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East Side Access price goes up again, now stands at $11.2B

The Metropolitan Transportation Authority is blaming much of the latest $955 million budget increase on Amtrak.

The cost of the East Side Access project to bring the LIRR to Grand Central, has ballooned by nearly $1B, the MTA revealed Wednesday in an exclusive tour of the Manhattan site. The project, which began in 2007 and had been projected to cost $10.2B before the latest overrun of $955M, is still on track to be completed by 2022, officials said (Credit: Newsday / Alfonso Castillo; Charles Eckert)

The price tag for the MTA’s problem-plagued East Side Access megaproject to link the LIRR to Grand Central Terminal has risen another billion dollars to about $11.2 billion — more than 2 1⁄2 times the original estimate when the project was first proposed in the late 1990s.

The MTA is blaming much of the latest $955 million budget increase on Amtrak, saying that its failure to provide needed help at a critical work site in Queens has resulted in lengthy delays and ballooning costs.

Despite the latest setback, MTA officials say the project — called the largest public works effort underway in the United States — will remain on schedule to be completed by the end of 2022, thanks in part to new management strategies that will speed up the pace of the work.

Metropolitan Transportation Authority chief development officer Janno Lieber, who last year took over management of East Side Access, acknowledged that MTA mismanagement of the project was also a factor in the latest cost overrun.

Among the agency’s mistakes, Lieber said: setting unrealistic budget and timeline estimates “without really knowing the complexity” of the project; unnecessarily splitting the project into 50 different contracts that have frequently conflicted with each other; making discretionary design changes after the project was well underway; overpaying for some contracts that were not competitively bid and even at one point ordering steel beams that were the wrong size.

“We bear some of the responsibility. But the principal change impact to the cost is the extension of the time of the construction. And that is mostly attributable to Amtrak,” said Lieber, referencing what the MTA has said is Amtrak’s inadequate cooperation at the Harold Interlocking in Queens, where all work involving Amtrak’s overhead catenary wire system must be overseen by the federally funded intercity passenger railroad.

In a letter to new Amtrak president and chief executive officer Richard Anderson sent Friday, Lieber said Amtrak had ”ignored” the MTA’s repeated pleas for cooperation and caused $340 million in cost overruns just since 2014. “Going forward we need Amtrak to give the East Side Access project a very different level of effort,” Lieber wrote in the letter.

Amtrak has suggested that competing construction projects, like the renewal of aging infrastructure at Penn Station, has hampered its ability to help. In a statement, Amtrak executive vice president Stephen Gardner called East Side Access “one of many important projects that Amtrak is supporting in and around Penn Station.”

“We’ve been working to increase our support of MTA’s work and remain committed to advance their project while also making necessary progress on the other important work that is critical to safety, reliability and existing service,” Gardner said.

Although the MTA plans to seek funding for the new costs in its next five-year capital program, which is set to begin in 2020, the agency, for the first time, is also going after Amtrak to cover some of the added expense.

Lieber is asking Amtrak to provide the services of its employees for free to the MTA, which has until now reimbursed Amtrak for labor costs. He also wants Amtrak to cover the remaining costs of some unrelated upgrades that the MTA promised Amtrak as part of its construction work, including a new train-wash facility at Harold.

Lieber justified the request by pointing out that about $1.5 billion in improvements encompassed by the project directly benefit Amtrak, including the modernizing of the overhead wire system at Harold.

Lieber said actual construction costs have only risen about 6 percent, but the agency is looking to rebuild its “contingency” fund to cushion unexpected costs. That fund has been gradually depleted with every misstep along the way of the project, which began construction about a decade ago.

MTA officials say they’ve already awarded about 90 percent of all contracts and completed about 75 percent of construction for the project, which will connect the LIRR to a second terminal on Manhattan’s East Side via more than eight miles of newly constructed tunnels.

Proponents of East Side Access, which is expected to serve about 162,000 daily customers, say the project will shave up to 40 minutes in commuting time and also provide much-needed redundancy when there are problems with service into or out of Penn Station.

“We’re well on the way to getting to the end of the line,” said MTA Chairman Joseph Lhota, who expressed confidence in the latest cost and schedule estimates made by Lieber. “The one issue in the path to success is Amtrak allowing us to do the work that we need to do at the Harold Interlocking.”

Despite the numerous complications faced by East Side Access, progress was apparent during a tour of the project last week. Deep below Grand Central Terminal, an area once dominated by hazy caverns of pulverized rock and knee-deep muck is now starting to look like an actual train station, complete with vaulted ceilings, concrete platforms where commuters will one day board trains, and some of the longest escalators in the state.

Both the Nassau and Suffolk county executives also recently toured the project, and spoke of its importance. “We owe it to Long Islanders to get this project done so that they can experience shorter commutes and better reliable service,” Suffolk County Executive Steve Bellone said.

“It’s imperative this project is completed as soon as possible. That’s the best way to stop the cost increases,” said Nassau County Executive Laura Curran, adding that East Side Access “can transform this region.”

Lieber said several changes in how the project is managed should result in smoother sailing going forward. They include the creation of a new executive steering committee that will require closer involvement of LIRR personnel, including new railroad president Philip Eng; streamlining approval processes so that project changes that used to take 300 days can be made within three months; and creating a checklist of 45,000 different tasks to improve the coordination and flow of work.

MTA officials said the new efficiencies should allow the project to keep to its existing completion date of December 2022.

“The construction work on the East Side Access project is critically important as it will not only provide thousands of Long Islanders with significant upgrades to commuter reliability, but will be a much needed catalyst to help spur new development and economic opportunity in our region,” State Sen. Elaine Phillips (R-Flower Hill) said in a statement. “Both Amtrak and the MTA need to keep the project on schedule and, at no point, should any increase in costs fall on the shoulders of hardworking taxpayers.”

Another key change, Lieber said, is how the project will be marketed — shifting from a focus on its perks to how critical it is to the region’s transportation infrastructure.

“The project has been sold to the public as, ‘It’s nice to come to Grand Central instead of coming to Penn Station. It might save you some time,’ ” Lieber said. “This isn’t a ‘nice-to-have.’ This is a ‘got-to-have.’ In the wake of Sandy, we know we need more than one way to get in and out of Manhattan.”

Mark Epstein, chairman of the LIRR Commuter Council, the railroad’s official watchdog group, suggested riders have already heard enough, and just want to see results.

“Why are we selling a project that’s already being paid for? We’re past that point,” said Epstein, who, despite the latest budget overrun, found solace in the timeline not being pushed further back. “Let’s just get it done.”

East Side Access delays and cost overruns over the years

In 1999 it was supposed to cost $4.3 billion and be completed by 2009.

In 2003 it was supposed to cost $5.3 billion and be completed by 2011.

In 2004 it was supposed to cost $6.3 billion and be completed by 2012.

In 2009 it was supposed to cost $7.3 billion and be completed by 2016.

In 2012 it was supposed to cost $8.3 billion and be completed by 2019.

In 2014 it was supposed to cost $9.7 billion and be completed 2021.

In 2015 it was supposed to cost $10.2 billion and be completed by 2022.

Today, it’s supposed to cost $11.2 billion and be completed by 2022.