Progressive Public-Private Partnership Profits


New York City does not lack visionaries or visionary plans with hindsight, foresight, and insight, but these visionaries lack power. Instead, “borderline criminals” continue to dim our future. America has spent trillions rebuilding Iraq and Afghanistan, but when it comes to maintaining the infrastructure of a region with a $1.4 trillion GDP, money can’t seem to be found.


Lincoln Tunnel Helix (Riel, 2015)


New York is constrained and constricted. Following Philadelphia’s lead, East Side Access should have been built as a through-running project, going through the 63rd Street Tunnel and “utopian” Roosevelt Island, and then across Midtown, through to Secaucus. This would have connected Long Island customers with the East Side, and it would also have built an ARC Tunnel and relieved congestion at Penn Station. Moreover, the 7 should have gone to Secaucus and/or the High Line (not Death Avenue), the PATH should have connected to the 6 during reconstruction (or IND 6th Avenue), and the 2nd Avenue Subway should have had express tracks.

Unfortunately, the British did not only mess up African and Asian borders, but also American borders. While no third-order enclaveCharles II decided that the border between New York and New Jersey should be the Hudson River, cutting up the global city and transportation agencies of the future. Plus, unlike London’s Underground, right in the heart of the U.K., New York City does not even control its own subways. Albany does. Talk about dropping dead when it comes to the back-and-forth of financing mass transit in America’s biggest city.


Center City Commuter Connection in Philadelphia (Riel, 2015)


New York is a sky high city with sky high costs, and there was no money for capital construction. Given that the economy is faring well now and the MTA is doing better than expected, how do we improve our regional connections for 20+ million people in the metropolitan area (MSA), which is around the same population as Australia? How do we get more funding for mass transit in our auto-oriented country?


Rapid industrialization and urbanization created chaos and congestion on America’s streets. Horse-drawn carriages were dirty and slow, riding over cobblestones and heaps of manure. Streetcars had to run slowly in order to not hit pedestrians, bicyclists, or animals. Elevated railroads would literally rise above the congestion, and hundreds of companies invested in this technology in order to make it a reality in American cities.


The Big Apple was the world capital of the 20th century arguably because no city could compete with its public-private partnership transportation network. The private, profitable trolleys and elevated railroads ruled the city, but today, it is hard to imagine that there used to be railroads connecting to the subway on Second Avenue, Third Avenue, and Ninth Avenue in Manhattan, which connected to the IRT in the Bronx and the New York, Westchester, and Boston Railway. Among the many defunct lines in Brooklyn: Fifth Avenue and Myrtle Avenue, as well as the Culver Line and the Prospect Park and Coney Island Railroad. Railroads connected the city where the track has now been sold for scrap.


Old Fifth Avenue Elevated ROW in Brooklyn at 36th-38th Street Yard (Riel, 2015)


These railroads were largely privately financed, and some were owned by developers who fueled ridership by, for instance, building hotels and resorts in Coney Island on railroad real estate. It was a building frenzy, with elevated railroads built atop surface-level railroads, being bought and sold, eventually becoming part of the BMT and much later, the MTA. While these areas are dense, built-up sections of NYC today, we must remember that, at the time, a large portion of these outer boroughs was still farmland or even woodland, and the controversial, fragile, narrowly successful consolidated City of New York was only a few years old at the time. Railroads (and later, subways) helped connect and develop the city, and today, sections of these railroads exist in pieces, and hints of the former Culver Line and Culver Shuttle remain, though it is obviously not the same as the original infrastructure.


Culver Line Coney Island Hub (Source:


Culver Line ROW at 36th-38th Street Yard (Riel, 2015)


Culver Line ROW at 36th-38th Street Yard (Riel, 2015)


Culver Line ROW at 36th-38th Street Yard (Riel, 2015)


Imagine if these structures had been maintained and improved, brought back to the glory days, akin to the iconic as Chicago’s Loop? But they were destroyed because the TA had no money for repairs, ridership was declining, and the City was bankrupt in the 1970s. Now, the city has as many subway riders as in the 1940s, with fewer track miles, and with an old system. Sure, many of these lines were made redundant by subways (i.e., 6th Avenue in Manhattan replacing the 6th Avenue Elevated or 4th Avenue in Brooklyn replacing the 5th Avenue Elevated), but many more were never replaced with subways, such as the Culver Shuttle or Second Avenue Subway. The structures were falling apart and they were negatively impacting real estate values, but surely they could have been fixed if there was any semblance of political support. Ironically, railroads built by real estate were now being destroyed partly by real estate pressure.


Baltimore and Philadelphia Streetcars (Riel, 2015)


Source: Baltimore Streetcar Museum


Buses and automobiles took over, suburban sprawl divested from the city, and the Second Avenue Subway was never built to replace the old, dilapidated elevated. The Great Depression, coupled with numerous contractual regulations (such as maintaining the 5 cent fare) spelled bankruptcy for the private operators of the subways. The city took over the subways, and eventually the MTA took over NYCT. While the city had not allowed the IRT or BMT to charge more than 5 cents, the MTA has continued to raise fares. Unlike all other American public transportation agencies, NYCT could theoretically cover operational expenses if it continues to raise fares due to the uniquely impressive ridership figures for an American city. New York is a geographically constrained, old, and dense city, fueled by transit-oriented development vis-a-vis bridges, tunnels, subways, and in the olden days, the Erie Canal. TBTA makes a surplus from tolls. Why can’t NYCT charge more? Adjusting for inflation and other bonuses, it costs less to ride the subway than it did in 1996, and New Yorkers don’t even need to own a car or pay for gas. They get a flat subway fare. Many cities charge a lot more.

How can the MTA get the funding necessary to build for the 21st century? Albany and D.C. will continue to provide, but perhaps the MTA will be more efficient if it can generate more of its own revenue. Yet the fares will probably not continue to increase, because

State and local pols ensure that the price of a subway ride falls far short of the actual cost, but refuse to make up the difference with reliable subsidies. Meanwhile, the political clout of the Transport Workers Union (TWU) ensures that that cost is outrageous, thanks to lavish labor contracts and pension benefits. So the MTA, squeezed from both the cost and the revenue sides, runs chronic operating deficits that are about to become unsustainable.

The “dysfunctional state of the MTA” has not always been the case. The profitable and glamorous IRT was a first-class railroad, with clean bathrooms, complete with soaps and towels. They wanted ridership in order to make money and they did what they could to profit. But government got in the way. Believing that transportation was a human right instead of a private good, they forced the IRT to keep a one nickel fare, even after two wars, the Great Depression, and triple-digit inflation. They also forced them to build into rural areas of the Bronx, Brooklyn, and Queens, in order to allow the poor to vacate crowded Manhattan slums. While the city helped fund these expansions, some of these routes in the Bronx literally swept across farmland. The IRT moved trains, and ideally a lot of people as well. In these peripheral areas, they were losing money. Yet the city forced them to keep the fare at a nickel, while the government built highways and sent white people sprawling into the suburbs. Ridership declined. Service deteriorated. The private operators could no longer compete. They were done.

Mayor LaGuardia bought the assets of IRT and BMT, thinking that unification would allow for greater efficiency. He did not think that subsidizing transit would work, because that would allow for “financial waste and irresponsibility”. If it is not their money, after all, they’d spend it so that they could get even more.

But he did not realize that he destroyed incentives for efficiency. Without competition, and with the increasing power of the Transport Workers Union, the subways spent more and more on labor while deteriorating at the same time. Progressives supported the TWU, one of the country’s most powerful labor blocs. Greater costs, greater public subsidies, and greater operational deficits have been the result of a lack of compromise and an anti-capitalist philosophy. Today, the MTA’s public monopoly is unsustainable and the MTA is not capable of managing the public’s money. Something has to give, but politicians know that they won’t get reelected without union support.

The MTA needs a narrative. It needs a champion. It needs partnerships with other organizations. Given the MTA’s financial woes, wouldn’t the MTA’s stations be a lot cleaner if other organizations took responsibility for cleaning them? And if they created new spaces underneath the elevated structures? In Chicago, there will soon be a light show underneath portions of the Loop!


Broadway Junction in East New York, Brooklyn (Riel, 2012)


So what about joint development? Libraries and other public agencies are allowing developers to build atop their properties, in order to get a free renovation and in order to have a generous ‘roommate’. Developers are also doing infill on public housing property, and paying for parks, such as the Brooklyn Bridge Park.

The public-private partnership opportunities for the MTA are being explored with DCP, NYCEDC, and countless developers. Air rights transfers are being discussed, and developers are also planning sites atop stations, such as SL Green at GCT, and Vornado at Penn Station. It may seem like nothing is getting done, but they’re talking about it…

And at Penn Station, Phase 1 of Moynihan Station is being built!

The Moynihan Station Project will redevelop the McKim, Mead & White designed and landmarked James A. Farley Post Office Building into the new Manhattan home for Amtrak, transforming a treasured building into an iconic railroad passenger station and mixed-use development befitting New York City.

The Project is advancing in phases, and the first phase is now under construction.

Phase 1 consists of three separate construction projects:

  • West End Concourse Expansion – This project will create access to the Penn Station tracks and platforms through the James A. Farley Post Office Building for the first time.  The new entrances at the corners of 8thAvenue and 31st and 33rd Streets will provide commuters with access to an expanded and ADA-compliant concourse underneath the Farley Building that will serve tracks 5 – 21 and serve as the commuter concourse for Moynihan Station.
  • Connecting Corridor Expansion & Rehabilitation – This project will expand and rehabilitate the underground connecting corridor between the new West End Concourse and existing Penn Station, and it will include new and reconfigured subway entrances for the A,C,E subway station that will ease passenger flow.
  • Emergency Ventilation System – This project will install a state of the art emergency ventilation system for the railroad platforms under the Farley building, increasing safety for the hundreds of thousands of passengers that use the facility each day.

In May 2012, MSDC awarded a $147,750,000 construction contract to Skanska USA Civil Northeast for the West End Concourse Expansion.

Construction on the West End Concourse Expansion began in September 2012 with the first weekend closures of individual Penn Station tracks and platforms in order to facilitate surveying, the relocation of utilities, and preliminary foundation work for the new concourse.  This type of work will continue until mid-2014 when the technically challenging steel erection phase will begin.

In September 2012, the Federal Railroad Administration awarded Moynihan Station a $30 million High Speed Rail Grant through the New York State Department of Transportation for the Connecting Corridor construction and the first portion of the new Emergency Ventilation System.  Construction on both of these projects will begin in mid-2013.

