Metropolitan Transportation Authority estimates $1B hit from Sandy after insurance
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The Metropolitan Transportation Authority, which operates New York City's subway system along with other trains, said it expects to be on the hook for nearly $1 billion for Superstorm Sandy-related losses.
MTA officials pegged initial economic loss estimates “slightly north” of $5 billion, according to a board meeting held Wednesday.
The losses are expected to be covered by a combination of insurance, federal programs such as the Federal Emergency Management Agency, and MTA resources.
Infrastructure damage to the MTA's subway and train systems were estimated to be $4.75 billion dollars, and operational damages were estimated at $268 million, officials said.
MTA has $1.75 billion of maximum insurance coverage for the infrastructure damage and standard FEMA reimbursement is about 75% of the loss, exposing the transit system to $950 million of damage that it will have to fund.
Officials anticipate “significant recoveries” from business interruption and extra expense insurance coverages and from FEMA reimbursements to address operational losses resulting from Sandy.
While MTA officials expect to receive monetary advances from its insurers and the federal government, final settlement of all submitted insurance claims may take two to three years, according to the board meeting.
MTA Chairman Joseph Lhota said riders of the MTA will not be hit with service cuts or fare hikes as a result of the $1 billion tab.
“The burden of Sandy will not be upon our riders,” Mr. Lhota said to reporters after the meeting. “I have an enormous amount of confidence in our federal government that we will receive a substantial amount of money to get us back to the condition of functionality we had the day before the storm.”
