The New York Metropolitan Transportation, operator of the biggest U.S mass-transit system, said passengers won’t be responsible for paying for damage from superstorm Sandy.
The MTA, which runs the New York City region’s subways, buses, commuter railroads and some bridges and tunnels, may borrow as much as $4.8 billion in short-term notes beginning next year to rebuild infrastructure damaged by the Oct. 29 storm, officials said today after a board meeting in Manhattan. The agency would pay down the debt with reimbursements from insurance companies and the Federal Emergency Management Agency.
“The burden of Sandy will not be upon our riders,” Chairman Joseph Lhota said at a news briefing. “I have an enormous amount of confidence in the federal government that we will receive a substantial amount of money to cover what’s necessary to get us back to the condition of functionality the day before the storm.”
Even though they have restored most transit service, MTA officials are still surveying Sandy’s damage, the worst the New York subway system has seen in its 108-year history. Floodwaters from a tidal surge inundated rail stations and tunnels, coating electrical and communications equipment with corrosive saltwater. One subway station, South Ferry in Manhattan’s southern tip, was totally submerged and may alone cost $600 million to rebuild.
Officials said Sandy’s almost $5 billion estimated price tag doesn’t include improvements that would protect against damage from future storms. They declined to estimate how much such an undertaking might cost.
FEMA should reimburse at least 75 percent of the agency’s losses, though the funds may take years to arrive, Chief Financial Officer Robert Foran said. He pegged the infrastructure damage at $4.75 billion and operating losses incurred while the system was shut down, including lost revenue and increased operating costs, at $268 million.
Insurance payments may cover as much as $1.1 billion in damage costs, he said. Should FEMA cover only 75 percent of the remaining bill, the agency could be on the hook for as much as $950 million, according to the MTA.
Debt service on as much as $4.8 billion in short-term anticipation notes may reach $125 million through 2015, and will be paid for with savings from internal cost cutting, Lhota said. The agency won’t reduce service, boost planned fare and toll increases, or implement them sooner, he said.
The strategy for how to pay for Sandy was unveiled as part of an updated four-year financial plan, which board members are set to approve next month. It projects the agency to finish 2012 with a $26 million cash balance and estimates deficits of $333 million through 2016, down from its $347 million estimate presented in July.
The MTA has about $31 billion in long-term debt.