Images from Empire State Development:

1 2 3

In the outer boroughs…


Prime NYCT “Prospect Park Station” Real Estate in Brooklyn (Riel, 2015)


Myrtle-Wyckoff (L/M) Station (Google Maps)


The New York City Economic Development Corporation (EDC) is used to P3s, such as with all of the tenants at the Brooklyn Navy Yard (below), and it is also working with the MTA.


Brooklyn Navy Yard Rooftop Farm (Riel, 2015)


Of course, all of this takes time and investment analysis and it’s a lot easier said than done, especially without any analysis on my part. I know that I am just a student and that I have a lot to learn. I know that the Real Estate Department is working extremely hard to sell and develop its property. I know that the MTA has limited real estate assets; after all, they’ve carved up many mezzanines, concourses, passageways, and former track ROWs for various infill purposes, from offices to operations.


Infilling offices onto former IRT track ROW (Riel, 2015)


Yet today’s public authorities cannot even seem to share the spoils of the chopped and disfigured cavern of Penn Station in New York. One cannot take a train (without needing to transfer at Penn Station) from Long Island to the Meadowlands, the Prudential Center, or EWR in New Jersey, or from Newark to JFK or Citi Field and the US Open in Queens. Unlike SEPTA, which has connected its terminals in order to have through-running, New York has multiple agencies and they cannot cooperate. Money and politics keep the agencies siloed. While Governor Cuomo and Christie share the Port Authority, Cuomo would not want to share the MTA and Christie would not want to share NJT. As a result, the NYC Subway does not go to Hudson County, and the PATH does not connect with the NYC Subway. There is not even a free transfer. Even worse, NJT and LIRR terminate at Penn Station. This is emblematic of a larger problem: our leaders are not serious about transit.


If I became the Great Khan, I would merge the PA and NJT with the MTA, and I would get NYC to annex the counties in the metropolitan region in NJ, CT, and Long Island, and then secede from Albany, Trenton, and Hartford to form the Big Apple State. Consolidation of Dutch and later, English towns has happened before in order to form NYC, and it could happen in the future. With one, unified metropolitan transportation authority, the MTA could begin to aggressively transform into a real estate developer, without interference from Albany, Trenton, or Hartford. The metropolitan region would be one state, raking in approximately $1.4 trillion in GDP, ranking first nationally by a wide margin, and “behind the GDP of only eleven nations”. And it would explore congestion pricing and urban growth boundaries, having been permitted to do so by the Big Apple State’s capital, in NYC.

(The urban growth boundary in Portland, OR., required state permission, too. Portland is a liberal city surrounded by rich farmland and a beautiful countryside. Farmers did not want sprawl, and urban leaders also recognized the importance of creating an urban growth boundary and T.O.D. Nearby mountains made it easy to visualize urban growth, unlike, say, in Texan cities).


The reason why these agencies have not been cooperating? Politics. State boundaries would not matter for private, profitable railroads; after all, through-running was originally practiced at Penn Station by Pennsylvania Railroad before politicians chopped up the remnants of Penn Central Railroad. Moreover, the IRT, BMT, and Hudson & Manhattan Railroad (today’s PATH) operated profitable, competitive subway companies, responsible to shareholders. Today, most of these lines would not be profitable by themselves, because airports and highways have diverted business, and because the MTA has excessively high labor costs and 100-year-old maintenance needs. Plus, suburban sprawl decreases density, thereby decreasing ridership. So we are left with sorting out politics in order to fix our connectivity.


Hudson and Manhattan Railroad (H&M Annual Reports)


IRT, BMT, IND Ridership Visualization


New York’s harbor made it an ideal global city, but its infrastructure connected and consolidated it. From the Brooklyn Bridge and the subways to the water tunnels, the benefits of pooling resources to physically connect trumped partisan concerns of taxation and demographic paranoia. When the subways were first built, the consolidated city was only a few years old, but the City mandated that the IRT and BMT extend outwards in order to develop the outer boroughs and alleviate the crowded, unsanitary conditions of Lower Manhattan’s slums. (Many in Brooklyn were originally worried that they would have to pay higher taxes for Manhattan’s projects, and that Catholics would change the fabric of their Protestant city…).

(These “sixth boroughs” – such as Bergen, Jersey City, and Hoboken in Hudson County, New Jersey, were actually originally part of New Amsterdam during the Dutch colonial area. Now, New Jersey’s Hudson Waterfront is so close yet so far, because the PATH is not connected to NYCT).

In the Big Apple State, the MTA, NJT, and Port Authority are not private companies, but they still do not want to share riders and fares. A PATH commuter needs to pay again in order to get on New York City Transit. If they would be combined, it would be easier to accomplish countless goals. If the Hudson Tubes need to be replaced, they could be reconstructed alongside a route for the 7 Line (akin to the 63rd Street Tunnel, which has F Line and LIRR East Side Access tracks). These regional rail tracks will go to Secaucus Junction alongside the 7 Line, acting as a local, and then a new bus terminal could replace the existing terminal atop Secaucus Junction. Secaucus has quick access to highways, and buses can terminate there in order to decrease congestion in the Lincoln Tunnel and in Midtown. This would knock out two (three) birds with one stone. Offices and apartments could also be built atop and nearby Secaucus Junction, and the real estate revenue would be a boon for the agency. In fact, a skyscraper atop Secaucus Junction was originally planned, but the recession knocked this idea down; however, some TOD has been built. Since the MTA, NJT, and Port Authority are not combined, this project is difficult to plan.

Other projects that are difficult to plan? Too many to describe. The AirTrain to JFK should have gone from Penn Station to LGA via Sunnyside, and then to JFK via the LIRR’s abandoned Rockaway Beach Branch.


AirTrain JFK (Riel, 2015)


Cuomo and Christie do not want to share legacy projects. The federal government does not want to help pay Amtrak (or for anything else), and New York and New Jersey do not want to share costs. Cuomo is correct that the Hudson Tubes are not “his tunnels” but he does not realize that the repercussions from clogging the Northeast Corridor will impact his tunnels and his economy, too. It will mean more automobile congestion in the City, and it will mean delays along the entire NEC, reverberating throughout New York State. Plus, in 2011, “New Jersey residents paid nearly $3 billion in income taxes to New York State”, which was “8 percent of New York State’s entire personal income tax levy”; in fact, “New Jersey residents were responsible for more of New York’s personal income tax than the residents of all but three New York counties: Manhattan, Nassau and Westchester” (via Dana Rubinstein @ Capital New York).


City Lab Source:


Regional planning has always been exceptionally challenging in the United States. It is a country with a grand diversity of regional values, founded by Jeffersonian ideals that granted more power to states than to cities. There are cultural regions, political regions, commuting regions, environmental regions, and so on and so forth. Watersheds may not match up entirely with ecoregions due to varying elevations and soils. Commuting regions definitely don’t always align with political regions.

In the New York commuting region, the Tri-State Regional Planning Commission ceased to function decades ago, with MPOs broken down into NY, NJ, and CT organizations, such as NYMTC for New York State. Without strong regional planning efforts, cities can promote density while nearby suburbs promote sprawl. Suburbanization had been the 20th century’s answer to urban congestion and chaos, and automobiles had allowed for separation to be efficiently designed and developed.

If the MTA does not have the tools to develop property, but it also lacks funding, perhaps a privatized development division of the MTA could be established. It would have to be entirely self-sufficient, and it would also have to provide the MTA will a stable source of revenue from leases or it will be shut down. This model would be the MTA’s response to the City’s Economic Development Corporation, which manages many of the City’s assets. In fact, governments across the world have set up independent entities to manage their wealth, such as Singapore’s government-owned holding company, Temasek, incorporated in 1974. By 2014, Temasek’s portfolio grew “to more than $75 billion”, while “across the globe, more than 20 national wealth funds manage more than $1 trillion in assets”. Yet it is estimated that governments across the world have approximately $75 trillion in commercial assets, and most of this remains mismanaged. The MTA is no exception, and neither is the Northeast Corridor and Amtrak. But they can change, if they are given the resources to build, build, build.



East River Ferry to Dense Midtown (Riel, 2015)


In order to have more of this…

Electric Bus in Quebec City, Canada (Riel, 2013)

Light Rail Redevelopment in Washington, D.C. (Riel, 2015)

Bus Lane in Columbus, Ohio (Riel, 2015)

Embarcadero Biking in San Francisco (Riel, 2015)

Biking in Washington, D.C. (Riel, 2015)


Instead of more sprawl…

Sprawl in Nashville, TN (Riel, 2012)

Road Diet Opportunities in Nashville (Riel, 2012)

Suburban Dayton, OH (Riel, 2015)

Typical Suburbia in West Virginia (Riel, 2013)

T.O.D. Potential in Town in West Virginia (Riel, 2013)


Arthur Nelson’s Foundations of Real Estate Development Financing: A Guide to Public-Private Partnerships elucidates the importance of public-private partnerships.

America’s future depends on public-private partnerships to facilitate redevelopment. Even though redevelopment generates higher rates of investment return to investors, numerous obstacles have to be overcome. Some of these involve changing planning and development codes to be more responsive to redevelopment opportunities. Others are expensive in the near term because infrastructure has to be upgraded – though it would probably have to be upgraded eventually anyway. Many involve land assembly brownfield remediation. Still others are related to the complexity of modern real estate financing, especially when it involves multiple land uses (Nelson 2014, 4).

Public-private partnerships, or P3s, are contractual relationships between public and private entities to facilitate real estate development. They can include the repurposing of existing real estate development through rehabilitation to change an original function, such as converting warehouses into residential lofts. It can also include the removal of existing structures, land assembly, infrastructure upgrades, and related activities to redevelop areas and sites. There are many forms of P3s, most of which engage the private sector in building, operating, maintaining, or owning and leasing back facilities to the public or nonprofit sectors (Nelson 2014, 5).

Each party contributes to the partnership what it does best. For the public sector, this can include planning and zoning activities that can recast the overall development vision of the area, upgrading infrastructure, expanding mobility options through sidewalks, bikeways, road improvements, and transit, as well as acquiring property and preparing it for redevelopment and assisting with financing. For the private sector, it can include market analysis, construction financing, construction management, procurement of long-term financing, and project leasing, as well as property management (Nelson 2014, 5).

