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Comment by gthaman | Hacker News Reader

CTRL+F "debt" - nothing. CTRL+F "interest" - nothing.

Lets take a quick look at some numbers.

[1] "The result is a massive run-up in debt. Though the MTA spent only $848 million on debt service in 2004, according to RPA, it is projected to spend more than three times as much, $2.67 billion, in 2014. Debt alone will eat up 17.6 percent of the MTA’s operating budget by 2014; worse, RPA says that an alternative calculation shows the 2014 debt load at 23.1 percent of the operating budget."

[3] "By way of comparison, Syria has $30.1 billion in debt. Cuba has $28.9 billion. Twenty-eight other countries, from Ecuador to Jordan, Jamaica to Kenya, have less debt than the M.T.A."

[1] https://nyc.streetsblog.org/2011/09/07/where-does-your-fare-... [2] https://www.politico.com/states/new-york/albany/story/2015/0...

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This article is about why it is so expensive to build new infrastructure in NY. Debt service comes out of the operating budget.

If the question at hand was why the MTA provides such poor ongoing service with such a high budget, debt service would be part (but only part) of the answer. However, in terms why construction costs are so horrifically expensive as compared to literally anywhere else in the world, debt service plays no role in answering that question.

Debt is part of the financing of a project, not a 'challenge in building them'.

Comparing the debt of one group to an arbitrary other doesn't help so much, because what matters are interest rates, revenue to pay principal and interest rates, stability of tat revenue, other covenants, penalties, and of course cost of capital.

FYI Jordan, Jamaica and Kenya would carry a lot more debt if they possible could.

If some agency in NYC has a huge amount of debt from credible lenders it might be a 'good sign' they they are actually worthy of it.

FYI, I think the article does a good job at it:

"“People will say to me, ‘Why are MTA construction costs so high?’ And the answer is ‘Everything,’ ” says Julia Vitullo-Martin, a senior fellow at the RPA and co-author of its 2018 report comparing New York’s construction costs to those in peer cities. “Every factor you look at is flawed the way the MTA does business, from the first step to the end.”

I love this level of candor in people who are willing to speak publicly.

I can only agree with her answer.

When I compare (software) projects amongst different locations I worked at, things vary so so much. Making those comparison somewhat misleading at best.

I don’t see how comparing the costs between systems that have so different requirements, labor markets, legacy infrastructure, regulamentation agencies, can help much but I am not an expert on this subject by far.

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