Getting the private sector to help build a Second Avenue subway faster and cheaper might not be such a far-fetched idea.
Private firms could even operate the new line.
That’s what’s happening across the Hudson River in New Jersey.
NJ Transit is paying a private consortium headed by Raytheon $1.1 billion to design, build, operate and maintain a new 20-mile light-rail trolley service along the Hudson waterfront.
It’s the first privatized transit project of its kind in North America – although public-private business ventures are common in Great Britain and other parts of the world.
The $1.1 billion covers all the construction costs, building of the rail cars, plus a 15-year obligation to operate the service for an estimated 100,000 daily riders.
The consortium – called the 21st Century Rail Corp. – will also hire the employees to operate the trolley cars and maintain the tracks and infrastructure.
NJ Transit’s major role will be setting the fare for the service.
“We expect to save $300 million and five years in construction time over the life of the project,” said NJ Transit spokesman Ken Miller.
“Construction will go a lot smoother with one contractor. For example, the contractor was able to start segments of construction before even finishing the design.”
That would have never happened if one contractor wasn’t responsible for all aspects of the project, he said.
Miller said the consortium has an incentive to build a first-rate project because it will have to provide the trolley service and maintain the infrastructure.
The consortium is financially and legally liable to cover all cost overruns above $1.1 billion.
“We’re doing the design and construction simultaneously. That’s our risk,” said John Johnson, a Raytheon executive who heads 21st Century Rail Corp.
The Japanese firm Kinkisharyo is building the electrified trolley cars.
The first section of the line, connecting Bayonne with Jersey City, is slated to open next spring. The light rail trolley will next run to Hoboken and ultimately to Ridgefield by 2010.
Former Metropolitan Transportation Authority Chairman Robert Kiley said the New Jersey privatization experiment should be studied with a full-length Second Avenue subway in mind.
“It’s a very appealing idea,” said Kiley, now chief executive of the New York City Partnership and Chamber of Commerce, the city’s largest business advocacy group. “It is a model worth applying in New York – if the opportunity presents itself.”
He added, “There’s no reason why we have to be the only hyper-conventional region in the country … I mean franchising out and outsourcing is not new to the MTA or the Transit Authority. It’s just that people have never thought of doing this for a whole development.”
He noted that private firms financed and built the city’s original subway lines in the early 1900s.
But MTA spokesman Tom Kelly said the agency has not examined the NJ Transit venture.
And there would be fierce opposition from transit union leaders, who fear a loss of jobs and influence.
“We believe in contracting in, not contracting out. All hell would break out if they did that here,” said Willie James, president of the Transport Workers Union Local 100, which represents 30,000 transit employees.