NY Governor fears more World Trade Center building delays

By Joan Gralla

NEW YORK, June 12 (Reuters) - New York Gov David Paterson has forecast that the World Trade Center rebuilding could fall further behind schedule and cost more than now anticipated.

The Democratic governor in a statement on Wednesday asked the land-owning agency to reassess all estimates to determine if they "are reliable and achievable."

Paterson added: "If they are not, I would like an evaluation of what viable alternatives exist to get the project back on track or whether we need to alter our targets to meet the reality on the ground."

It was only last month that Paterson, who replaced former Gov Eliot Spitzer on March 17, tapped a new executive director, Chris Ward, for the Port Authority of New York and New Jersey, whose control he shares with Democratic New Jersey Gov Jon Corzine. A Corzine spokesman had no immediate comment.

Feuds over the insurance money needed to finance construction, spiraling costs, and repeated clashes over security and designs have all stalled work on the site where nearly 3,000 people died in the September 11, 2001 attacks.

Deputy Mayor for economic development, Robert Lieber, said Paterson's call for a "comprehensive assessment of the dates and dollars for the reconstruction is the right move."

Lieber also urged the agency to issue periodic updates on the projects, and hold regular meetings with all stakeholders.

The list of stakeholders includes the city and state, the World Trade Center Memorial Foundation, the Metropolitan Transportation Authority, the state mass transit agency, Silverstein Properties, and Goldman Sachs (GS.N), whose new headquarters will lie just west of the site.

Separately, the Port Authority said the giant dike that keeps the site from flooding now will not be finished for one tower until August, a delay that entitles Developer Larry Silverstein to a $300,000 a day penalty.

The Port Authority had promised to finish the retaining wall for Tower 2 by June 30.

In 2006, Silverstein and the agency signed a new accord, which set the late penalties, and requires Silverstein to build Towers 2, 3 and 4. The Port Authority will build the Freedom Tower, the biggest and symbolically most important skyscraper.