Interview with Mysore L. Nagaraja,
President, MTA Capital Construction

By Carol J. Patterson, Esq.

CJP: Thank for you meeting with me today. What an exciting time this is for the MTA.

MLN: It certainly is. We are embarking on the largest system expansion the city has seen in several generations – the Second Avenue Subway, the East Side Access Project, the No. 7 Line Extension as well as two lower Manhattan recovery projects – South Ferry Terminal Station and the Fulton Street Transit Center. These projects represent nearly a $14 billion investment in our region’s public transportation network. By mid-2007, all of these projects will be under construction.

CJP: That’s very impressive. Let’s talk first about the Second Avenue Subway Project. I understand that this project will be accomplished in phases.

MLN: Yes. The finished project will h4 from 125th Street to Hanover Square and will cost $16 billion. Between the federal government and the MTA, we agreed to approach the project in four phases. The first phase will h4 from 96th Street to 61st Street where we will tie into the existing Broadway line. During its first day of operation, this portion of the Second Avenue Subway will service approximately 200,000 customers. One-third of these customers will be new subway riders who previously chose other forms of transportation like buses or taxis.

CJP: I read an article in the New York Times about the impact of rising real estate costs on this project. How has phase one been affected?

MLN: The budget allocated for property acquisitions will remain an open-ended item. In 2002 and 2003, we sought appraisals for the properties and easements we needed to purchase. The total value of the appraisals at that time came to $191 million. Today’s value is $254 million. According to the federal guidelines governing property acquisition, you must obtain a final appraisal at the time of acquisition. This appraisal becomes the final settlement value. The courts support this process and we can finalize the sales and take possession of the property without impediment. With the exception of the increase in cost, the project is not affected.

CJP: What are the plans for the other phases of the subway?

MLN: The second phase will h4 from 96th Street to 125th Street. What’s interesting about this section is that, in part, it already exists. Back in the late 60’s/early 70’s, the City began Second Avenue subway construction and dug two sections of tunnel from 99th Street to 105th Street and from 110th Street to 116th Street. These existing tunnels will have to be retrofitted to meet today’s standards for tunnel construction but most of the digging is done. And, then, of course, there are stations to construct. The costs associated with station construction have dramatically increased in recent years predominantly due to additional code requirements pertaining to public safety. Phases three and four will h4 from 63rd Street to Houston Street and Houston Street to Hanover Square, respectively.

CJP: What is the projected completion date?

MLN: The projected completion year for phase one is 2013. If we continue to receive funding, the remaining segments can potentially be completed within 15 years from the completion of phase one.

CJP: Why was the segment h4ning from 96th Street to 61st Street chosen for phase one?

MLN: Two reasons influenced our selection. First, this segment is the most economically beneficial. When completed in its entirety, the Second Avenue Subway will serve approximately 380,000 riders daily. The segment apportioned to phase one, as I mentioned previously, will attract 200,000 daily riders. The numbers speak for themselves. The other reason is a matter of logistics. North of this portion, tunnels already exist – tunnels that will ultimately be retrofitted as working tunnels during phase two of the project. But, in the interim, we intend to use those tunnels as the place from which to start train service for phase one operations.

CJP: How many people does the system serve a day?

MLN: Between the subway system and the commuter railroads – the Long Island Rail Road and Metro North – we move 8 million people on a week day. Almost onethird of all mass transit usage in this country is attributable to our operations.

CJP: To what extent will the people living or working near Second Avenue feel the impact of the construction?

MLN: The tunneling technology is so well developed that very little noise or vibration will be emitted. To ensure that levels are kept to a minimum, we will place vibration monitors strategically throughout the vicinity. But there will be other inconveniences that are unavoidable. One of the first activities that will be scheduled will be the installation of the 300 ft. long tunnel boring machine. In order to install the machine, a rectangular hole, or open-cut, will be made from 96th Street to 92nd Street. The hole’s width will h4 three traffic lanes. This same approach will be employed during the construction of the three new train stations. Essentially, from the start of construction through project completion in 2013, two to three Second Avenue traffic lanes will be out of service.

CJP: What will be the impact on Second Avenue traffic?

MLN: There is no doubt that the impact will be significant. We have consulted with the Department of Transportation (DOT) and new traffic patterns have been worked out to alleviate some of the anticipated congestion during the construction phase.

CJP: Please describe the local community reaction. Have you performed any sort of outreach to those who will be affected?

