MTA: Bid too high for Grand Central LIRR terminal

BY STEVE RITEA | steve.ritea@newsday.com

8:26 PM EDT, October 22, 2007

A single bid to help carve out space for a new Long Island Rail Road terminal under Grand Central Terminal came in $200 million higher than anticipated, officials with the Metropolitan Transportation Authority said Monday, leaving them to pursue whether that could delay the plan.

Also Monday, MTA officials said tax revenues the agency relies on to help fund its operations budget may be coming in lower than they had projected. Predicting a deficit next year, the MTA has already floated a fare hike proposal and is hosting a series of public forums next month, including one Nov. 7 at Farmingdale State College.

At the same time, the agency is using a separate capital budget for a series of ambitious projects like East Side Access, which will bring up to 24 LIRR trains an hour into Grand Central during peak periods.

Mysore Nagaraja, president of capital construction for the MTA, said the job of clearing a massive space under Grand Central had been estimated to cost $670 million. Instead, the bid came in closer to $870 million and "we were not happy with the number," he said.

The sole bid was submitted by a joint venture between Judlau Contracting Inc. of College Point and Dragados, a Spanish firm, which last year were awarded a separate $428-million contract to tunnel under Manhattan in preparation for the LIRR's expected 2013 arrival at Grand Central.

Nagaraja said an uncommonly large number of construction projects in the region and even worldwide may have led to less interest from bidders. "They're not hungry," he said.

Nagaraja said the job may be split into several smaller contracts and he's exploring whether a new call for bidders could delay the project beyond its expected 2013 completion.

Also, MTA finance chief Gary Dellaverson said new estimates from the state show the agency is scheduled to receive about $70 million less than the $330 million expected next year in revenue from various state taxes.

The MTA's revenues from a separate stream of real estate taxes dropped sharply in October, down $47.6 million from September. In anticipation of a downward trend, the MTA has already forecast $250 million less in real estate revenues for 2008 than this year, Dellaverson said.