> 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.
> For years, The Times found, public officials have stood by as a small group of politically connected labor unions, construction companies and consulting firms have amassed large profits.
> 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.
> 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.
Accounts know nothing about running construction projects. If you want to control costs, use fixed price or GMP contracts instead of cost plus or T&M. You also need to make sure your engineers are accurately representing the work scope in the RFP so you don’t get change ordered to death.
That being said, there is definitely corruption in the NYC construction market that doesn’t exist in the market I operate in, and I’ve read articles specifically about sandhogs inflating contracts and so on. Their union contract could possibly specify certain positions being required that are extraneous to the work being performed that would inflate the cost of the project and line the union’s coffers.
Net margins on a 9 to 10 figure construction contract should be around 3-5% in a competitive market.
> an alternative interpretation is that the union workers know more about how to safely do underground work than accountants and supervisors do.
As someone in New York who supports congestion pricing and public transit, I will say this: yes, there is a ton of waste and mismanagement at the MTA, and the TWU is unfortunately frequently one of the impediments to progress here. They have a history of opposing things like industry-standard safety improvements, sometimes even things which create jobs for their members, for arcane political reasons that require a deep understanding of their internal politics to comprehend. It would be nice if the TWU were a more consistent force for efficiency and progress, but they are not. You can compare to unions elsewhere in the world, or even to other unions in the US, and the TWU still winds up as an outlier in many of these areas.
That said, OP is pointing the finger at the wrong party. The MTA is overseen by the state. The responsibility for these inefficiencies and cost overruns lie with the state legislature and the governor. Andrew Cuomo, who was the governor at the time that article was written, famously washed his hands off the MTA. He was so brazen as to even publicly claim that he had no authority over them, at the same time as he was making unilateral management decisions on their behalf, including ordering the MTA to write a check to an upstate ski resort, to bail the resort out after a low-business season.
Fortunately, the money from congestion pricing is legally earmarked by state law and under a settlement from a federal lawsuit (the lawsuit was unrelated to congestion pricing, but the funding was offered up as a settlement term), so there's a lot less wiggle room for things to go wrong.
Congestion pricing is a solid policy win. That doesn't mean the governor (Hochul) and the state legislature don't need to step up and do their jobs - which means real, material oversight - but criticizing congestion pricing on those grounds, when it's one of the few budget items which actually has been legally overseen and structured - is completely off-base.
I think that particular theory is addressed by the "four times more laborers than elsewhere in the world" bit, if it includes the developed world. (Which I strongly suspect it does.)