According to a thesis written by Joseph Monty at my school, Tufts University, a P3 was necessary in order to manage the Massachusetts Bay Transportation Authority (MBTA)’s real estate assets. The internal department had to maintain the tenant ledger, collect rents, negotiate lease agreements, sell surplus properties, and respond to requests from developers. The T did not have the necessary resources, expertise, or profit motive in order to conduct these processes, so it contracted Transit Realty Associates (TRA), a consortium of firms, in order to outsource the T’s real estate division. Firms included: AW Perry, specializing in ownership, management and permitting; K.C. Donnelley and Company, specializing in brokerage; The Development Group, specializing in public property development and financing; and, Antrum Management, an engineering firm specializing in parking garages. According to Buzz Constable, a principal at TRA, the TRA had to organize hundreds of lease agreements, many of which dated back to the early 1900s, and were not cataloged at all. 80 percent of the T’s leased assets were non-performing; indeed, the T did not even have the time to collect rent or update property agreements, one of which dated to 1910. The TRA instituted market procedures and marketed properties for new lease opportunities, allowing for the MBTA to receive, from $3.5M per year in 1996, to $14M per year in 2014. The TRA also succeeded in creating a Land Tracker system with GIS, allowing for the organization of the authority’s portfolio. The GIS based system catalogs basic information including location, size, assessed value, rail line and station, use, zoning restrictions and environmental information.

Monty also writes that there are ample risks and ample rewards in a P3. For the public sector, perceived or real conflicts of interest, alongside a fear of the misuse of funds and resources, are compounded by land use conflicts (such as dislocation, relocation, or fair market value disagreements), public opposition, and worries that the private partner may fail. Meanwhile, the private sector is often concerned about excessive costs, time-consuming regulations, and accusations from the public; moreover, concerns that changes in key public or political leadership will derail partnerships are often concerns, alongside fears of market failures. Yet there are also plenty of rewards. For the public sector, of course, a P3 can provide for economic development, increased tax revenue, and improved public infrastructure and quality of life, whilst creating jobs and advancing the city’s image; perhaps, politicians would also be reelected due to their performance. For the private sector, a public partnership allows for resources to sustain their organization, and hopefully, the P3 is profitable, creating value, whilst enhancing their reputation and building their market niche.

According to Matti Siemiatycki in the Journal of Planning Education and Research, the public sector can alleviate most of its concerns by following five rules: first, establishing a jurisdictional constitution; second, separating the analysis, evaluation, administration, and oversight agencies; third, ensuring that the bidding process is competitive; fourth, maintain caution, especially for projects with long life cycles, due to contract renegotiation concerns; and fifth, avoid stand-alone private sector shells with limited equity. All of these rules are essentially about effective communication and trust, which can be aided by transparency. This commits partners to the project terms, be it private partners that would otherwise seek to limit their responsibilities, or public partners that would otherwise waver under political pressure.

In order to begin the joint development process, a financial feasibility analysis would need to be conducted. This would include the cost of decking and the land value based upon existing physical, demographic, and market conditions for relevant properties and parcels. It would also include relevant zoning, land use, and air rights laws, resolutions, and amendments. A development scenario would also need to be designed, showing the placement of buildings, amenities, entrances, ventilation, clearance, and circulation; access, egress, traffic, parking, terrain, and environmental review processes would intersect these scenarios. The concept and site selection would also be coupled by site assembly, site planning, and an organization of the management structure. A marketing strategy would also need to be implemented, and demand generators – factors such as renters, buyers, anchor stores, trade areas, market capture, and foot traffic – would need to be calculated based on market demand. Advocates, facilitators, lenders, owners, users, realtors, managers, tenants, architects, contractors, and brokers would all need to be involved with the transportation authority in order to produce the best program and form, full of flexibility, activity, and density. They would need to find the gross, find the net, find the cash flow, find the tax credits, find the appraised values, and find the assessed values. They would need to deal with permits, retail space, community space, open space, financial structuring, incentives, risks, rents, and leasing, as well as the hard costs, soft costs, fees, equity, and debt service. Then, there’s mortgages, loans, and operating expenses. No wonder there are so many professionals involved in the development process. And when it involves a public agency, with limited expertise and resources, P3s clearly become paramount.


Born and bred in Brooklyn, my name is Rayn Riel, and I’m a Senior Editor at PlaNYourCity. I’ve circumnavigated the world twice in order to research transportation finance and joint (real estate) development practices in 30+ countries and 25+ U.S. states. I’m a graduate student at Tufts University and I’ve designed Tufts’ only undergraduate urban planning degree, I’ve founded Tufts only undergraduate urban planning student group, and I’ve also been working as a GIS Lab Assistant. Having interned at the NYC Department of City Planning for the past two summers, I interned at MTA NYC Transit and at the MTA HQ Real Estate Department this summer. I will graduate with a B.A. and M.A. in Urban Policy and Planning in May 2016. I intend to become a “Riel Estate” professional.
Comments or opinions expressed on this blog are those of the author only. The views expressed on this blog do not necessarily represent the views of the MTA, its management, or employees, and absolutely no confidential information was disclosed. 

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46 Comments on “Progressive Public-Private Partnership Profits”

  1. Rayn Riel December 27, 2015 at 12:36 am #

    RE: “Big Apple State”


  2. RR January 19, 2016 at 8:13 pm #


  3. Rayn Riel January 26, 2016 at 3:43 pm #


  4. bb June 2, 2016 at 11:02 pm #

    A P3
    Route B110
    This route is operated by Private Transportation Corporation under a franchise with the City of New York, and is the lone unsubsidized route operating in Brooklyn. MetroCard is not accepted for payment of fare on this line, which has a one-way exact change fare of US$3.25.

    In October 2011, the B110 was reported in several New York newspapers to have signs requiring female passengers to sit in the back to avoid possible contact with men, as is considered necessary by some Hassidic Jewish groups in the area it serves.[57][58][59][60] The story was reported internationally.[61][62][63][64] On October 20, the New York City Department of Transportation said it would shut down the line if the gender separation was not discontinued,[65] but six days later, Private Transportation Corporation agreed to end this practice.[66]

    Currently, Private Transportation Corp. no longer enforces the Hasidic custom that men and women sit apart in social situations. But still most Hasidic men and women riders choose to sit apart each other and do not complain about segregation


    • Solaris November 4, 2016 at 2:28 pm #


  5. Mark June 22, 2016 at 11:19 pm #


  6. Fred June 27, 2016 at 2:07 pm #

    Els were also destroyed because the City had massive debt from building the IND
    And the City planned to replace the els with IND subways.
    But, many never replaced with subways (third av, second av in manhattan), just with lousy articulated buses… even SBS, has its own lane, but not enforced, not in center of road, so turning vehicles/parked cars delay it… it is level boarding which speeds up and proof of payment though so can enter from all doors. But… with a new fare card, hopefully will be more efficient cus no need to pre-pay on street machines, just tap on/off on the bus at all doors.

    along Fulton Street in Brooklyn. The subway there was extended further along Pitkin and then went above ground, recapturing the elevated line for city service. This elevated structure was built to subway standards so it would eventually support the long, heavy subway cars, but many Els supported only a few cars, and would have needed to be reinforced to support subways. (Notice the Myrtle Av/Lexington Av el in Brooklyn, that was not built to subway standards and was torn down; the section for the M line today was reinforced for the subway). I do love this map though, done before the Verazano bridge, done before the BoT, NYCTA, and MTA existed, before the MTA Staten Island Railway…. We had the fifth av el in brooklyn, the culver line too, because not yet a connection between church/ditmas on today’s F. City hadn’t yet taken over the RR in the Bronx for the 5, or LIRR to rockaway, or built 6 ave line, or roosevelt island tunnel, or connected BMT/IND along Manhattan/Williamsburg bridge, in Queens to queens Blvd line and to Jamaica, etc… Very few transfer stations… (no BMT/IND at Jay yet, or IND/IRT at B’way Laf, or fulton center, atlantic, etc… etc… )… the world’s fair line, only IND line to end up being demolished… Map does not include gowanus canal or rockaways because subway hadn’t gone to rockaways yet/taken LIRR RR like it had for the BMT RRs to Coney Island… Still includes els along Brooklyn bridge, ninth, third, second El in manhattan… ah!!! not yet WTC, WFC…

    And the franklin ave shuttle, only a few decades ago was the site of the city’s deadliest subway crash — train going too fast down a new curve, bad coupling, no motorman experience due to a strike — and boom…



    • Hank August 8, 2016 at 1:15 pm #

      Many were never connected to the pre-existing El network, and were built to subway weight standards from the start.
      Only the suriving sections of the BMT Eastern divison (the Myrtle line between Myrtle-Broadway and Myrtle-Wyckoff, the Jamaica/Broadway Brooklyn, and the Canarsie) are fully repurposed “EL” els, that is structure in use from the pre subway era, rebuilt and re-enforced for subway trains.

      Every other existing El line is “Dual Contracts” era construction, built to subway standards, hence “Subway Els.” The Flushing, Astoria, West End and Culver lines, The Myrtle line north of Wyckoff, the elevated section of the Brighton line and the A in Queens over Liberty ave. Most of these opened between 1915 and 1920. They were mostly built as such due to costs The four Coney Island routes replaced lines that before had operated at grade after leaving the built up sections of Brooklyn (IE, south of modern 40th street). From 1906 to 1915, the Myrtle trains did the same leaving Myrtle-Wyckoff. Seneca, Forest, and Fresh Pond were ground level stations, and Metropolitan ave station was a few dozen yards east of where the current one is, moved to facilitate the construction of the New York Connecting Railroad. The Elevated section of the A above Liberty Ave was opened in 1915, an extenstion from “City Line” area of Brooklyn, where the line had terminated. This line still exists because of what was known as “Recapturing”. The City had the right to take any section of what it had built for the private companies under their contracts to use for it’s own purposes. If you look at old “IND second system maps”, many propose this take over, and it’s one of the few second system ideas to become reailty.
      The els would probably have become over time (and especially starting in the 1980s or so) a very big tourist attraction and the (MTA) would likely have promoted the els as a way for tourists to see NYC without the traffic hassle. You might have even on weekends started to see special “culture loop” type lines that would run along different els designed specifically for tourists to sightsee around Manhattan.

      The L is many things, but Chicagoans have been trying to get rid of at least the central sections of their L network for years. The Red and Blue Line subways were built to relieve congestion and to allow for eventual replacement of the Loop, and there have been various proposals to replace the Loop with a subway. In fact, as recently as 1997, Chicago closed down a section of its Green Line due to community pressure. So it’s not like they like their L.

      Chicago’s Els also tend to be built over alleyways instead of city streets, which is significantly less disruptive than New York’s Els.

      REBNY and its predecessors lobbied for decades to have the El torn down, because they were a blight on neighborhoods – they were noisy and blocked sunlight. No rehab would have changed any of that. Again, most construction happened after the El was demolished, because now there was no blight there. You didn’t see this same regeneration by the elevated sections of the MNRR or the (1). Els have always been considered blights in the city, and unless trains become whisper quiet and we invent transparent viaducts, that is not going to change.


