<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By Stephen Smith</p> <p>Close watchers of mass transit in the New York region won't be surprised by what Barry Kluger, inspector general at the Metropolitan Transportation Authority, found in his <a href="http://mtaig.state.ny.us/assets/pdf/12-05.pdf">report on waste</a> at the Long Island Rail Road, released last week.</p> <p>The report, which analyzed the railroad's Structural Maintenance Division, was a scathing critique of labor practices at the LIRR. Beyond documenting crews' habits of showing up at work sites late and leaving early, it found stunning inefficiencies in methods, along with an almost complete lack of oversight by the agency's so-called managers.</p> <p>Reading the report, it's difficult to understand why so many people involved in city and state politics feel that service reductions, fare increases and even more subsidies are necessary to solve the MTA's perennial budget problems.</p> <p>One of the case studies that the inspector general examined was a staircase replacement at Great Neck, a busy express station on the LIRR's Port Washington branch. Even after adjusting expectations to fit public sector wages and work rules, Kluger's office found that labor costs for the low-tech project to replace a single staircase exceeded $260,000, when they should have amounted to less than $100,000.</p> <p>The LIRR is known as the most inefficient of the regional railroads in the New York area -- a reputation partly earned by the massive disability pension fraud scandal <a href="http://www.nytimes.com/2008/09/21/nyregion/21lirr.html">first uncovered by the New York Times in 2008</a> -- but its problems are hardly unique.</p> <p>In 2010, Michael Horodniceanu, president of the MTA's Capital Construction division, cited similar labor inefficiencies in the agency's tunnel-boring work. In response to a question from blogger Benjamin Kabak about the MTA's high capital costs, <a href="http://secondavenuesagas.com/2011/11/09/building-a-subway-most-expensive/">Horodniceanu claimed</a> that thanks to inefficient labor rules and practices, New York subway tunnel boring operations require 25 workers, while Spanish transit builders get away with only nine.</p> <p>The ratio of waste to legitimate work cited by Horodniceanu is almost exactly the same as that identified on the Great Neck staircase replacement.</p> <p>In other words, the MTA encounters the same problems digging subway tunnels worth billions of dollars as it does doing basic staircase reconstructions. The result is the MTA's large capital projects clock in at <a href="http://pedestrianobservations.wordpress.com/2011/05/16/us-rail-construction-costs/">many times the cost</a> of their European and East Asian counterparts.</p> <p>East Side Access, a project to connect the LIRR to Grand Central Terminal, is perhaps the most egregious example of MTA inefficiency. At a whopping $4 billion per kilometer of new tunnel constructed, it will be far and away the most expensive transit tunneling project in the world on a per-distance basis.</p> <p>And the inefficiency doesn't stop when the capital projects are completed. New York's regional railroads, and others throughout the U.S., <a href="http://www.bloomberg.com/news/2012-08-27/labor-rules-snarl-u-s-commuter-trains.html">routinely waste the majority of their onboard labor costs</a> on unnecessary conductors who punch every single ticket, on every single trip.</p> <p>Faced with these glaring inefficiencies, it's surprising that so many people believe the MTA is incapable of continuing to operate at current service levels without new revenue streams.</p> <p>Transit advocates cried bloody murder when a Long Island judge ruled the payroll mobility tax unconstitutional, depriving the MTA of up to 15 percent of its annual budget. MTA Chairman Joe Lhota said that the decision would lead to "devastating service cuts and ever-increasing fare hikes."</p> <p>Carol Kellermann, president of the Citizens Budget Commission, called fare increases, a "trimmed service schedule," and more contributions from "city and suburban" residents "unavoidable elements of a sensible solution."</p> <p>They may be unavoidable elements of a politically palatable solution, but is it really "sensible" to continue throwing good money after bad? There seems to be no limit to the amount of waste the MTA will tolerate, so what reason do taxpayers have to believe that their extra contributions won't be yet another excuse for the agency to delay needed reforms?</p> <p>To his credit, Lhota is <a href="http://secondavenuesagas.com/2012/08/31/amidst-private-negotiations-a-public-statement-on-opto/">pushing labor unions</a> to abandon the superfluous subway conductor, switching to the one-person train operation model that is standard on most subway systems. But there is a lot more room for such efficiency gains. If the MTA is routinely shelling out more than double what it should for things like new capital projects, simple repairs and onboard labor, it should spend more effort on cost control, and less on trying to extract more money from taxpayers and shirking its service obligations.</p> <p>(<a href="http://topics.bloomberg.com/stephen-smith/">Stephen Smith</a>, a writer based in <a href="http://topics.bloomberg.com/brooklyn/">Brooklyn</a>, New York who covers land use and transportation, is a contributor to the Ticker. <a href="https://twitter.com/MarketUrbanism">Follow</a> him on Twitter.)</p> <p>Read more breaking commentary from Bloomberg View at <a href="http://www.bloomberg.com/view/the-ticker/">the Ticker</a>.</p> </body> </html>