MLN: Naturally, there are concerns. And we are addressing each of those concerns, both individually and at community board meetings. If I could build this system elsewhere and ship it here, I would. But, of course, that is not possible. Overall, there is public support for the project in addition to support from the New York City Council, the Governor, Senators, Congressmen, Assemblymen, and so on. This project has been in the plan for over 60 years and, it’s finally happening! It’s very exciting.

CJP: What is the status of the LIRR East Side Access project? The funding is in place, correct?

MLN: Yes. This project will cost roughly $6.3 billion. The federal government has given us $2.6 billion and the State and the MTA will finance the balance. We have already awarded quite a few contracts, two of which are in the works. There is an open cut contract in Queens in Sunnyside Yard. This project is about 50% complete. And, a tunneling contract was awarded last year to bore from 63rd Street and Second Avenue to Grand Central. Two rail yards have been completed for this project. One is located near Yankee Stadium and is also operational, and, the other, is located in Sunnyside. Two billion dollars of the allocated budget has already been committed. So, this project is well underway.

CJP: Is it true that you’ve hired a foreign contractor to work on this project?

MLN: One of the joint venture partners, Dragados U.S., which has a Spanish parent company based out of Madrid, will bore the East Side Access tunnel and we’re looking at other international firms to perform some of the other work involved.

CJP: This is a challenging time to build in New York. There is so much construction going on that many of the resources are tapped out. Is the employment of international firms a necessary coping strategy?

MLN: Yes. I’ve been meeting with industry groups and leaders and have been strongly advocating for joint ventures with international firms. With what’s going on downtown and the plans for the New Jersey tunnel combined with what we have scheduled, $20-30 billion will be spent on construction over the next ten years. The local contractors alone do not have the capacity to handle this volume.

CJP: Is this Dragados’ first U.S. project and have they been partnered with a domestic firm?

MLN: No, but here they are joint venturing with Judlau. We will be building another tunnel in association with the East Side Access project under the Sunnyside Yard. That contract will be awarded toward the end of this year. As you know, New York is a very unique construction community. This is why we encourage joint ventures.

CJP: Are labor shortages also a concern?

MLN: Labor shortages are a huge concern. We are encouraging the unions to increase their apprenticeships, train more people and accept skilled laborers from other states. In fact, the MTA has established a Blue Ribbon Panel to look at and analyze these and other issues. Any issue that could impede construction will be studied and recommendations will be made. The Panel will be comprised of contractors, labor union representatives and representatives from governmental entities. In addition to resource shortages, the panel will also be charged with evaluating bonding and insurance capacity issues. Traditionally, we have always required a 100% performance bond and the State has a requirement of a 100% payment bond. When you’re talking billions of dollars in contracts, we will naturally encounter capacity problems. It’s a very challenging environment and we will need to make changes, to be the client of choice for the contractors. That is the objective of this undertaking.

CJP: Tell me more about the MTA’s procurement process.

MLN: One of the biggest advantages that the MTA has is that we can negotiate procurements. Neither the City nor some state agencies can do this. This is a big, big advantage. We can negotiate terms and conditions, means and methods and design changes. The negotiated procurement process affords us the ability to reach acceptable terms and move forward on our projects with greater speed than those agencies that do not have this flexibility.

CJP: Did you take that approach on Fulton Street as well?

MLN: Yes. In fact, the last proposal for the Transit Center itself was made public just a few months ago and that negotiated procurement is currently underway.

CJP: What about contract provisions? How much flexibility is the MTA willing to entertain?

MLN: We are now willing to negotiate provisions that were once considered nonnegotiable – from alternative dispute resolution provisions to no damage for delay provisions. In essence, we have adopted the private sector model. The MTA has come a long way.

CJP: The City has put new emphasis on environmentally- friendly, sustainable design. Does sustainability factor into the MTA’s approach to new construction?

MLN: Sustainability has become the motto for everything we do here and I’m very proud of our efforts. When we started work on lower Manhattan, we insisted that all of our contractor’s off-road vehicles use ultralow sulfur diesel fuel. We started with stationary equipment, but now we have expanded this requirement to include even the material-bearing trucks such as concrete trucks. The Department of Environmental Protection (DEP) recently visited the Fulton Street site and video-taped our operations to use as an example of environmentallyfriendly urban construction. They intend to distribute this video nationally. Even the demolition that our agency handles is handled responsibly. In fact, we call it “de-construction.” We take buildings apart piece by piece to limit the circulation of dust and other particles. The very strict standards that we established are being adopted by the City and other agencies such as the Port Authority.

CJP: This is all very impressive and exciting. Thank you very much for your time and hospitality. I look forward to watching your projects evolve and become operational – their impact will be felt for decades to come.

Interview with Mysore L. Nagaraja, President, MTA Capital Construction