    • Alvin August 21, 2016 at 3:33 pm #

      more expensive to build subway


    • Eiona October 4, 2016 at 5:56 pm #

      Our rail network used to be a lot more extensive. Railroads were all over the place! On the streets themselves, or elevated… In Brooklyn, BMT had many elevated routes; on 5th Avenue, 3rd Avenue, Myrtle, Fulton, etc, all going towards Brooklyn Bridge and Downtown. They went over the bridge to the Park Row Terminal, the only non-IRT elevated station in Manhattan.

      But as new bridges and subways arrived, ridership gradually declined. The 4th Avenue Subway got rid of the need for the 5th Avenue El, BMT Broadway subway, etc… rendered service obsolete. And the els were so old by then, City did not have the money to reinforce them for subway train weight, or fix them. Only some elevated lines remain, like the BMT Fulton elevated, towards Queens on the A, the rest of it was chopped down when they built the subway. If they could not build a subway nearby (like IND 6th Ave in Manhattan which allowed IRT 6th Ave elevated to be demolished), then they often kept the elevated… like in outer boroughs, where there was less density or NIMBY real estate pressure to demolish the els and get rid of all the noise and lack of sunlight. not as many NIMBYists in outer boroughs with strong real estate pressures.

      On that map, you can see that Ebbets Field is still around! But, systems still not connected. No Chrystie Connection or connection in Queens to IND Queens Boulevard from BMT.

      I suppose the els are still up in Chicago because its a really important infrastructure link still. In NY, the subways were built to relieve the els… 8th Ave IND relieved 9th Ave IRT, 6th Ave IND relieved 6th Ave IRT, BMT 4th Ave Subway relieved BMT 5th Ave el, etc. And there are still some els where they could do that. Maybe they should not have town down IRT 2nd or 3rd Ave in Manhattan, since they never finished the 2nd Avenue Subway. Plus that is how the 7 was once connected with the rest of the IRT network, thru Queensboro Bridge to IRT elevated, which then connected in the Bronx to the subways (the White Plains Line; 9th Ave IRT went to Jermone line). Or maybe they should not have town down the Culver Shuttle. They used some of the scrap from these els for new projects.

      Yet, these were old, historical structures, dating back to mid 1800s. They were very old and outdated, crumbling, could only handle 5 or so cars, not 10 (like chicago today), and they ran very slowly because there wasn’t a signal system… just line of sight. I suppose though since there was no signal system, they could fit more trains.

      Eventually the IRT owned all of these elevated railroads and they were electrified. They had 3 tracks and could run express. They were amazing at the time that they were built. They had huge timbers along the sides of the rails to prevent trains from falling off. And it was just line of sight.

      The Queensboro Bridge once had elevated RR like the Brooklyn Bridge. It also had an elevator to “Welfare Island”, now Roosevelt Island, before the tram existed.

      The tram is operated by LPOA (Leitner-Poma of America) on behalf of the Roosevelt Island Operating Corporation of the State of New York, a state public benefit corporation created in 1984 to run services on the island.

      The Cobble Hill Tunnel (popularly the Atlantic Avenue Tunnel) of the Long Island Rail Road (LIRR) is an abandoned railroad tunnel beneath Atlantic Avenue in downtown Brooklyn, New York City. When open, it ran for about 2,517 feet (767 m) between Columbia Street and Boerum Place.[citation needed] It is the oldest railway tunnel beneath a city street in North America that was fully devoted to rail.[2][3][4]

      So much history! And NYC inspired the world. The Hell Gate Bridge inspired the Sydney Harbor Bridge and all of Sydney’s underground commuter railroad system, which was built once it was electrified. Unfortunately American cities don’t have a lot of underground railroad, in Boston, North and South Station are separated and the NEC is not connected to points further North in Maine, NH, Vermont… It would need a tunnel, electrified, and hybrid locomotives if they don’t want to electrify the rest of the railroads.

      Funnily, when they demolished the elevateds, it spurred development! The opposite of TOD!,_Bronx

      Sea Beach’s Buckeye Pipeline, where fuel for JFK planes goes through:


    • Yuni October 9, 2016 at 4:43 pm #

      Neighborhoods that change the quickest are by the subways. Or, I suppose, highways. The Gowanus Expressway in NYC destroyed the street below. They widened it, got rid of the light, divided the neighborhood. Same with elevated RRs. By the 30s, there was so much opposition to these cheap steel structures, they were so loud, that the IND did not build any elevated sections. The PA built the AirTrain today along a highway with concrete, so it wasn’t as noisy. The IND even built without cut/cover along some sections to avoid disturbing residents, like the express tracks under Prospect Park that take a more direct route. The IND’s only elevated section is the Gowanus bridge, built because it was cheaper than tunneling under the canal. And this was cement, with a complete track bed and even cement walls to keep the noise from bothering people.

      Over all, at first, it was cheaper to build elevateds in outer boroughs. Contracts forced a nickel fare and for companies to build into outer boros, to decongest Manhattan as a public health effort. It was cheap enough for the masses and at the time, a lot of these elevateds were built over farmland, definitely cheap to build, without much opposition. Whereas, elevateds were torn down in Manhattan, and you can see the result, the opposite of TOD – tall residential buildings built along, say, 3rd or 2nd avenue in the 50s after the els were torn down.

      Back then, we were poorer, but we had the political will and organization, rule of law, unlike poor and unstable countries. Now we are building deep underground with tunnel boring machines, so who knows why it is so expensive. Lack of political will to cut costs? labor unions? environmental regulations? back then, private companies were building the RRs, so they had more incentives to be efficient, perhaps.


      • sas January 8, 2017 at 10:01 pm #

        IRT built cement elevated along Queens Blvd for the 7. All the snow and trash gets stuck up there. And NYCDOT parking below.

        why not turn it into a plaza, working with MTA? or make it more accessible? widen the sidewalks? like on broadway at bowling green:

        By the 1930s, NY was tired of elevateds and their noise, taking light from the streets… Subways were originally designed as a partnership between operating companies and the city, which wanted them underground, to promote real estate and have less congestion, more light, air, and have stairs closer to the surface (faster commutes) than if they were elevated… But, the outer boroughs were still largely undeveloped in the 1900s, and the subways were so cheap to build back then not only because of fewer environmental and labor regulations, but because there were no NIMBYists to keep them from building day in and day out, on cheap elevated structures in the suburbs… there were no people living in those places!

        (Queens Boulevard was built fancy with concrete, for real estate interests, but that meant snow/garbage did not fall through the tracks…)

        An advantage of building underground is not having to deal with snow/rain, but that wasn’t why it was built underground… after all, outer boroughs built elevateds and the weather wasn’t different there! it’s more politics/real estate… and subways were closer to the surface than els… In outer boroughs, people were less powerful, less powerful real estate interests/connections, so subway above ground, telephone poles above ground, etc. contracts, partnerships… there is less money to be made out there, less money given to politicians, campaign connections, money money…

        The dual contracts would later reinforce some old elevated railroads, for subway specifications, while the IND would build subways over the 4 boroughs in order to recapture some els… on the J/Z, the oldest subway station still being used today! (elevated)

        (they also built a cement viaduct over the Ocean Parkway stop of today’s Q… Ocean Parkway was a wide and beautiful street, coney island was a beautiful place too, so they wanted it to look nice.)


  7. George July 13, 2016 at 7:07 pm #

    MTA’s lawyers are not paid enough to craft a good P3 contract


  8. Fred July 15, 2016 at 9:10 pm #

    It is very hard to craft a good P3.

    it’s not just our region that can’t seem to coordinate. (as you write, the mta has problems coordinating within itself, all the bureaucracy and paperwork processing… the unions, management… then, coordinating with city, state, other states, municipalities, PA, NJT, conndot… ) but all around the world. european security is terrible, they can’t coordinate/share either. you can get into the EU schengen zone from Brazil via French Guiana (quite a nice deal for those south american european citizens, oppressed for hundreds of years, with indian and chinese ‘paid’ laborers and gloom…).

    clearly in the EU they don’t TRUST each other. and there are political games at all levels. jobs, positions, titles, goals, internal/external, motivations… it’s just a matter of time unfortunately and scarily when some terror attack hits our subways. maybe that’s why they don’t reopen the gimbels passageway, add some retail/ads, and decongest the streets from penn/8th avenue to 42nd/bryant park. because these can become death corridors… if the mta can’t run a train right, or get basic IT right, imagine how bad their security procedures are… and how much they’re lying about how bad things are!

    but over all, lucky to be in the US, a beacon of relative stability. and NYC, clearly center of public transit in the USA. We grew richer due to increased productivity, due to capitalism. Private property rights, political stability, and infrastructure, among other factors, are of course also important.


  9. Al July 17, 2016 at 10:39 am #

    Geography, weather, water, resources, chemistry, biology, physics, everything comes together.

    Thus while Athens is certainly not today’s Silicon Valley, ancient Athens was once the world’s talent magnet. Despite having a small population, Western civilization is a result of that city’s thinkers, as they produced democracy, science, philosophy, contracts, taxes, writing, schools. In the 24 years between war, they flourished in public opulence, with most Greeks socializing in the commons, creating a grand civic life and sharing ideas. (Today, many stations on the Athens Metro are decorated by artifacts found during construction).


  10. Bobby July 17, 2016 at 1:42 pm #

    don’t forget access-a-ride contractors in MTA vehicles

    and don’t forget USDOT, NYSDOT… all help with our roads… NYSDOT and NYCDOT both maintain FDR, etc.

    and the states own and operate the interstates. “state rights”

    also, all the p3s rebuilding laguardia, so complex. now they’re doing a temporary parking lot. contractors are parking on residential streets. but at least the airlines are paying for most of this.

    and finally – nyc dual contracts PROHIBITED advertising and retail! to keep station environment “clean”. but now, so many ads everywhere – good. our bus shelters are paid for by contractors from the ads, our citi bike is self-sufficient, even linkNYC is paid for by ads.


    • Jink October 3, 2016 at 5:09 pm #

      It is hard to coordinate! Even among the police. NYPD, PA Police, MTA Police, Transit Bureau, NYCT Dept of Security etc.. But it’s important.

      It’s also important to analyze subway issues. You can see what cars are involved, crews, delay types, dispatcher and superintendent information, incident information, intervals, terminal arrivals and departures, dates and times, locations, lines, directions, number of delays, all together, in order to find patterns… i.e., patterns based on time, location, delay type, etc.


