The MTA is carrying $35 billion in debt, and to pay it off either has to boost revenue or cut costs. MTA board members have voiced worry about the long-term debt burden on future commuters.

Mitchell Moss, director of the Rudin Center for Transportation Policy and Management at New York University, said the project has grown to become a far heavier burden for the MTA than the agency had expected. In 1999, the MTA estimated the project's cost at $2.4 billion.

Still, Moss commended Lhota for telling the "truth, which is that this project is far more expensive than initially presented."

Sen. Charles Fuschillo Jr. (R-Merrick) agreed that previous MTA administrations "grossly underestimated" the complexity of East Side Access, and noted that the Federal Transit Administration projected the total cost at more than $8 billion more than two years ago.

"I believe what we have now is an honest calculation and timetable," said Fuschillo. He added that the MTA has not asked the state for additional funding to cover the overrun. "We have to wait and see what the MTA is looking for."

Copyright 2012 - Newsday, Melville, N.Y.

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