Posted on Sep 3, 2020 at 8:30 a.m.
Icon of decoration and derivative products, will the New York subway map have to be reviewed? The public transport network of the city and the agglomeration threatens to have to reduce its service by 40% to cope with the financial hemorrhage due to the pandemic. “Even during the great crisis of the 1930s, the MTA had never suffered such a steep and lasting drop in attendance”, launched the CEO of the Metropolitan Transportation Authority (MTA), Patrick Foye, during a call for federal solidarity at the end of August.
At the end of June, when employees were allowed to return to the office in New York, the trains were still empty during rush hour. Traffic has since resumed, especially on the bus and river shuttles that cross the East River, but ridership on the metro is still 75% lower to what it was before the crisis.
Safety plan
While the contamination rate stay very low in New York for weeks and the metro has been stopped every night to clean the trains, remote work is still widely used, depriving the MTA of passengers who paid their monthly fee of 127 dollars. In total, its revenues are still 40% lower than they were before the crisis, representing a weekly shortfall of $ 200 million, said the public transport authority, controlled by the state governor. .
If the first bailout plan for the US economy, passed by Congress in March, has already awarded it nearly $ 4 billion, the credits have already been consumed. The battle is therefore being played out again in Washington, between Democrats, the majority in the House of Representatives, who have voted for a new federal aid plan, and the Republicans, the majority in the Senate, who do not want to validate it. The MTA estimates that it needs a total of $ 12 billion in federal funds to get through the crisis.
More interesting rate
Pending a political solution, the public transport authority was the second public organization, after Illinois, to sell debt securities to the Federal Reserve (to the tune of $ 450 million), at a rate of more interest to the agency than what the financial markets demanded.
But the MTA’s room for maneuver is increasingly limited: according to the Financial Controller of New York State, its debt service (the interest payable on its loans) was already to capture, before the impact of the pandemic, 22.5% of its income by 2023, against 16, 1% on average over the last ten years. The agency is weighed down by more than $ 45 billion in debt. And the financial rating agency S & P has already downgraded the operator several times.
First savings measures
To limit the bleeding, the agency has frozen hiring, and initiated the first savings measures, but it is still far from sufficient. It also postponed non-urgent work, froze the congestion charge project for motorists which was to finance part of it. On the revenue side, the MTA has started charging passengers in the 5,800 buses in the fleet again on August 31, and plans to increase its rates by 5% next year.
If it were to degrade its service, the MTA, whose trains go all the way to Long Island (LIRR) and north to New York (Metro North), would likely space out its trains rather than cut lines. The only optimistic note is that the drop in attendance made it possible to complete certain works in advance and under budget.
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