That's the tip of the iceberg - the linked article goes into much more detail.
Procurement practice and staffing practice are huge contributors to the excessive cost. The projects are massively overstaffed contrasted with comparable projects elsewhere - the article:
> "The staffing of tunnel-boring machines came up repeatedly in interviews with contractors. The so-called T.B.M.s are massive contraptions, weighing over 1,000 tons and stretching up to 500 feet from cutting wheel to thrust system, but they largely run automatically. Other cities typically man the machine with fewer than 10 people."
> "It is not just tunneling machines that are overstaffed, though. A dozen New York unions work on tunnel creation, station erection and system setup. Each negotiates with the construction companies over labor conditions, without the M.T.A.’s involvement. And each has secured rules that contractors say require more workers than necessary."
> "In New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,” according to an internal report by Arup, a consulting firm that worked on the Second Avenue subway and many similar projects around the world."
The fictional no-show jobs that are pure corruption make up only a small amount of the cost of projects - a much larger portion are jobs are real, but largely unnecessary.
The other big practice cited in the article is that the unions do not negotiate with the MTA, but rather with contractors. Contractors, receiving a percentage of the total cost of the contract, have no incentive to reign in labor costs and staffing - and in fact have every incentive to do exactly the opposite.
A cheaper, smaller contract employing fewer people is worth less to the contractor. Realistically the city or the MTA should be negotiating with labor unions directly.
>An accountant discovered the discrepancy while reviewing the budget for new train platforms under Grand Central Terminal in Manhattan.
>The budget showed that 900 workers were being paid to dig caverns for the platforms as part of a 3.5-mile tunnel connecting the historic station to the Long Island Rail Road. But the accountant could only identify about 700 jobs that needed to be done, according to three project supervisors. Officials could not find any reason for the other 200 people to be there.
>“Nobody knew what those people were doing, if they were doing anything,” said Michael Horodniceanu, who was then the head of construction at the Metropolitan Transportation Authority, which runs transit in New York. The workers were laid off, Mr. Horodniceanu said, but no one figured out how long they had been employed. “All we knew is they were each being paid about $1,000 every day.”
...
>A Dizzying Maze of Jobs
>The reasons for the M.T.A.’s high costs start with the sheer number of people employed.
>Mike Roach noticed it immediately upon entering the No. 7 line work site a few years ago. Mr. Roach, a California-based tunneling contractor, was not involved in the project but was invited to see it. He was stunned by how many people were operating the machine churning through soil to create the tunnel.
>“I actually started counting because I was so surprised, and I counted 25 or 26 people,” he said. “That’s three times what I’m used to.”
>The staffing of tunnel-boring machines came up repeatedly in interviews with contractors. The so-called T.B.M.s are massive contraptions, weighing over 1,000 tons and stretching up to 500 feet from cutting wheel to thrust system, but they largely run automatically. Other cities typically man the machine with fewer than 10 people.
>It is not just tunneling machines that are overstaffed, though. A dozen New York unions work on tunnel creation, station erection and system setup. Each negotiates with the construction companies over labor conditions, without the M.T.A.’s involvement. And each has secured rules that contractors say require more workers than necessary.
>The unions and vendors declined to release the labor deals, but The Times obtained them. Along with interviews with contractors, the documents reveal a dizzying maze of jobs, many of which do not exist on projects elsewhere.
>There are “nippers” to watch material being moved around and “hog house tenders” to supervise the break room. Each crane must have an “oiler,” a relic of a time when they needed frequent lubrication. Standby electricians and plumbers are to be on hand at all times, as is at least one “master mechanic.” Generators and elevators must have their own operators, even though they are automatic. An extra person is required to be present for all concrete pumping, steam fitting, sheet metal work and other tasks.
>In New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,” according to an internal report by Arup, a consulting firm that worked on the Second Avenue subway and many similar projects around the world.
>That ratio does not include people who get lost in the sea of workers and get paid even though they have no apparent responsibility, as happened on East Side Access. The construction company running that project declined to comment.
