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New York slashes £2.45bn from its transport programme

New York State has announced it will cut $4bn (£2.45bn) from its five-year capital programme this week originally worth £16bn.

The savings are set out in the report “Making Every Dollar Count in Capital Program”. The savings from a £1.2bn cut in the 2010-2014 capital budget programme, and a further £1.2bn from “finding better ways to deliver projects”.

Last April, the State’s Capital Program Review Board approved our revised 2010-2014 Capital Program, which called for £16bn of investments over five years.

The programme included a £1.2bn cost reduction that was achieved by reducing rolling stock costs, shifting to a component-based station rehabilitation program, and sharing shop space across agencies.

Today’s announcement details a series of strategies that will allow us to save an additional £1.2bn, reducing the cost of the program to £14.8bn.

“The critical importance of the MTA’s (New York’s Metropolitan Transportation Authority) capital program to protecting the transportation system and creating New York jobs doesn’t excuse the need to implement it as efficiently and effectively as possible,” said MTA chairman and CEO Jay H. Walder.

“We cut £1.2bn from our Capital Program last year by planning our program more effectively. Today I’m committing the MTA to doubling the savings we’ve achieved in our Capital Program to £2.4bn, not by deferring vital projects but instead by finding better ways of delivering benefits.

MTA said it is working internally to reduce costs and externally to help its contractors to do the same.

The report details actions underway to reduce administrative costs, eliminate cumbersome processes, leverage new technologies and ensure that management of the program is as efficient and effective as possible:

  • Slash Administrative Costs (£91.5M savings): MTA will reduce administrative payroll expenses by 15%, just as was done with its annual Operating Budget.
  • Create Project Approval Gates (£488M savings): MTA will review every capital project through approval gates at each stage of its development to ensure that the agency is moving forward at the lowest cost. This strategy, combined with a softer construction market, has already delivered savings of £488M.
  • Make Changes to Track Work (£182M savings): The MTA and its agencies are taking steps to overhaul the way employees and contractors perform work on tracks.
  • Change Rolling Stock Acquisition and Maintenance (£183M savings): MTA is reducing costs of buying and maintaining trains and buses by changing design specifications, increasing competition among suppliers, getting more life out of existing units, and embracing new technologies.

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