Audit slams Port Authority; governors say agency’s record of ‘historic failure’ must be reversed

TRENTON – After a long-awaited audit of the Port Authority of New York and New Jersey criticized the agency for allowing World Trade Center costs to balloon out of control, state lawmakers weighed in with criticism.

A.P. reported today that Navigant Consulting said the project is now expected to cost $14.8 billion, 35 percent more than the last estimate, of $11 billion, in 2008. The audit said that costs have soared by nearly $4 billion in four years.

The audit went on to call the Port Authoritya “long standing bureaucracy that is inherently resistant to change, lacks effective collaboration between its strategic businesses, and would benefit from the effective development of a shared support services function.”

Govs. Chris Christie and Andrew Cuomo had ordered the audit after the agency’s board voted to raise tolls in August.

In a joint statement, the governors today said:

“The interim report released today on operations of the Port Authority of New York and New Jersey describes an agency which failed to exercise proper oversight, control costs and budget transparently. The report’s Executive Summary describes an agency that is ‘challenged and dysfunctional,’ and where poor management ‘obscured full awareness of billions of dollars in exposure’ to the Port Authority.  

“Cause for further concern is the report’s conclusion that the WTC gross project costs, last publicly reforecast at $11 billion in 2008, have since grown a staggering $3.8 billion to $14.8 billion, at a minimum.  Similarly, the report finds capital planning is plagued by management deficiencies that have resulted in a doubling of debt in 10 years as the agency drifted from its core responsibility as a transportation infrastructure organization.

“Coupled with the consultant’s assessment of the impact of ‘add-on’ compensation for agency personnel – an institutionalized practice that has contributed to an unacceptable 19 percent increase in gross compensation in just five years – the interim report makes clear that wide-ranging reform is long overdue.

“This record of historic failure must be reversed.  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 for the health and growth of our overlapping economies.  

“We will demand nothing short of the agency’s implementation of comprehensive recommendations and reform to achieve this critical mission.” 

Among other things, the audit said that the Port Authority is “a challenged and dysfunctional organization suffering from a lack of consistent leadership, a siloed underlying bureaucracy, poorly coordinated capital planning processes, insufficient cost controls and a lack of transparent and effective oversight of the World Trade Center program that has obscured full awareness of billions of dollars in exposure to the Port Authority,” according to the A.P. report.

“This audit confirms what we have been saying all along,” Assemblywoman Valerie Vainieri Huttle, (D-37), Englewood said in a release.  “It’s time to change the way the Port Authority does business.”

Last week, the Assembly Transportation Committee released a package of bills that aim to obtain greater transparency at the Port Authority. The bills also need to be passed by New York’s state lawmakers.

Previous coverage:

Port Authority bills clear committee

Audit slams Port Authority; governors say agency’s record of ‘historic failure’ must be reversed