NYT: Port Authority Called ‘Dysfunctional’ as Trade Center Costs Rise

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Port Authority Called ‘Dysfunctional’ as Trade Center Costs Rise
Published: February 7, 2012

The estimated cost of rebuilding the World Trade Center has grown to at least $14.8 billion, up from $11 billion in 2008, according to an audit commissioned by the Port Authority of New York and New Jersey. The audit, which also examined the authority’s debt, called the agency “dysfunctional” and recommended changes in its management structure.

Much of the increase in the rebuilding costs was attributed to the authority’s commitment to open the National September 11 Memorial and Museum at the 16-acre trade center site in Lower Manhattan in time for the 10th anniversary of the attack, in September. That prompted the authority to accelerate the pace of construction and to shift the scope of work on the transit hub, whose cost has swelled to nearly $4 billion, from $1.9 billion in 2006.

The authority expects to be reimbursed for nearly half of the projected rebuilding costs by the federal government and from insurance proceeds. But the net cost to the authority could still be as high as $7.7 billion.

More broadly, the audit found that the authority was badly in need of a “top-to-bottom overhaul of its management structure.” Govs. Chris Christie of New Jersey and Andrew M. Cuomo of New York, who oversee the bistate authority, asked its board of commissioners to conduct a systematic review of the organization last year.

The authority brought in management and financial consultants from Navigant Consulting and Rothschild Inc., who, according to the audit, found the authority to be plagued by poor management that obscured the authority’s exposure to billions of dollars in additional project and labor costs.

“This record of historic failure must be reversed,” the governors said in a statement on Tuesday. “Steps have already been taken in the last two years, but much more must be done to restore the Port Authority to a responsible, highly transparent, well-managed organization focused on its core mission of maintaining and expanding our states’ shared transportation infrastructure.”

Mr. Christie, who has been especially critical of the authority, said the extent of the authority’s financial problems surprised him. Early in his term, in March 2010, the authority was forced to cut payroll and reduce its 10-year capital plan by $5 billion.

Julie Wood, a spokeswoman for Mayor Michael R. Bloomberg, said that “opening the memorial in time for the 10th anniversary was a key achievement in transforming the site of a global tragedy into a memorial that welcomes visitors from around the world.”

A version of this article appeared in print on February 8, 2012, on page A22 of the New York edition with the headline: Port Authority Called ‘Dysfunctional’ as Trade Center Costs Rise.