Jay Walder has tendered his resignation as MTA CEO and Chair, effective October 21, 2011, the MTA announced this afternoon. Walder, who has served as head of the MTA since October 2009 and has led a remarkable effort to trim internal costs and improve the authority’s bureaucracy, will be joining the joining the MTR Corporation — a publicly-traded company based in Hong Kong that operates rail services in Asia and Europe — as Chief Executive Officer and a member of the Board of Directors.

Walder’s controversial Golden Parachute provisions will not be triggered as he is ostensibly departing the MTA on his own. This is, however a big blow to the authority, and one that seems to be a complete surprise to those in both the transit community and the upper echelons of New York government.

“I want to thank Governors Cuomo and former Governor Paterson for the honor of serving the people of New York State,” Walder said“The MTA’s transportation system is the foundation of the metropolitan region and we are fortunate to have thousands of dedicated men and women who work so hard to provide these critically important transportation services to millions of people each and every day. I believe that we have accomplished quite a lot in a short period, with the support of two Governors, the Mayor, a hard-working Board and many others.”

In an internal memo circulated to his colleagues at the MTA, Walder, a 52-year-old New York native, said he made this decision with “mixed emotions” but has faith that the MTA will continue on its slow upward trajectory. “I believe that this path that we have collectively set forth on together as a company, to amke every dollar count, deliver the best possible customer benefit is one that will serve the MTA and the region well today and in the future,” he wrote. Sources tell me that he sent a similar note to the MTA Board.

Walder will leave New York to head up the Hong Kong-based MTR Corporation which operates commuter rail in Hong Kong and intercity rail services from Hong Kong to Beijing, Shanghan and Guangdong in China. It is also building new rail lines in Hong Kong and China and operates rail systems in London, Stockholm and Melbourne. MTR consults in Asia, Australia, the Middle East and Europe as well and has become a leader in transit-oriented development. The company had total revenues of $3.8 billion and $1.1 billion in underlying profit.

“This is an exciting opportunity for me to lead a publicly-traded, multi-national corporation with a broad set of business activities,” Walder said. “The MTR Corp. is widely recognized for its world-leading rail systems and the innovative property developments that are built around stations.”

MTR’s revenue figures, as The Wall Street Journal posited, may have been a motivating force. According to The Journal, the current CEO of MTR made approximately $1.78 million in 2010, not including stock options. Walder makes $350,000 as head of the MTA with a housing subsidy.

During his two years as CEO and Chairman, Walder has led a successful turnaround in the way the MTA does business. He has cut nearly $1 billion in annual expenses from the MTA’s operating budget and recently unveiled a plan that would cut capital expenses by a total of $4 billion over five years. These savings helped stave off financial doom for the MTA. Meanwhile, Walder pushed through a customer service-focused agenda that included train countdown clocks, real-time bus tracking projects, a commitment to open information and two redesigns of the website. He was also amidst a project that will see the MetroCard phased out within the next few years.

“In challenging times, we brought stability and credibility to the MTA by making every dollar count, by delivering long overdue improvements and by refusing to settle for business as usual,” Walder said.

My Take: For the MTA, Timing Could Not be Worse

As the news sinks in, I’m finding little good in this announcement. The next few months are going to be of paramount importance for the MTA as it must figure out how to close a $10 billion capital funding gap and negotiate a new contract with the Transport Workers Union Local 100. Walder had been a vocal part of both of those efforts, and it appears as though he likely won’t be around to see either through. Gov. Andrew Cuomo will likely appoint an interim CEO at a time when the authority can ill afford to suffer through turmoil at the top.

I also can’t help but feel as though Walder is leaving before the job is done. The MTA is very much in transition as it has tried to cope with an austerity budget, major capital projects and technological innovation. The job isn’t done yet though as funding isn’t in place and projects are in flux. Will the next leader push through countdown clocks and better fare payment technologies? What will happen with the bus tracking projects and the authority’s commitment to providing datasets for developers? What happens with the labor negotiations and the capital budget wrangling?