  11. 7linearmyny July 27, 2016 at 8:31 pm #

    more p3s – wifi plug areas, linknyc. and citibike. both good p3s, self-sufficient. maybe we should put ads on our street lamps too! and scaffolding!


  12. Yoyo July 29, 2016 at 4:04 pm #

    I’ve always opposed the proposal to convert the Rockaway Beach Branch of the Long Island Railroad into a bike trail, because I think the land is too valuable as a rapid transit corridor to use for anything else. Trail advocates protest that they too are in favor of transit, and they wish we could bring transit back to the corridor, but gee, sadly the MTA is just not interested.

    Not only was the MTA not interested, according to the trail pushers, but it was a waste of time to get them interested. Nobody in the area wants a train. The selfish NIMBYs would block any attempt by the MTA to rebuild the rails, and the parents whose kids use the ballfields “on” (actually near) the line would howl. The line will never be reactivated. But the NIMBYs wouldn’t oppose a park!

    A few times they almost had me convinced. Against the power that has now arisen there is no victory, they whispered. Why not make the best of it? Have a nice rail trail. It’ll close at dark, but in the wintertime we’ll try to keep it open “slightly later” in case you’re trying to ride home from work. You like the South County Trailway, don’t you? It’s not so bad!

    So here it is a few years later, and it turns out that a lot of the NIMBYs have opposed a park. There are people in the area who are in favor of bringing the trains back. And the MTA is doing a study of reactivating train service! The bike trail advocates (who were really transit advocates that had given up hope, you remember) must be overjoyed!

    Turns out that – surprise! – the bike trail advocates, now paid by the Governor and park-oriented nonprofits, are against reactivating the rails, and they’re repeating all the NIMBY arguments. The most bizarre one I’ve seen is that the noise of passing trains would distract students at three schools at the Metropolitan Avenue Campus. This is complete nonsense: my kid went to school for six years across the street from the noisy 7 train el and doesn’t remember ever being distracted by it, and the Rockaway Branch would have brand-new rails on an embankment. But as LLQBTT pointed out on Twitter, the presence of these schools is actually a point in favor of reactivating train service. Wouldn’t an Expeditionary Learning School be much better if the Expeditions could be taken by train? Wouldn’t it be better if kids could take the train to Little league practices instead of being driven by their parents?

    The bike path advocates are also making up new, ostensibly pro-transit, arguments that don’t make sense to anyone who actually does transit advocacy. How many riders would we really expect to take the new Rockaway Beach Branch train to Kennedy Airport instead of the AirTrain, and why do we care? They indulge and amplify the fears of a handful of Rockaway residents that Rockaway Branch trains would “end the A train.” And if they believe that it would “cause slowing of trains” on the LIRR main line, why not support finishing the partly-built connection to the Queens Boulevard subway, as described by Capt. Subway?

    The worst of all the arguments against bringing back the trains a legal one: that a section of the right-of-way was transferred to Forest Park, and that restoring the trains would constitute “alienation of parkland.” This is absolute hogwash. New York City parks are criss-crossed with transportation corridors, some of which are genuinely oppressive, destructive and deadly, and the City has not to my knowledge raised any legal objections. The Jackie Robinson Parkway – its name an insult to the athlete – has a much bigger negative impact on Forest Park than the Rockaway Beach Branch ever will. It would actually make a great busway and bike path, opening up the park to residents of some of the poorest Brooklyn neighborhoods, but the Trust for Public Land has shown no interest in it.

    More than anything else, these statements by the bike trail advocates have given proof to my hunch that they are not in favor of transit, that they think a bike path is more important than anything, and that they are willing to lie through their teeth in order to get one.


  13. Alex August 6, 2016 at 1:18 pm #

    Here is a great P3 example.–press/display-news/?nid=wyQUcHXL

    A group led by Swedish construction company Skanska AB and a Vancouver-based airport operator were selected to help finance, build and manage a $3.6 billion replacement for LaGuardia Airport’s 50-year-old central terminal.

    The Port Authority of New York & New Jersey, which operates the three major New York City-area airports, made the selection almost two years after soliciting bids. The plans for LaGuardia, likened by Vice President Joe Biden to a facility in a third-world country, call for a new 35-gate terminal with more restaurants and lounges, stores, bigger gate areas and improved passenger and baggage screening.

    LaGuardia Airport, in the borough of Queens, is consistently ranked among the worst in the U.S. in cleanliness, design and delays. In 2014, Governor Andrew Cuomo called LaGuardia’s ranking a “disgrace” and vowed to redevelop it and John F. Kennedy International.

    “For too long, LaGuardia has been the stepchild of our region’s airports compared to JFK and Newark International,” Port Authority Vice Chairman Scott Rechler said in a statement.

    Stockholm-based Skanska, Vancouver airport operator Vantage Airport Group Ltd., and Meridiam, a French infrastructure investment firm, are among 12 members of a consortium that will rebuild the central terminal, known as Terminal B. Current tenants include United Airlines, American Airlines and Southwest Airlines.

    Decision Applauded

    The Port Authority’s decision was delayed by a design competition announced by Cuomo last October that added months to the process. A panel advising Cuomo recommended that the reconstruction include a central “Great Hall” to serve as LaGuardia’s primary entry, a hotel with 100 to 200 rooms and an automated people-mover. It also recommended an AirTrain connection to the subway, improved roads and adequate parking.

    Cuomo in a statement applauded the decision, saying the Port Authority’s initial ideas were short-sighted. Now, the plans call for redevelopment of the entire airport, guided by a “master plan.”

    “My directive was not to rebuild what was but imagine and build what should be,” Cuomo said. “New York deserves the best.”

    The Port Authority’s board authorized the agency to negotiate the design of the central hall with the Skanska group. The entrance, which will connect terminals B and C, will cost as much as $400 million, bringing the project’s cost to $4 billion.

    Port Authority Executive Director Patrick Foye said the added expense was justified because the agency’s three airports support thousands of jobs and generate hundreds of millions in revenue. He said the hall would generate additional money.

    “We think it’s a prudent investment,” Foye said.

    Funding Breakdown

    The Port Authority has said it also needs to find as much as $10 billion to replace its obsolete bus terminal in Manhattan. It also supports the construction of a new Hudson River rail tunnel, which may cost $20 billion.

    The Skanska consortium will contribute $200 million and issue $2 billion of bonds backed by revenue generated by the airport, said Foye. The transit agency is contributing as much as $1.5 billion from fees assessed to passengers.

    Construction is projected to start in the first quarter of 2016 and proceed in stages. By using a public-private partnership, the Port Authority will be able to complete the project five to six months sooner, and will cause less disruption to airlines, said Foye. The consortium, which will negotiate leases with the airlines, is responsible for cost overruns.
    Built in 1964, with a capacity of 8 million annual air passengers, the central terminal is expected to serve 17.5 million passengers annually by 2030, according to the Port Authority. Delta Air Lines Inc., which is the busiest carrier at LaGuardia, has its own terminal.

    In 2012, Travel & Leisure ranked LaGuardia the worst for cleanliness, design, baggage handling, and check-in and security processes.

    In February 2014, while in Philadelphia, Biden said that if he blind-folded someone and took them to the airport in Hong Kong, they’d think they were in the U.S.

    “If I took them blindfolded and took them to LaGuardia Airport in New York, he would be like, ‘I must be in some third-world country.’ I’m not joking.”

    Skanska reaches financial close on LaGuardia project in New York, USA, worth USD 2.8 billion

    Skanska has, as a member of LaGuardia Gateway Partners, reached financial close and executed a lease agreement with the Port Authority of New York and New Jersey (PANYNJ). The Public Private Partnership (PPP) includes finance, design, construction, operation and maintenance of the LaGuardia Airport Central Terminal B in New York City, USA, with a lease term through 2050. The agreement also includes construction work for supporting infrastructure and a new central entrance hall.

    The contract is the biggest ever for Skanska. The value of the design/build contract amounts to a total of USD 4 billion, about SEK 33 billion. Skanska has a 70 percent share of the contract, worth about USD 2.8 billion, about SEK 23 billion. The amount will be equally divided between Skanska USA Building and Skanska USA Civil and included in the order bookings for the second quarter 2016.

    The project will be financed using equity, debt, PANYNJ milestone payments, retail- and airline revenues. As a 33.3 percent shareholder of LaGuardia Gateway Partners, Skanska’s equity investment will be about USD 70M, about SEK 580M.

    “This is Skanska’s largest project ever. We are proud to invest in and lead construction of this project that will improve the quality of air travel for millions of people. The LaGuardia Airport Central Terminal B project is a perfect example of how we, through Public Private Partnership, can expedite delivery of critical infrastructure, bringing together Skanska’s construction and investment capabilities. We have a strong position in the growing US market for PPP projects,” says Johan Karlström, CEO and President of Skanska.

    Construction of permanent works will begin immediately, with most of the new terminal opening in 2020 and substantial completion during 2022.

    Opened in 1964, Terminal B today serves more than 14 million passengers annually. The new LaGuardia Central Terminal B will be built adjacent to the existing terminal, while flight operations continue without interruption. The new design, expected to achieve LEED Silver Certification (Leadership in Energy and Environmental Design), exemplifies New York through two sweeping concourses that provide views of Manhattan and enable increased airline circulation.

    LaGuardia Gateway Partners is comprised of Skanska Infrastructure Development, Vantage Airport Group and Meridiam as project sponsors and co-investors, with Vantage Airport Group managing operations. Skanska and Walsh form the design build joint venture, with HOK and WSP Parsons Brinkerhoff advising on the design.

    Skanska Infrastructure Development is a leader in the global Public Private Partnerships (PPP) market. The business unit invests in, develops and operates roads, hospitals, schools, power plants and other social infrastructure in partnership with the public sector


  14. justicity August 17, 2016 at 12:59 pm #

    don’t forget this contract with MNR!–Beacon_Ferry


  15. justicity August 17, 2016 at 1:11 pm #

    Regional Bus Operations is currently only used in official documentation, and not publicly as a brand. The current public brands are listed below:
    • MTA New York City Bus – most routes within the City of New York, operated by the New York City Transit Authority (NYCT) and subsidiary Manhattan and Bronx Surface Transit Operating Authority.
    • MTA Bus – service previously administered by the New York City Department of Transportation and operated by seven companies at the time of takeover, concentrated in Queens, with some routes in the Bronx and Brooklyn, and most express service from Brooklyn, Queens and the Bronx to Manhattan. The seven former companies were,Command Bus Company, Inc.; Green Bus Lines, Inc.; Jamaica Buses, Inc., Liberty Lines Express, Inc.; New York Bus Service, Inc.; Queens Surface Corp.; and Triboro CoachCorp.


