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The Weekly Fix: Throwing Money Down a Hole

The fix is in. If you want to witness corruption in action, look no further than the New York subway.

The New York Times revealed in detail how the city’s misuse of taxpayer funds, combined with the influence of politically-connected labor unions, consultants and construction companies, inflated the Long Island Rail Road Project’s estimated cost to an eye-watering $3.5 billion per mile of track.

You read that right. Three and a half billion (with a “b”) dollars, per mile of railroad track. That puts a $12 billion price tag on the entire project. The average cost of transit construction projects in the United States and around the world is $500 million per mile of track.

There were a multitude of reasons for the inflated project costs. For starters, the city hired hundreds of people to do nothing at all. When Manhattan’s Grand Central Terminal needed new train platforms, the city hired 900 workers to dig caverns. Each worker was paid approximately $1000 a day.

Here’s the thing: the job only required 700 workers. What were the other 200 people doing to earn their generous salary? Michael Horodniceanu, then-head of construction for the MTA, told The New York Times: “Nobody knew what those people were doing, if they were doing anything.”

On average, the city of New York hires four times the number of underground construction personnel required to complete similar projects in other locations. The New York transit construction market has little competition to keep costs down. Each MTA contract receives an average of only 3.5 bids, compared to approximately 8 bids in other cities. Vendors are free to spike their costs, because they know there’s a low risk of being replaced.

Of course, the millions of dollars that vendors contribute to New York political campaigns don’t hurt either...

There is no accountability for expenses or quality when it comes to MTA contract work. Worker wages and labor conditions are negotiated between the unions and the construction companies, leaving the foxes the guard the henhouse. The city doesn’t even attempt to control costs, and they rarely (if ever) discipline contractors for falling behind schedule and over budget.

Government waste and corruption is the reason why millions of New Yorkers suffer through train delays, higher taxes, and neglected subway infrastructure.

It’s time to take a stand. The American people aren’t being heard by their representatives because the game is rigged. Government isn’t broken. It’s “fixed.”