July 21 (Bloomberg) -- Jay Walder resigned today as chairman and chief executive officer of New York’s Metropolitan Transportation Authority, the largest U.S. transit agency, to head MTR Corp., which runs the Hong Kong subway and other rail lines.
Since becoming MTA CEO in October 2009, Walder, 52, installed electronic signs in subway stations to notify riders of approaching trains and replaced some outdated signal systems.
He also slashed 3,500 jobs and curbed overtime pay over 18 months to cut costs by $525 million. More funding pressure came in March, when the state lowered its contribution to the MTA to help balance its budget.
“In challenging times, we brought stability and credibility to the MTA by making every dollar count, by delivering long-overdue improvements and by refusing to settle for business as usual,” Walder said in an MTA news release.
The MTA said Walder’s efficiency measures will yield $3.8 billion in cumulative savings by 2014, partly from renegotiating contracts with suppliers and health-care providers, and by consolidating functions of the MTA’s rail, bus and subway lines, and several bridges and tunnels. The MTA, which had a $12.1 billion budget in the last fiscal year, will release its preliminary budget next week.
Walder’s challenges included a $9 billion capital-budget deficit that threatens to stall construction of the Second Avenue subway on Manhattan’s Upper East Side and a rail link from Long Island to Grand Central Terminal.
In a report July 20 on the five-year capital program, Walder announced more cuts, including slashing administrative payroll expenses by 15 percent and changes to how the agency conducts track repairs. The moves will generate $4 billion in savings, reducing the cost of the capital program to $24.2 billion, he said.
“He set a new course for the MTA during an extremely difficult period when the agency was not given the resources required to meet the city’s needs,” Mayor Michael Bloomberg said in a statement. “He is the type of person we can’t afford to lose.”
Walder, who grew up in the Rockaways section of Queens, worked for the MTA for 12 years starting in 1983. He was executive director and chief financial officer from 1993 to 1995 before leaving to head London’s transit system, where he was credited with spearheading its largest investment since World War II. He returned to the MTA in 2009.
Walder’s resignation will be effective Oct. 21, and he will assume his position as MTR’s CEO Jan. 1. The publicly traded company 76 percent-owned by the Hong Kong government operates commuter and rail systems linking Hong Kong with Shanghai and Beijing and provides train service in London, Stockholm and Melbourne.
It began a worldwide search for a new leader after CEO Chow Chung Kong, 60, said in December he would retire at the end of this year, when his contract expires.
“Jay Walder has shown true leadership at the helm of the MTA and been a fiscally responsible manager during these difficult financial times,” New York Governor Andrew Cuomo said in a statement.”
In a July 19 interview at a conference sponsored by Crain’s New York Business magazine on New York City’s future, Walder dismissed reports he might quit. He told reporters he had “no intention of leaving” and would remain in 2012.
Walder’s spokesman, Jeremy Soffin, said today the MTA chairman didn’t want to answer the question honestly out of concern his departure would be revealed prematurely.
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