Complex projects in places other than NYC don't seem to have the same extreme level of superfluous labor that drives up the costs.
"The unions and vendors declined to release the labor deals, but The Times obtained them. Along with interviews with contractors, the documents reveal a dizzying maze of jobs, many of which do not exist on projects elsewhere.
There are “nippers” to watch material being moved around and “hog house tenders” to supervise the break room. Each crane must have an “oiler,” a relic of a time when they needed frequent lubrication. Standby electricians and plumbers are to be on hand at all times, as is at least one “master mechanic.” Generators and elevators must have their own operators, even though they are automatic. An extra person is required to be present for all concrete pumping, steam fitting, sheet metal work and other tasks.
In New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,” according to an internal report by Arup, a consulting firm that worked on the Second Avenue subway and many similar projects around the world."
Ask the MTA - several billion to dig a tunnel that should cost a couple hundred million. Hundreds of no-work jobs nobody can explain, with unions dictating that there needs to be 25 people there operating a machine that takes 8 people to operate.
Just cut out the corruption and you've saved hundreds of millions.
Overreaching unions. Layers of consultants. Squabbling jurisdictions. And as the article mentions, the fact that they build so infrequently that they essentially have to skill up from scratch every time and can never optimise or learn from previous mistakes.
There's a lot of information about this out there but that about covers it I think. Here's a nice quote from a nytimes article:
"Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show."
> Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show.
> The critics pointed to several unusual provisions in the labor agreements. One part of Local 147’s deal entitles the union to $450,000 for each tunnel-boring machine used. That is to make up for job losses from “technological advancement,” even though the equipment has been standard for decades.
This has been covered in the NY Times [1] and I've read more detailed breakdowns of other projects in more transit/government focused publications. The short version is that the government doesn't do a very good job with planning despite spending a ton on it and the combination of union labor and the hiring structure leads to workers getting paid several hundred dollars an hour during overtime (which happens due to the planning) and more workers performing a task than similar transit efforts elsewhere in the developed world.
It costs them $1.5B-$3.5B per mile of track in NYC, while other global cities do it for a tenth of the cost.
One glaring example of mismanagement of funds:
The budget showed that 900 workers were being paid to dig caverns for the platforms as part of a 3.5-mile tunnel connecting the historic station to the Long Island Rail Road. But the accountant could only identify about 700 jobs that needed to be done, according to three project supervisors. Officials could not find any reason for the other 200 people to be there.
If they can’t get the costs down to the same range as the countries whose systems they envy, how can they compete?
Kind of weird to use a picture of the East Side Access project in New York as the lede. New York is a whole different case from the rest of the country. We do know why infrastructure in New York is so absurdly expensive. Outright theft and fraud is a big culprit: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...
> The budget showed that 900 workers were being paid to dig caverns for the platforms as part of a 3.5-mile tunnel connecting the historic station to the Long Island Rail Road. But the accountant could only identify about 700 jobs that needed to be done, according to three project supervisors. Officials could not find any reason for the other 200 people to be there.
> “Nobody knew what those people were doing, if they were doing anything,” said Michael Horodniceanu, who was then the head of construction at the Metropolitan Transportation Authority, which runs transit in New York. The workers were laid off, Mr. Horodniceanu said, but no one figured out how long they had been employed. “All we knew is they were each being paid about $1,000 every day.”
> The discovery... occurred in 2010 and was not disclosed to the public
This sort of behavior is unfortunately commonplace.
Actually, it's worse than that, if you read the article.
NY Government (Governor Andrew Cuomo): Let's build a new subway station. Hey MTA, why don't you negotiate for us and figure out how much it costs.
MTA: Hey TWU, you can figure this out for us, right?
TWU: Hey contractors and vendors. How much will it cost us to have you supply parts and do some of the work for this project?
Contractors/Vendors: Oh, that'll be $500,000, which allows us to make a healthy profit margin of 20%.
TWU: That's not enough - you should be charging us $800,000, so we can make a healthy margin as well without cutting into yours.
Contractors/Vendors: By golly, you're right!