  16. Jonafas August 21, 2016 at 8:53 am #

    The L is all automated after spending billions but TWU got them to keep the motorman to press a button to show s/he’s awake… fine. In case of emergency, needs to be able to take control esp since no platform screen doors. But conductor should not be there… make it one man operation. Platform cameras already installed at front of platform for motorman… No excuse! They also need more ads… on trains, columns, walls, MetroCards… literally everywhere… Fill up empty space with retail and ads.. These are great P3s. Like old phone booths and today’s LinkNYC WiFi and bus shelters, or the newsstands and their private operators/licenses. Money made, working with the City, ads supporting service.

    Platform screen doors may increase dwell, because you have all those extra doors that could fail and delay people, but trains could go faster entering and leaving station because no one will fall on tracks, no trash on tracks, no track fires, etc.


    • Eric August 21, 2016 at 9:02 am #

      It is way more important than the murals and poems they are putting up… We need more consistency… The motormen operate at different speeds, the trains are often late… at least have ads


      • Eric August 21, 2016 at 9:10 am #

        What makes a good station? besides cleanliness, lighting, safety… besides signage, maps, wayfinding for local area… it is the ads! Brand the stations! Put up local advertisements on the On The Go kiosks and stuff… endless opportunities! on the metrocards, columns, trains, Etix website…

        Now, eTix is only valid for that day, so unlike paper tickets, if the conductor doesn’t end up checking your ticket, you can’t use it next time. Making a lot of $ from it. Smart! Now use that money to continue investing in improving service, so there are fewer failures, gaps in service, over-crowding…

        Already, all of the LIRR has level-boarding platforms, decreasing dwells, which is especially needed for its third rail territory. So, now none of their trains have stairs, which were placed at the ends of the carriages so the electrical equipment underneath the trains would have more room — now the doors are mid-way, better for loading/unloading. Unfortunately, trains don’t have open gangways though, and some platforms are too short, so people have to go between cars in the elements. But LIRR is always switching out cars due to changes in ridership/times of day, so open gangway trains would add a lot of cost/time to these operations.

        MNR still has some platforms that aren’t at level, especially west of hudson… I guess the investment just isn’t there, or the stations don’t have high enough ridership to warrant it. They all have parking, lighting, benches, ticket machines, ADA ramps, some convenience machines, heating, signage, bike racks… NJT is even worse. Just little strips of asphalt on some stations. MTA has gotten a lot more investment over the years, to remove grade crossings, double track for more capacity, etc. (There are still some single track sections, reducing capacity/frequency.)

        NJT still has low-level terminals… Hoboken! They would have to raise canopy if they raise platforms, but… really, c’mon. It’s not a streetcar… it’s a railroad.


      • Eric August 21, 2016 at 9:27 am #

        and most trains lay up in the yards during off peak but system is never actually shut down… nowhere to fit all the trains.. yards cannot support every car… stations cannot physically close… so they really need all the revenue they can get to keep it 24/7, keep dispatchers, tower operators, at all times, etc etc


    • tinker August 21, 2016 at 5:02 pm #

      And the L cost billions to get cbtc, and it is not even complicated — does not share track with other services, merges… good luck getting it onto other branches… Clearly, just move the zebra stripes to the front of the platform and get the motorman to be the conductor


      • Taurine October 2, 2016 at 8:27 pm #

        As long as it keeps them on the same running time, or less, should be good. L does not have any cross-platform transfers so there shouldn’t be many door holdings for that… (Conductors shouldn’t hold trains since it’ll delay everything and make more bunching/gaps.)

        But good luck telling that to the unions. These unions are so bad. So many silly rules.


  17. Sammy August 22, 2016 at 12:29 pm #

    Paratransit = contracts too

    (Paratransit Division within Dept of Buses)

    And of course, taxis!

    and “adapt a highway”


    • Hogan September 18, 2016 at 4:25 pm #

      stations could be privately managed, cleaned, add more ads, merchants, bulletins, branding… already limited wayfinding, maps, signage… they can be a lot less basic with parking, better lighting etc.

      Now, to add a new station or service, a lot of paperwork! New maps, signage, reporting, lots of changed spreadsheets…

      On June 24, 2010, AT&T signed a five-year agreement with SEPTA which entitled Pattison Station to be renamed AT&T Station in August 2010. The move is to increase advertising revenue. AT&T would pay SEPTA $3 million, and Titan Outdoor LLC, SEPTA’s advertising partner, would receive $2 million.[5] AT&T is currently the only wireless carrier that provides underground coverage along SEPTA’s Broad Street Line and Market-Frankford Line.[6]

      we need more P3s. merchants already sell metrocards…

      Tollbooths require money; if there’s not enough traffic, then the cost of maintaining it isn’t worth it. Same with stations – why bother with fixing the broken PA systems in our subway stations? Only homeless use them! We have scary, piss-filled, unstaffed elevators, yet you think we don’t have enough ads on our stairs and columns? they would get pissed on… no company wants to brand these stations and take the naming rights… countdown clocks are nice but really, the system looks like a broken transit museum with botched yellow lines (really urine lines), benches and garbage cans – who knows how dirty they are – broken lights and tiles, crappy newsstands…
      try doing at least something positive… and it gets removed!

      General Manager and CEO Henry Li says funding from advertising and naming rights isn’t meant to close budget gaps so much as free up money to upgrade the system or improve service. Li was promoted to general manager in June with a directive to improve rider safety and system performance and clean up the trains, buses and stations, all of which slipped in recent years.
      Advertising is, of course, commonplace in transit systems. Selling station naming rights is less so, but there are examples throughout the country. In Minneapolis, U.S. Bank paid $300,000 for the naming rights to the station closest to U.S. Bank Stadium where the Minnesota Vikings play. Philadelphia sports fans heading to a pro game via a SEPTA train get off at AT&T Station. Tampa’s TECO streetcar is named for the TECO electric company.


  18. Albequek September 14, 2016 at 10:32 pm #

    P3s are VERY complex legal documents… Everything is clarified, defined, there can be no other interpretations. The term, the warranties, obligations, payments, guarantees, disputes, service changes, access to information, examiniations, audits, monitoring, insurance, damages, intellectual property rights, security, administration, subcontracting, legal relations, federal regulations and civil rights issues (buy from US manufacturers, union labor, no discrimination, etc), no benefit to elected officials, liability…

    Just look here for an example:


  19. Hogan September 18, 2016 at 4:23 pm #

    P3s vary. If the incentives are not changed, it does not help much. If the same union contracts exist, forget about it. Massport has the goldmine that is Logan airport, same with PANYNJ. The T is definitely underfunded no question..but its costs are also out of control, bus drivers earn more than the transit planners. The keolis contact is also weird because the state still gives them the trains, which are falling apart. In Europe the private contract operator is responsible for all of that. Just goes to show half assing won’t get you much

    The international company that runs commuter rail trains in and out of Boston racked up $29.3 million in losses over the first year of its long-term contract, requiring its French parent company to subsidize its Massachusetts operations.
    According to state Transportation Secretary Stephanie Pollack, Keolis Commuter Services likely failed to fully account for the cost of providing service to the region.
    In an interview with the News Service, Pollack attributed the net losses that Keolis reported in its first year of operation to costs the company didn’t factor into its bid.
    “My understanding is the primary reason is that Keolis failed to understand the full extent of the costs associated with meeting their contractual obligations,” Pollack told the News Service. She said, “My sense is that it has been a more costly endeavor than Keolis assumed going into it.”
    Keolis won the contract in January 2014 with a bid that would pay the company $2.69 billion for the first eight years with an option to extend an additional four years for a total cost not to exceed $4.26 billion. The company beat out the incumbent commuter rail operator, which proposed a contract $184 million more expensive for the first eight years and potentially $254 million pricier over 12 years.
    The former system operator, Massachusetts Bay Commuter Railroad, claimed the T, under the oversight of Gov. Deval Patrick at the time, prized price above all else while MBCR would have provided the best value.
    The general manager of Keolis Commuter Services, a joint venture of Keolis Rail Services America and the French national railway known as SNCF, declined to say what steps Keolis might take to start making a profit on the contract that began July 2014.
    “I’m not here to talk about the financial statement,” General Manager Gerald Francis told the News Service at a recent hearing on MBTA fare hikes and commuter rail schedule changes in Lynn. Francis, who took over as general manager months after Keolis won the contract, said, “We’re here to operate and maintain the system.”
    The commuter rail offers diesel rail service to more than 130 stations and over 664 miles of track, providing 33.5 million trips in the first year of the Keolis contract, according to MBTA data.
    As Keolis has racked up losses, its backers have stepped in to fill the void, according to Pollack.
    “The parent company has been willing to infuse resources into Keolis Commuter Services to ensure that they’re meeting their contractual requirements in Boston and improving their on-time performance,” Pollack said.
    Pollack said she believes SNCF is assisting Keolis with covering its contract losses to date. Francis declined to answer whether the riders of the French national railway are aware of the subsidy for commuter rail in Boston.
    The parent company of Keolis North America is a transportation giant in its own right, boasting more than 3 billion passengers in 2014 and about 60,000 employees, the majority of them in France.
    The company’s venture moving commuters around eastern Massachusetts represents its biggest railroad business in the United States.
    “I don’t believe that in the long-term Keolis wants to lose money on this contract, but they have made it clear that it is important for them to succeed in their first North American operating contract in order to expand on the continent,” Pollack told the News Service.
    In a statement, Keolis spokesman Mac Daniel said “fixing the system’s problems has taken longer and proved far more costly than anyone could have predicted,” and said the company is “exploring at a range of strategies and approaches that will enable us to operate more efficiently, while continuing to provide our passengers with an outstanding commuter rail experience over the life of the contract.
    “SNCF is our largest shareholder and are providing financial resources that are enabling us to make the investments and improvements that will bring the contract to profitability over time,” Daniel said.
    The MBTA has worked with Keolis, reinvesting fines for subpar service into cleaning trains and collecting fares. Fare collection is the responsibility of Keolis though fare revenues go into MBTA coffers.
    Asked whether the T’s “fixed-cost” contract with Keolis would be adjusted to make it more favorable for the private vendor, Pollack said any contract changes would need to improve service.
    “For the MBTA and for [the Department of Transportation] the first issue is making sure Keolis is performing for our customers, and if there’s going to be a conversation about changing the contractual relationship, that conversation needs to start from a position of Keolis is doing what we need them to do in terms of performance,” Pollack said. She said, “My general sense is a lot of things have been working better but not everything is fixed and we will probably need another performance improvement plan to bring us to the end of Keolis’s second year under the contract to be completely sure that they’re performing up to the contractual obligations.”
    The second year of the contract ends this June.
    Jim O’Leary, the chairman of the Massachusetts Bay Commuter Railroad, said the contract essentially mandated a 4 percent profit for the vendor and he faulted Keolis for its assessment of the cost of running the trains in Boston.
    “I think any bidders, particularly on a contract as large as this, have an obligation to do their own due diligence,” O’Leary told the News Service. He said, “The French national railroad, I guess, as long as they want to continue to subsidize the commuter rail service in Boston, they’ll continue through the term of the contract.”
    Asserting that the vendors were “supposed to be able to stand on your own two feet,” and questioning how long Keolis’s parent company would be willing to shore up its losses, O’Leary said the hypothetical adjusting of the contract to make it more favorable to Keolis “undercuts the integrity of the process.”
    MBCR, a partnership of Veolia Transportation, Bombardier and O’Leary’s company Alternate Concepts, took over the service from Amtrak in 2003. The corporation exists now only in accordance with its old contract with the T, according to a spokesman.
    Asked if he would be interested in bidding on Boston’s commuter rail contract at some future time, O’Leary said, “That’s the business we’re in.”


