(Bloomberg) -- New York City’s aging transit system needs 2,000 new subway and commuter rail cars, 60 miles of new subway tracks and upgraded power stations.
The Metropolitan Transportation Authority previewed the laundry list of improvements on Monday as part of its 2025—2029 capital program, which funds infrastructure work across the agency’s network of subways, buses and commuter rail roads.
While the MTA must submit a multi-year capital budget to state legislators in October, lawmakers most likely won’t resolve how that spending plan will be funded until next year during the state’s own budget process. MTA officials have said the upcoming plan will exceed its current $51.5 billion program due to inflation, but did not specify the costs.
“What we’re trying to do is to get the major stakeholders — and you know who they are — to start to think directly about what size of the capital program they’re prepared to support,” Janno Lieber, the MTA’s chief executive officer, said Monday during a capital program committee meeting with board members.
The MTA needs to modernize a more than 100-year-old transit network to improve service, replace equipment and train cars that are beyond their useful life and strengthen an aging system that gets pummeled with heavy rain and rising sea levels.
Thomas DiNapoli, the state’s comptroller, estimates the MTA needs to spend $43 billion in the next five years just to keep its assets in working condition.
The upcoming capital plan needs to fund more than $4 billion in power substation upgrades, provide about $7.4 billion to fix structural defects on elevated structures and tunnels and bridges, and overhaul Grand Central Terminal’s 110-year-old train shed, the MTA said.
“When we look at structures, tunnels, train sheds, elevated structures, we see a condition of historic underinvestment and the risk that assets are going to start falling apart,” Jamie Torres-Springer, head of the MTA’s construction and development, told board members during the committee meeting.
Improving the system will help increase ridership and boost farebox collections.
DiNapoli estimates a $25 billion shortfall in the MTA’s new five-year capital spending plan until Albany lawmakers craft a funding solution. Uncertainty with the MTA’s current plan may affect what infrastructure projects the transit provider can budget for in its next program.
Governor Kathy Hochul paused a congestion pricing initiative that was set to start June 30 and forced the MTA to shelve $16.5 billion worth of infrastructure improvements, including signal upgrades, accessibility projects and extending the Second Avenue subway to Harlem. But MTA officials anticipate state lawmakers will address that shortfall and allow those projects to move forward.
“We are assuming that there is a source other than the MTA having to do new and unexpected borrowing for the $15 billion that congestion pricing was meant to fund,” Lieber said.
The MTA’s infrastructure spending falls short of similar investments made in the private sector, according to a JPMorgan Chase & Co. report. The transit provider needs to direct $23 billion a year to capital projects — far short of the roughly $6 billion it allocates now annually — to bring infrastructure investment in line with what’s spent among similar entities, the report said.
The MTA needs to boost its capital investments to match the amount of such spending among freight rail, electric utilities, shipping companies and the airline and automobile industries, according to the report. It needs to spend $16 billion annually to support its infrastructure in addition to $7 billion a year to update depreciated assets.
The transit provider had $47.4 billion of outstanding debt as of July 24, according to MTA data. It pays nearly $3 billion a year in principal and interest costs, taking up about 15% of its operating budget, Kevin Willens, the MTA’s chief financial officer, said during a finance committee meeting on Monday.
But those debt-service costs will account for a larger chunk of the MTA’s operating budget if it is forced to sell additional debt for the new five-year capital program, Willens said. The MTA would need to increase fares and tolls by 8% to repay $10 billion of additional debt without a new funding source, he added.
“It’s important for our funding partners — federal state and city — to really help fund the next capital plan,” Willens said. “It can’t be done from fares alone.”
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