By Joan Gralla
(Reuters) - The lead agency rebuilding the World Trade Center on Thursday sought to counter criticism about the project's long delays and cost overruns, stressing the need for spending cuts after the project's price tag ballooned by billions of dollars.
The Port Authority of New York and New Jersey owns the 16-acre (6.5 hectare) World Trade Center site. A preliminary audit of the authority's operations and the World Trade Center costs released Tuesday raised the cost of rebuilding to $14.8 billion, up from 2008's $11 billion estimate.
"That report is not going to go on the shelf and gather dust," Port Authority Chairman David Samson told reporters.
He has directed the agency's senior management to soon recommend ways to slice the soaring cost of its workforce.
Overtime, unused vacation days and rewards designed to keep workers from leaving the authority have helped raise total compensation by 19 percent to $749 million in the past five years, the audit summary said.
The World Trade Center's redevelopment has stalled for years due to clashes over insurance proceeds, security concerns and design problems. The Port Authority has had seven executive directors since 2001, the officials said. The audit called the authority a "challenged and dysfunctional organization" with "a lack of consistent leadership."
"The last 10 years this agency has gone through have been completely destabilizing," said Scott Rechler, vice chairman of the Port Authority. "There's a new team in town."
The Port Authority will have to spend an extra $1.6 billion on the World Trade Center rebuilding if it fails to recover cost overruns for delayed projects such as the National September 11 Memorial and Museum. That would raise the cost of the World Trade Center complex to $16.4 billion.
"The expectation is that we will be recovering a large portion of those costs," Rechler said.
Port Authority officials said the project's 2008 price estimates should have been $1 billion higher because they left out expenses, such as tenant improvements for One World Trade Center, the tallest building on the site.
An extra $500 million was spent switching the order in which projects - the transit hub, four skyscrapers, and an underground parking garage - will be built so the memorial to the 3,000 people who died on September 11, 2001 would be finished in time for the tenth anniversary.
Even with that, the museum's opening has been delayed from September 11, 2012 due to a clash over how much it will cost.
The governors of New York and New Jersey share control of the Port Authority and the two states have had a total of nine governors since the air attacks. Each time a new governor is elected, progress tends to slow because the newcomer has to be brought up to speed on the complicated construction project.
A second study of the authority's capital planning and the way it prioritizes projects is being conducted by financial advisory firm Rothschild Inc and is due in June. This study is expected to recommend "financing alternatives," the officials said, including more reliance on the private sector.
(Reporting By Joan Gralla; Additional reporting by Edith Honan; Editing by Andrew Hay)