Research
Completed Project
Impacts of Deferred Investment on Capital and Operating Budgets
April 1st, 2004 - December 31st, 2004
Principal Investigators
Institutions
Sponsors
This project did not receive matching funds through the University Transportation Centers program.
Reports
Final Report: 
Impacts of Deferred Investment on Capital and Operating Budgets: Executive Summary
Final Report:
Impacts of Deferred Investment: Discussion Document
Final Report:
Impacts of Deferred Investment: Case Studies for the Metropolitan Transportation Authority
Project publications may be ordered by contacting Dr. Ellen Thorson.
Project Overview
The research team worked with staff across all MTA operating agencies to analyze the impacts of deferring or canceling six projects in MTA’s propose 2005-09 core capital program. The objective was to come up with a clear methodology and means for communicating the fiscal prudence of these projects to policymakers and the public.
The projects we examined included:
- LIRR Railcar Lifecycle Maintenance Investments
- Jamaica Bus Depot Replacement
- Cross Bay Bridge Deck Rehabilitation
- Verrazano Bridge Deck Replacement
- MNR Commuter Rail Power Distribution
- LIRR Commuter Rail Concrete Tie Installation
The research team broke down the net budgetary impact of deferring these projects into five components, to the extent that supporting data was available:
- A “reliability tax” – Routine and emergency repairs become increasingly frequent as capital reinvestment is deferred (e.g. bridge deck rehabilitation).
- An “efficiency tax” – Work is needlessly complicated or resources wasted by obsolete facilities, equipment, and spatial constraints (e.g. bus and rail car maintenance facilities and substation replacement).
- A “redundancy tax” – Extra requirements for reserve capacity (larger fleet spare ratios, additional crews) are needed to keep the system operating at a given performance level (e.g. rail car lifecycle maintenance).
- A “capital tax” – The degree of disrepair accelerates over time, or repeated capital investments that otherwise might be avoided remain necessary (e.g. bridge deck rehabilitation and concrete tie replacement).
- Cost escalation – Inflationary pressures that increase the cost of a project over time, even if there is no change in its scope.
