By Paul Berger 

The Metropolitan Transportation Authority on Wednesday awarded a $1.8 billion contract to expand the Long Island Rail Road, even as its commissioners raised concerns about runaway capital-project costs and an increasingly strained operating budget.

A consortium including construction firms Dragados USA and CCA Civil will build a third track along a 10-mile stretch of the LIRR's heavily used Main Line corridor between Floral Park in Queens and Hicksville on Long Island.

The expansion would increase capacity on five LIRR branches that carry about 40% of the rail line's 300,000 weekday passengers, the MTA says. It also would improve service and reduce disruption systemwide, it adds.

It would allow reverse commuting from New York City to Long Island. Currently, trains only travel in one direction during peak hours.

The projected budget for the project is $2.6 billion, up from $1.5 billion two years ago.

Several board members raised concerns about the rising cost of MTA capital projects, though only one didn't vote in favor of the contract. Commissioner James Vitiello, a representative of Dutchess County, opted to abstain from approving the deal even though he said he supported the project.

Mr. Vitiello cited as a concern the long-stalled East Side Access project to build an LIRR station beneath Grand Central Terminal.

That project, slated to open in late 2020, is seven years behind schedule. Costs have risen from $4.3 billion to $10.2 billion. Mr. Vitiello said there are signs the budget may rise again.

Several commissioners said the MTA needs to do a better job of securing additional revenues from businesses and municipalities that benefit from such large projects.

Andrew Saul, a representative from Westchester County, said, "I feel these massive capital projects have put us in a really giant hole."

During the debate, commissioners raised fears about signs of weakening revenues from local taxes and about federal tax reform that could hurt the region's economy and make it more difficult for the MTA to refinance its borrowing.

Even so, they approved a roughly $16.5 billion budget for 2018, an increase of 4.6% from 2017.

The budget includes $428 million toward an emergency plan announced by MTA Chairman Joe Lhota this summer to improve subway performance. The initiative calls for hiring 2,700 workers and increasing maintenance and upgrades of tracks, signals and other equipment.

Funding for the plan, which is projected to run through 2021, remains unclear.

Mr. Lhota, an appointee of New York Gov. Andrew Cuomo, said New York state will pay half. He has demanded that New York City fund the remainder, but New York City Mayor Bill de Blasio has so far refused.

Mr. Lhota said that the emergency plan will be scaled back if full funding isn't secured.

New York City's four appointees to the MTA board were the only commissioners who voted against the budget. City Transportation Commissioner Polly Trottenberg, said: "We are voting on an operating budget at a time when our fiscal situation, city, state, nationally is very much uncertain."

Lawrence Schwartz, a board appointee of Mr. Cuomo, acknowledged the fiscal uncertainty. Despite that, "the governor of our state has been unwavering in his commitment to fund at least half of the subway improvement program," he said.

Write to Paul Berger at Paul.Berger@wsj.com

(END) Dow Jones Newswires

December 13, 2017 19:01 ET (00:01 GMT)