TWU: Also, add another $200,000, because we need an "operational readiness" consultant to help us when we're ready to finish. The project won't be ready for another ten years, but we should employ them the whole time just in case.
Contractors/Vendors: Sounds good to us. We're not the ones paying.
TWU: Hey MTA, this will cost $1,450,000. We added on an extra $450,000, because they're using a fifty-year-old piece of technology, and our contract stipulates that we get an extra $450,000 every time they do, to offset the job loss from this "technological advancement".
MTA: That sounds like a reasonable price for this. Hey Cuomo, you're the governor of NY. Can you please rubber-stamp this proposal to increase our budget by $1,450,000? Look how strapped for funding we are.
NY Government (Governor Andrew Cuomo): Well, you supported my last election bid, so I don't see why I should start questioning your prices now. Let's go!
...seriously, read the article. This isn't even an exaggeration.
NYC has much different issues with cost. You're paying for bad management that does long term projects as a series of short term projects and lets all the contractors go in between, for instance. You're paying the union for the right to use a tunnel boring machine, and you have an oiler watching your cranes because it's still 1910 and that's a full-time position. You're paying to move legacy infrastructure out of the way. You're paying to mine out cavernous underground subway stations through small shafts because apparently that's how America and America only designs the stations. I could go on.
There are “nippers” to watch material being moved around and “hog house tenders” to supervise the break room. Each crane must have an “oiler,” a relic of a time when they needed frequent lubrication. Standby electricians and plumbers are to be on hand at all times, as is at least one “master mechanic.” Generators and elevators must have their own operators, even though they are automatic. An extra person is required to be present for all concrete pumping, steam fitting, sheet metal work and other tasks.
In New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,” according to an internal report by Arup, a consulting firm that worked on the Second Avenue subway and many similar projects around the world.
NY prioritizes this stuff in a way that’s great for optics but is wasteful, ineffective, and at a snail’s pace in practice. Construction costs for subways, for example, are about $3.5B/mile [1] as of the most recent line built. Corruption is rampant in unions, contracts, and consultants. The unions are nice enough to demand positions like break room supervisor or elevator operator (to press buttons in an elevator), to other workers that no auditor or construction professional could figure out why they were at the work site, as mentioned in the below article. Not to mention a MWBE program that dictates how government funds are spent based on race and gender, which inflates construction costs further.
Bike lanes and other non-car infrastructure? Good luck using them. Between police and other supposed city workers parking wherever they want with (often fake) placards to mopeds and ebikes going 20+ mph in the wrong direction, biking and walking in NYC is simply not the enjoyable experience it ought to be. Traffic enforcement might as well not exist - anyone can drive around with a paper plate from Texas or drive however they’d like because NYPD refuses to enforce traffic laws.
> An accountant discovered the discrepancy while reviewing the budget for new train platforms under Grand Central Terminal in Manhattan.
> The budget showed that 900 workers were being paid to dig caverns for the platforms as part of a 3.5-mile tunnel connecting the historic station to the Long Island Rail Road. But the accountant could only identify about 700 jobs that needed to be done, according to three project supervisors. Officials could not find any reason for the other 200 people to be there.
> “Nobody knew what those people were doing, if they were doing anything,” said Michael Horodniceanu, who was then the head of construction at the Metropolitan Transportation Authority, which runs transit in New York. The workers were laid off, Mr. Horodniceanu said, but no one figured out how long they had been employed. “All we knew is they were each being paid about $1,000 every day.”
People may disagree with the following view and downvote, but still...
Where can I read an account of what the accountant found and how they reached their conclusions?
I can only trust/hope that the accountant had experience in construction and/or could consult with trustworthy advisers.
But the two things that came to mind as I read these three paragraphs were that
a) this is a puff piece written from the POV of "spending too much money" for whatever agenda this spin would help
b) this is cost-cutting being re-spun to look good
Some balance:
I live close by to a brand new driverless underground metro network that's being developed. I'm super excited to travel on the new trains when they arrive. I even hope to work there at some point.
