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MTA’s debt could limit subway, LIRR projects

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Elliott "Lee" Sander, the new executive director and CEO of the MTA, says it is too early to know but that a committee will look into the matter over the next few months. Peter Kalikow, Sander's predecessor as chief of New York City mass transit, seemed less uncertain. "As far as I know, we'll build them all," Kalikow said after the MTA's monthly board meeting Jan. 30. "I want them, Elliott (Sander) wants them, Gov. Spitzer wants them." The problem is that the MTA's capital program, which runs through 2009 is running over budget by at least $1.4 billion, according to a report first published by the New York Times. As result of heavy borrowing, the MTA faces years of enormous debt starting next year. The $21 billion program is supposed to provide for not only what the MTA calls its mega projects Ð the Second Avenue Subway, East Side Access to bring Long Island Rail Road trains into Grand Central Terminal but also the purchase of hundreds of new rail cars and the improvement of signal systems and other subway equipment.Part of the reason for the problem has been the weakness of the U.S. dollar at time when rail cars are imported from France and Japan and the cost of construction Ð with some estimates reporting that construction cost has been rising as much as 1 percent a month. There also has been a lack of competitive bidding among building contractors, making for high costs although the MTA has delayed several projects rather than accept bids that transit officials said were too high. Kalikow appeared dubious about how serious the financial published financial figures actually were. "That number is a number that may be the sum of all fears," Kalikow said of the $1.4 billion reported to be how much the MTA capital plan budget is over budget. "It may be somebody's worst nightmare.""We're looking into this," Sander said. "It's a serous problem and we're doing everything we can to deal with this." As to whether the MTA's financial picture would push the big projects onto a siding, Sander said, "It's really very premature to say at this time." In any case, Sander said, the MTA will appoint a committee to investigate the money status and report back in 60 to 90 days.

Updated 7:06 pm, October 10, 2011
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