  20. Iona September 20, 2016 at 10:42 am #

    We need more engagement, partnership, empowerment, and communication.
    Unlike WMATA, our ridership keeps growing, unlinked and linked, fare evaders and all.
    So many stations, track and route miles, underground, cut, elevated, etc…
    But we need to make it cleaner and better report our performance, unlike the T, which only reports headway OTP (wait assessment), not actual OTP or delays! We need to stop diddling with numbers and start improving things.
    How to make it cleaner? contract out cleaners. We pay more for less right now. International systems all contract out cleaners, and have fewer riders per cleaner, per station area, etc. Also, our stations conditions are also bad – leaking, bad tiles, etc, which cleaners cannot fix… so if they want to hire more cleaners, first fix the stations, and allow the cleaners to issue fines to people who litter! (Or pay them based on performance. The platform controllers should also be paid based on dwell and should be able to fine door holders.)
    NY’kers are a dirty group of people. I’m sure culture plays a role in why we’re so dirty. And 24/7 service. European cities don’t have so much trash, they don’t take-out food as often perhaps, their garbage cans are smaller… We now have those solar compactor garbage cans, closed so they don’t blow out trash in the wind, but now you need two hands to open them.
    One of the few good P3s in our area is the pedestrian plaza program with DOT. DOT works with Business Improvement Districts to fund and maintain them.


    • Felix September 25, 2016 at 3:18 pm #

      WMATA has training and maintenance issues. NYC has been working on that for decades, with broken windows policing, weekly inspections, etc… which causes a lot of our delays, due to the changed flagging rules that make trains slow down for more time, for “safety”, slow slow slow. But, they try to go fast when possible, I guess. And the diesel fumes from the work trains are necessary, since they sometimes turn off 3rd rail power for work. So many things can cause problems – planned work, weather, crowding, MDBF, car equipment, police, unplanned work, fires, signal issues… And even headways aren’t always ideal, it depends on the schedule and the merges along the line.

      And, flagging… you know, if trains go faster, maybe it will mean less time for someone to run into it, so it could be safer! all those delays means people are taking cars or biking instead, which is MORE dangerous! speed is so important.

      when people wear seatbelts, they drive more dangerously, and more pedestrians die! of course, cars going really fast is dangerous and also means LESS capacity, because they have more space between them… 40 mph is ideal for vehicles, lower, and there is less thruput/capacity… for trains without cbtc, there is a fixed block signal, so even if they are going 5 mph, they have to stay far away from another train, as far away as they would need to be at the maximum speed to not hit it.


  21. Webster October 7, 2016 at 3:52 pm #

    You’ve got to be careful with incentives. Private prisons are paid per prisoner, and they lobby judges and give them corrupt kick-backs to jail more kids. And how would changing incentives be implemented? How would safety procedures be kept? Repairs may not be done right away if they are privatized? (Then again, they don’t do it now right away sometimes, but the yards are working as hard as they can.) It is hard enough doing day-to-day operations and dealing with chaos of major incidents, to plan for the future, explore new technology, etc, is daunting.

    How about smaller changes to improve service? Like signs along platforms notifying passengers, on the 1, that they need to be in the first 5 cars. Or to go to the back of the train where it is less crowded, because most transfers are at the front so people crowd there. Or measuring how door holding increases running time by counting the extra time until doors are locked from when they’re opened (this is done automatically on the new rolling stock, as is the weight of cars to show ridership). Or having platform controllers keep people from rushing into trains without letting people off, going to the whole platform, etc. Our stations were built way before current ridership projections and some entrances are only in one section so it clogs up the train at that one spot.

    But the system was designed to be constantly churning, with loops for quick turnarounds… at least, the IRT. Near the surface, quick and easy, cheaper (since it was built closer to the surface requiring less material, etc). Speed, speed, speed! Now they are doing transit improvements on the L when it is closed and at GCT with East Midtown Rezoning, hopefully easing crowding with more entrances, easing delays.

    They are trying to run too many trains than can be supported with current signal system. It is not just trains per hour, but speed, the fleet, signals, dwell time, the schedule, running time… Reliability is down, service delivery is struggling to keep up. Performance indicators should look bad if service is bad, even if they manage it well. It’s all about finding the right indicators for what you’re trying to show, but politics can get in the way. And there is so much variability between operators/conductors, and how they approach signals, etc. (The signals don’t always work right and if they mess up, they are in serious trouble.)

    Miraculously we have a SCHEDULE, which syncs everything – crew availability, rolling stock constraints, load/demand, merges, etc. We should try and follow it!


  22. ANONYMOUS January 9, 2018 at 10:20 pm #

    A combination of huge overhead and loses and pressure from the city and state government pushed these private companies to sell their subway lines to the goverment in the 1930s as it’s this same huge overhead and risk, especially dealing with the Unions who’s contracts are protected by the law, is why no private company today would want to get involved in purchasing and running the MTA/NYC Subway. Especially since today’s MTA/NYC Subway is running at a $34 billion and climbing, debt. What kind of investors and shareholders would want to get involved with so much debt and risk?

    The only place in the world where this happened and went relatively smoothly was Britain and Japan, but the British and Japanese rail companies still get huge subsidies and their debts and losses covered from their national government in a way that’ll never happen over here.

    The same for PATH, LIRR, and Metro North. The PATH was known as the privately owned and run Hudson and Manhattan railroad that was sold off to the Port Authority when it went bankrupt in the 1950s, while the same thing to the LIRR and Metro North.
    No one in their right mind would attempt this because the voters won’t let it happen. But lets say for the sake of argument that they’re over-ridden, or hypnotized.

    Now, how much would it cost the person privatizing it? That’s an interesting question. Basically, how much yearly revenue could it generate? The MTA is currently tax supported. It does not turn a profit. Nor does it intend to.

    Someone wanting to privatize the MYA/PA it would result in an almost immediate and large fare increase, because the alternative is wage cuts to operators, union busting, and a loss of pensions. If the union, as it exists, decided to go on a full and extended strike – no busses, no trains, no activity at the Port Authority, the city would implode. Thus anyone privatizing would have to either deal with that eventuality (by which I mean be lynched) or raise money by raising fares significantly.

    Which would impact the poor of NYC/NJ the worst, as a big fare increase would be a bigger part of their wages. People who cook, clean, and generally do blue collar jobs in NYC would not be able to anymore. They’d move elsewhere, and remaining prices for literally everything else would increase as well just to keep people doing them, meaning that middle class people (already squeezed by transit) would suffer as well. Crime would probably increase as well, as poverty would increase.

    So on that end, it would cost the city a vast amount even if they “sold” it for whatever the market would bear.

    It would cost little if anything to change them from publicly owned authorities to privately owned corporations. However, there would be much objection to this.

    While the Port Authority’s day-to-day operations roughly break even, with the highly profitable airports subsidizing loss-making divisions such as PATH, capital projects use taxpayer money. No taxpayer money? No capital projects.

    Meanwhile, the MTA runs a loss-making business despite rising fares and large taxpayer subsidies. Cut off the billions they receive in taxpayer money, and all hell would break loose. Many employees would be laid off and fired, and service would be significantly cut, as their first priority would be to cut anything non-essential, and fares would sharply increase to cover their losses.

    The PANYNJ and MTA operate not for a profit, but for the public good, which is why an attempt at full privatization would be catastrophic.

    Our nation has gone to great lengths to protect people from private monopolies through the Sherman and Clayton Antitrust Acts, the Justice Department’s antitrust unit, and public service commissions that regulate utilities in every state. All this effort is directed against the actions of privately owned companies that would like to raise their prices and increase their profits.

    But monopolies where the government is the sole provider of a particular good or service and competition is prohibited by law favor their own interests, just as private monopolies do.

    The antidote to monopolies, including public-sector ones, is competition. Not all public services lend themselves to it, but we should opt for competitive contracting wherever possible. One viable area is bus services, where competition would help break up inefficient transit monopolies. With more than 2 million daily riders — the most in the country — New York is a city that would especially benefit from privatizing its bus system.
    Change in Cost per KilometerPrivatization Reduces Costs. In order to reduce its budget gap, New York’s Metropolitan Transportation Authority (MTA) has dropped more than 30 bus routes, 500 bus stops and two subway lines in recent years.

    Major cities such Los Angeles, San Diego, Stockholm, London and Copenhagen introduced bus competition several decades ago and were spectacularly successful in reducing costs without negatively affecting service. Indeed, savings ranged from 20 percent to 51 percent in cities that used competitive bidding to select bus contractors, according to a Manhattan Institute study. Specifically, after privatizing its bus service [see the figure]:

    Stockholm’s cost per kilometer for bus operations dropped 20 percent from 1991 to 1999.
    Copenhagen’s cost per kilometer dropped 25 percent from 1989 to 1999.

    London’s cost per kilometer dropped 51 percent from 1985 to 2000.

    Even a 20 percent cut in costs would save New York close to $500 million a year — enough to restore many dropped routes

    Breaking up the Bus Monopoly. New York squandered a valuable opportunity in 2005 and 2006 when it took private companies that enjoyed exclusive, noncompetitive deals with the city to provide bus service and merged them with the state-run MTA, instead of bidding out their routes in a truly competitive process. To this day, competitive contracting is practically verboten among public officials, who cower before the transit unions’ political might.

