Parsons Brinckerhoff said Wednesday it has been awarded a contract by the Federal Transit Administration (FTA) to develop and document a transit asset management framework and implementation guide that will support the FTA’s State of Good Repair and Asset Management Programs.
The FTA estimates there is a nationwide backlog of $50 billion to $80 billion in deferred maintenance and replacement needs, the vast majority of which are rail-related.
PB is going to decide what projects are necessary and how to build them, and will also be able to bid on design and construction. Naturally, the numbers it will come up with are going to be favorable to its private interest; the common interest is not profitable for the company.
This is especially egregious in state of good repair (SOGR) money, which is often a series of rent-seeking scams. Agencies do not impartially judge how much money they need for maintenance and then ask for it. Instead, they massage the numbers based on whether the political mood is such that they could get more or less money. In 2005, the Amtrak board fired President David Gunn for insisting on competing SOGR before attempting to move to profitability; by 2009, when the stimulus provided plenty of money, Amtrak suddenly remembered it had deferred maintenance and came up with the $10 billion NEC Master Plan, essentially SOGR plus a few small upgrades.
A few agencies, such as New York City Transit, treat SOGR seriously (this was thanks to Richard Ravitch and David Gunn) and push for it even when the politicians want something different; most just use it as an excuse to justify high capital costs without anything to show for it. Look again at Amtrak, which even as it cries poverty about SOGR is trying to portray its finances as very good, for example listing a farebox recovery ratio that, unlike the practice at peer national railroads, excludes depreciation and interest. Heads Amtrak is profitable and competent and should get what it wants, tails it has a backlog of deferred maintenance and needs more money.
This is more a political than technical problem, but normal political advocacy is not going to help. Politicians can get credit for massive overhauls or new infrastructure involving ribbon cuttings; they won’t get credit for adding to the design and management budget, no matter how much money it will save in the long run.
Therefore, politicians who care more about being seen as fiscally conservative than about saving money force agencies to cut their in-house expertise. Instead, agencies outsource everything to consultants; this can work sometimes, but the people who would oversee them have been cut, so that there’s nobody in charge who’s loyal to the interests of the agency or the public. As a result, nobody in the US knows anything about good practices for rail infrastructure construction except people with the mother of all conflicts of interest, and nobody knows anything about rolling stock except New York City Transit, which designs rolling stock in-house or buys designs and prototypes separately from revenue equipment.
The agencies have bought into this system, since they share in the overly expensive designs and must defend them. Madrid doesn’t separate design from construction just because of interest conflict issues; the reason stated by Madrid Metro CEO Manuel Melis Maynar is that changes are unavoidable, and a construction crew uninvolved with the original design would be less stubborn about sticking to the blueprint. Since such separation does not exist in the US, and on the contrary the people currently in charge are used to the system so much that they bring up design/build contracts as an improvement, agency inertia is directed toward making the agency even less competent.
California HSR is perhaps the worst example of this. The HSR Authority consists of nine politicians, overseeing a skeletal crew of professionals (I believe there are only six engineers/planners). Unsurprisingly, the
Legislative Analyst’s Office (LAO) Peer Review Group wrote a peer-review report accusing the HSRA of having no expertise in project management or even in negotiating a good PPP so that the private sector could do it. Even more unsurprisingly, hiring more staff to bolster an agency that’s currently incompetent is risky and nobody wants to be responsible for either potential delays or spending good money after bad, despite the possibility of large cost savings in the medium and long runs.