When I was poking around the websites at an early point in the construction process, I found that one site's design/layout was clearly mobile-first to the extent that it was mobile-only and displayed Amusingly™ on a desktop PC; I also found a bit of a headscratcher with another site's DNS setup that I didn't know where to report; and when I poked around the bid platform that let any contractor sign up to be recruited to be part of the construction, I decided the whole system (bid platform and everything else) felt very very rushed-through.
So I have no industry experience but I've had a very tiny whiff of what a multi-billion project looks like on the ground as it's developing. Tons of overhead, lots of space for little things to fall through, etc etc.
I wouldn't be surprised if what's happening here is really just most of the same kinds of industrial-scale rounding errors.
But that makes it equally possible that what's reported really is unambiguously what happened, or that this is the uncomfortable norm and there's some spin.
A lot of it is that every last bit of expertise is outsourced.. not just physical labor and renting equipment but even the project planning, management and oversight. You'd think given decades of capital programs lined up, the state would want to have their own planning/management/oversight staff so that interests are more aligned.
You can't pay yet another vendor to care about & enforce cost discipline upon all the other vendors you are paying..
You also can't discount antiquated union work rules & strong lobbying. NYC transit work sites are more heavily overstaffed compared even to the equivalent Paris transit project. "Our unions have more power than in France" is a pretty high bar. From having 3x the staffing on the Tunnel Boring Machine to minimum required union machine oilers on-site based on the level of hand oiling that 1970s equipment needed (far more).
It's like if IT's staffing / roles were frozen in time from the 1970s and we still paid someone to sort punchcards.
>Construction companies, which have given millions of dollars in campaign donations in recent years, have increased their projected costs by up to 50 percent when bidding for work from the M.T.A., contractors say.
...
Consulting firms, which have hired away scores of M.T.A. employees, have persuaded the authority to spend an unusual amount on design and management, statistics indicate.
or this:
>"Worker wages and labor conditions are determined through negotiations between the unions and the companies, none of whom have any incentive to control costs."
All they say is that the reason starts with the number of people employed. If you continued reading past that point, they talk about other non-union incentives that drive up costs, like:
>Critics pointed out that construction companies actually have an incentive to maximize costs — they earn a percentage of the project’s costs as profit, so the higher the cost, the bigger their profit.
They also talk about the "soft costs" of NYC construction, like:
>The project plan called for the hiring of 500 consultants from a dozen different companies
And of course bureaucracy:
>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.
So while we can probably agree that unions are part of the problem, it's disingenuous to act like they are the whole problem.
Employee costs are 60% of the expenses for the MTA [1] and employees are making $30/hr + generous pension and medical benefits[2], I'm not sure how you can possibly justify your position.
That being said, paying union construction workers $1k/day (!) to do nothing is pretty egregious as well [3]
Procurement practice and staffing practice are huge contributors to the excessive cost. The projects are massively overstaffed contrasted with comparable projects elsewhere - the article:
> "The staffing of tunnel-boring machines came up repeatedly in interviews with contractors. The so-called T.B.M.s are massive contraptions, weighing over 1,000 tons and stretching up to 500 feet from cutting wheel to thrust system, but they largely run automatically. Other cities typically man the machine with fewer than 10 people."
> "It is not just tunneling machines that are overstaffed, though. A dozen New York unions work on tunnel creation, station erection and system setup. Each negotiates with the construction companies over labor conditions, without the M.T.A.’s involvement. And each has secured rules that contractors say require more workers than necessary."
> "In New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,” according to an internal report by Arup, a consulting firm that worked on the Second Avenue subway and many similar projects around the world."
The fictional no-show jobs that are pure corruption make up only a small amount of the cost of projects - a much larger portion are jobs are real, but largely unnecessary.
The other big practice cited in the article is that the unions do not negotiate with the MTA, but rather with contractors. Contractors, receiving a percentage of the total cost of the contract, have no incentive to reign in labor costs and staffing - and in fact have every incentive to do exactly the opposite.
A cheaper, smaller contract employing fewer people is worth less to the contractor. Realistically the city or the MTA should be negotiating with labor unions directly.
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