Walder was the best and most knowledgeable MTA head during the past few decades, and his departure is clearly a blow to the MTA and those fighting for better transit in the New York City area.

Politicians, Advocates Respond: ‘An inopportune time’ for a departure

As the news develops, transit advocacy groups and New York State politicians are readying their statements. “MTA Chairman and CEO Jay Walder has been an effective, innovative leader. He helped restore the agency’s credibility and changed the way it does business, finding billions of dollars in savings during his tenure,” Kate Slevin, Tri-State Transportation Campaign Executive Director, said.” But his departure comes at an inopportune time. New York’s regional transit system faces a capital funding gap that could be as large as $9 billion, and which needs to be addressed in the coming months. Straphangers are at risk. Governor Cuomo must quickly fill this vacancy with an effective leader who has a deep understanding of the transit system.”

Paul Steely White, executive director of Transportation Alternatives, echoed those sentiments. “Jay Walder steered the MTA through its toughest challenges since the bad old days of the 70s,” he said. “Facing a daunting fiscal situation brought on by the governor and state legislature’s repeated budget raids, Walder kept our trains and buses serving millions of New Yorkers 24 hours every day. His work to bring Select Bus Service and Real-Time updates to transit riders is bringing New York City’s transit system into the 21st Century and will help keep the city and region competitive with other global leaders vying for business,

talent and capital. Mr. Walder’s commitment to the necessity of transit in the lives of New Yorkers has set a high bar, and his successor must come with equal leadership to steer the MTA and the region through the rough terrain ahead.”

The RPA put out its perfunctory statement as well: “Jay Walder has done a superb job at the MTA during the past two years of extreme economic challenge. New York will miss his deep knowledge of and passion for the transportation network that makes the region’s economy possible. That network, of course, is bigger than any one individual. We have every expectation that Governor Cuomo will appoint an outstanding transportation professional to replace Jay and continue his work on modernizing and investing in the future of the subways, buses, commuter railroads, and river crossings.”

While speaking with Albany reporter Liz Benjamin, Senator Martin Golden bemoaned Walder’s departure. Golden called it “a loss to the city and state of New York” but doesn’t believe he was pushed out, sentiments I’m hearing from inside the MTA as well. “I think he was just hitting his stride,” Golden said, “and got an offer he couldn’t refuse. It’s unfortunate for us.”

Governor Cuomo, who will have the chance to appoint a successor, issued his own statement: “For nearly two years, Jay Walder has shown true leadership at the helm of the MTA and been a fiscally responsible manager during these difficult financial times. Riders of the MTA are better off today because of Jay’s expertise and the reforms he initiated will benefit all for years to come. Jay’s departure is a loss for the MTA and for the state, but I thank him for his service and wish him the best in his future endeavors.”

Mayor Michael Bloomberg added his take: “Jay Walder is a world-class transportation professional and any city in the world would have been lucky to have him. He set a new course for the MTA during an extremely difficult period when the agency was not given the resources required to meet the City’s needs. He expertly shepherded major projects like the 7 line extension and new bus rapid transit lines, and by embracing new technology, he made significant improvements to the customer experience – from gateless tolling on bridges to countdown clocks in subway stations – that the public will appreciate long after his departure. I was proud to work with him on these and many more projects. He is a first-rate leader with big ideas, and I will miss collaborating with him. He is the type of person we can’t afford to lose, and his departure is a real loss for New York City, the metropolitan region, the state and the country.”

James Vacca, the head of the City Council’s Transportation Committee, didn’t mince his words. “This resignation comes at a crucial time. A year after the worst service cuts in the MTA’s history and yet another fare and toll increase, the most serious challenges for straphangers may still lie ahead,” he said. “While Chairman Walder deserves credit for taking on many structural issues that previous MTA leaders had delayed for a tomorrow that never came, the MTA continues to face a $250 million operating gap and a capital budget that runs out January 1. It’s getting harder and harder to do more with less, and the MTA needs someone at the helm not only who understands the role mass transit plays in the lives of everyday New Yorkers but who is prepared to get to work on day one.”