New York's Rigged Public Works Market

Now for the bad news. In a city that lives for free market capitalism, subway construction costs are many times more expensive than they are in any other city in the world. The recently completed Second Avenue Subway took decades to build. And it cost more than anyone imagined. 

Why did it cost so much? Apparently, an unholy alliance of government regulators, environmentalists, labor unions and construction magnates saw it as their very own piggy bank. As for the quaint notion that politicians might control the cost... not a chance. apparently it did not happen.

To its credit, the New York Times reports the story. And, not for the first time. For the most part it will be ignored:

The astronomical costs of building the Second Avenue subway and other New York public transit projects are now the subject of a federal inquiry.

The Government Accountability Office said on Wednesday that it was preparing to launch a study of why transit construction is so much more expensive in the United States than in other parts of the world. Special attention is expected to be paid to New York City, where recent projects have cost far more than anticipated.

Auditors plan to examine contracting policies, station design, project routing, regulatory barriers and other elements that drive cost, comparing practices in different cities in the United States and abroad, officials said. A final report with recommendations is to be issued by the end of the year.

The study was part of the spending bill that was approved by Congress last week. And it comes three months after an investigation by The New York Times revealed how city and state public officials had stood by as a small group of politically connected labor unions, construction companies and consulting firms drove up transit construction costs and amassed large profits.

The first phase of the Second Avenue subway on the Upper East Side of Manhattan, for instance, cost $2.5 billion for each mile of track. Another project known as East Side Access, which will carry the Long Island Rail Road to Grand Central Terminal through a 3.5-mile tunnel, is on pace to cost $3.5 billion per track mile.

Elsewhere in the world, a mile of subway track typically costs $500 million or less.

It’s always good to know where our tax dollars are going.