    Still, private carriers, regulated by the city, are emerging to serve to public’s transit needs in areas abandoned by the MTA. Newly deregulated commuter vans operate along former MTA routes in Brooklyn and Queens; a new group-ride taxi runs from the Upper East Side to the Financial District; and a small private bus company will initiate service along three dropped express routes into lower Manhattan.

    The economics are an eye-opener:

    It cost the MTA $19 per passenger on one of these bus routes, but the fare was $5.50 — with taxpayers subsidizing the rest.

    The private transit company expects to make a profit charging the same $5.50 with no subsidy.

    This illustrates the huge cost disparity between public and private operation; if the entrepreneur is right, he will cut costs by 71 percent.

    Transition to Competition. Competition for bus service should be introduced gradually. Beginning in one borough, existing bus routes could be divided into several logically related route clusters of similar size. The MTA could continue to operate most of the clusters, at least initially, with just two or three put out to competitive bid for staggered three- to five-year contracts. In the contract specifications, the MTA would set the daily bus schedule for each route in each cluster and also calculate its own current cost of operating that cluster. The MTA could invite bids from qualified private bus operators and compare the bids with current costs. If a bid price is lower, the state would still continue to set fares and receive the income on the contracted routes, but award the cluster to the private bidder and pay it to operate the routes.

    Because it is unrealistic to expect the MTA to fairly evaluate bids or private companies’ performances, an independent authority would be set up to take over these tasks. As in London, the authority will have the power to award cluster contracts to private firms that perform well and underbid the MTA. Ideally, contracts for the clusters will be awarded to separate bidders, with a limit on the number of clusters any one firm could win. The idea is to create a competitive environment in which one can regularly compare the contractors’ performance with the MTA’s. In time, more clusters will be put out to bid.
    The experience in other municipal services shows that after losing several rounds of competition, public agencies begin to adopt the better practices of the private sector. Even if the MTA’s bus operations prove consistently worse and more costly than the private contractors’, some bus routes should remain “in-house” to help prevent collusive high bidding by private firms. Retaining this in-house capability will also allow an emergency MTA takeover if a contract with a private company has to be canceled, as the MTA could easily expand to assume route operation in such cases.

    Conclusion. To be effective and held accountable, managers of decentralized transit units will require autonomy and authority. These managers will need to operate outside the typical civil service titles and regulations and the original constricting union agreements.
    Competitive contracting is neither a heretical notion nor an untested scheme. Many cities do it, and they have much experience to draw upon. It is time for New York to catch up and start saving hundreds of millions of dollars.

    The New York City subway system is the most extensive in the Western Hemisphere serving approximately 1.7 billion people annually, and 5.4 million each week. The system is made up of 468 stations, 892 miles of total track, and 6,311 subway cars. In addition, it is the only system in the United States that operates 24-hours each day. The MTA has consistently run a deficit, but increased spending from 2000 to 2004. Compounded by the 2008 financial crisis, an overwhelming financial burden has been placed on the MTA. The department currently holds $32 billionii in debt and continues to project a growing budget gap of up to $1.6 billion in 2016.

    The growth of health insurance cost for employees and pension contributions are expected to continue to increase over the coming years.The MTA has also not received state funds in recent years.

    To try to mitigate the effects and close the budget gap, the MTA has tried to reduce spending by, for example, freezing salaries of non-union employees and increasing revenue in ways that have greatly affected the public. Since 2008, the MTA has: Dropped 33 bus routes, 500 bus stops, and two subway lines. Raised fares and tolls 7 percent in 2013, and will raise them another 7 percent in 2015. This increase is growing three times faster than the projected inflation rate. Fares and tolls will have increased by 35 percent since This has been met with much public opposition.

    As of March 2013, a one-dollar tax will be remitted with the purchase of each new metro card. In addition to these problems, users report that the subways are unreliable, crowded, dirty, and in need of repairs. There is an increased need to address services issues, and repair infrastructure.

    Proponents argue that privatizing the subways would decrease costs and increase efficiency.

    Specifically, they argue privatizing the subways would:
    • Produce cost-savings. Infusing the system with competition through a bidding and contracting process incentives the private sector to keep costs low. Furthermore, because passenger revenue determines the profits, private companies would be cost conscious.
    • Increase efficiency. Because private companies would need to find ways to cut costs, they have flexibility to find innovative new ways to provide the service for a lower cost.
    • Better serve consumers. Private companies have the incentive to provide customers, or passengers, with high quality service since they depend on the customer for their profits.

    Arguments against Privatization

    More than most cities in the country, New Yorkers depend on the subways as their primary form of transportation. Quality and efficiency are of secondary importance next to access and cost. Therefore, opponents of subway privatization argue that it is infeasible for a private company to reduce costs while simultaneously maintaining or improving quality, service levels, and user fees. Cuts would have not been made to services or fees would have to increase, which are of least importance to the citizens of New York.
    The history of the subways provides an example of how privatization would work. In the 1920s, the Brooklyn-Manhattan Transit Company (BMT) owned the subway system and the fare was held at a nickel. As a result, the company resulted to cutting services, reducing wages, eliminating jobs, and deferring maintenance. The system quickly went from the best in the world to one of the worst, and eventually led to a government takeover.


    Economic Argument
    A purely economic argument for privatization works to support the opposition’s argument. Economists have proposed privatization of the subways, with a focus of (1) controlling spending and (2) improving quality. The proposed way to reach these goals, however, is not politically feasible. To control spending, they argue that the unionized labor force be replaced with private employees. This will allow for reduced spending, as they could hire fewer employees, pay lower wages, and avoid pensions. In addition, they argue to better match subway supply with demand. Specifically, they recommended that the system end the 24-hour subway cycle, and adjust service frequency at less populated stations.viii
    To improve quality, economists propose giving riders a better experience by investing in renovating stations, cleaning cars, and improving speed and timeliness.

    The primary goals in considering privatization are cost savings and enhanced service delivery.

    Given the risk involved, privatization should not be pursued because there is no guarantee that these goals will be achieved.

    Goal 1: Cost Savings
    Cost savings are produced when the quality is held constant.
    In the competitive bidding process, private entities have an incentive to keep costs down in order to win a contract, but are often unable to stick to their proposal. There are often a number of hidden or indirect costs, such as use of public equipment.
    The second goal of privatizing would be to increase efficiency and enhance services, while maintaining level of service. Like cost savings, enhancement of services is possible but not guaranteed. While some studies have found up to a 24% improvement in efficiency, which assumes a stable service level. Others have discovered that much of the increased efficiency has been misreported and was associated with reduced service levels.

    What is clear from these past studies, as well as the experiences from other privatization efforts, is that the results are inconsistent and not guaranteed. This means there is a significant level of risk associated with proceeding to privatize. Furthermore, as stated previously, enhancing service level while saving money is not possible without cuts or raising fees.

    Contracts and Monitoring
    Any successful contracting must include a competitive bidding process, clear and measurable guidelines and performance indicators, and the ability to easily monitor performance. The expansive nature of the subways and its function as a public service provider would make a successful contracting and monitoring process infeasible.

    Defining Guidelines

    The MTA must provide guidelines that allow the public to be better served. The large nature and complexities of the subways would make it difficult, but not impossible, to write comprehensive and clear guidelines and define outcomes. The MTA would not want the company to cut services, raise user fees, or compromise infrastructure, as discussed. This strict framework would greatly inhibit the private company’s ability to be innovative and find cost-savings. Without significant profit, mainly from user fees, and leeway to make changes, the company could not afford or benefit from improving the subways in its current state. The service profits would not cover the costs, and would likely require a government subsidy in order to do so. Given the inflexibility, privatization would not provide the opportunity for the private sector to utilize its expertise. Privatization would only be possible if the government were to limit its specifications, which would not be feasible at this time.

    Monitoring Performance
    The contracting agency must be able to clearly monitor and measure performance outcomes, as specified in the contract, to analyze success. As mentioned above, while defining desired outcomes is possible, albeit likely difficult, measuring the output and success would be challenging and expensive. It would be necessary to create a comprehensive system that allows for clear data collection that can be easily verified. Creating such a system would be expensive and verifiability would be difficult. Unless the government would be certain that additional costs would not incurred by monitoring and that the private partner is not exaggerating outputs or successes, privatization should not be pursued. While defining guidelines and desired outcomes may be feasible, the service-orientation of the subways would limit innovation of the private sector, and monitoring service would incur additional costs. For both of these reasons, privatization is not feasible.

    The political, social, and economic impacts of privatizing the MTA also make it an unviable option, and are likely the strongest argument.
    Political and Social Impact

    Privatization would create social unrest and therefore greatly impact the politicians’ decision to support the move. Politicians would not approve privatization because of the strain it would put on their constituents, and their reputations. Specifically:

    • As discussed, privatization would only be feasible if they were able to cut services or increase fees. This would create a great burden on the millions of New Yorkers who rely on the service daily. Furthermore, service cuts to stations that are underutilized or doing away with the 24-hour service would disproportionately impact low-income minorities in the outer boroughs, who depend on the subway to get to work more so than many of higher income individuals in Manhattan.
    • Many or most union workers would be out of a job, assuming they are not brought on to work for the private company. Even if they were employed by the private company, their benefits and wages would likely be reduced.

    Economic Impact

    As acknowledged, privatizing the system would be a significant risk and service failure or poor performance could have a grave economic impact. The cost of unsuccessful privatization could have an extreme negative impact on the city.
    Not only would the cost of fixing errors be extremely high, but also the externalities could greatly harm the city’s economy. In addition to many people being unable to get to work and earn their wages, the lack of subway means cancellations of economic activity and lost productivity. The worst case would be if the subway system came to a halt. As an example, the December 2005 subway strike cost the city approximately $400 million on the first day and $300 for the following two days.xii While potential economic impact associated with the risk of privatizing the subway system could be detrimental to New York, the social and political risks associated with privatizing are the prime deterrent from doing so.


    Key considerations of whether New York City’s subway system should be privatized includes the potential for cost-savings and improved quality, as well as ability to successfully contract, monitor, and implement. Analysis shows that privatization is not a viable option due to how dependent New Yorkers are on the system. Accessibility and cost are the primary considerations to the citizens and the city. The risk and cost associated with the engaging in the process exceeds those of the potential benefits. Privatizing would be not guarantee cost-savings or improved quality, and privatization failure or service cuts could be detrimental to the city socially and financially. The MTA has begun to contract out particular construction projects. While system privatization is not recommended, I would urge the MTA conduct further research into the cost savings associated with this measure, as it may provide a viable option for continued savings.
    Interesting how we accept the subsidization of privately owned banks, car manufacturers, military suppliers etc. but gawk at every million spent on transit. Our country was separated from transit in such a profound way that most don’t see the benefit of public investment.



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