Continuing from last week’s post about signaling costs, here is what I’ve found about electrification costs.
Like signaling, electrification usually doesn’t make the industry press, and therefore there are fewer examples than I’d like. Moreover, the examples with concrete costs are all in countries where infrastructure costs are high: the US, Canada, the UK, Israel, New Zealand. However, a check using general reported French costs (as opposed to a specific project) suggests there is no premium in Israel and New Zealand over France, even though both countries’ urban rail tunneling projects are more expensive than Parisian Metro and RER extensions.
In the UK, the recent electrification project has stalled due to extreme cost overruns. Finding exact cost figures by segment is difficult in most of the country, but there are specific figures in the Great Western. Financial Times reports the cost of the Great Western project at £2.8 billion, covering 258 km of intercity mainline (mostly double-track, some four-track) and what I believe to be 141 km of commuter rail lines in South Wales, working from Wikipedia’s graphic and subtracting the canceled electrification to Swansea. In PPP dollars it’s around $10 million per km, but the cost may include items I exclude elsewhere in this post, such as rolling stock. For reference, in the late 2000s the project was estimated at £640 million, but costs then tripled, as the plan to automate wire installation turned out not to work. Taking the headline cost as that of the last link, £1.74 billion, the cost is $6.1 million per km, but there have been further overruns since (i.e. the Swansea cancellation).
In the US, there are three projects that I have numbers for. The most expensive of the three is Caltrain electrification, an 80 km project whose headline cost is $1.9 billion. But this includes rolling stock and signaling, and in particular, the CBOSS signaling system has wasted hundreds of millions of dollars. Electrification infrastructure alone is $697 million, or $8.5 million per km. The explanations I’ve read for this high figure include indifference to best practices (e.g. electrification masts are spaced 50 meters apart where 80 meters is more common) and generally poor contracting in the Bay Area.
The other two US projects are more remote, in two different ways. One is California High-Speed Rail: with the latest cost overrun, the projected electrification cost is $3.7 billion (table 4, PDF-p. 14). The length of route to be electrified is unclear: Phase 1, Los Angeles to San Francisco with a short branch up to Merced, is a little more than 700 km, but 80 km of that route is Caltrain, to which the high-speed rail fund is only contributing a partial amount. If the denominator is 700 km then the cost is $5.3 million per km.
The other remote US project is Amtrak’s electrification of the New Haven-Boston segment of the Northeast Corridor in the late 1990s. Back then, the 250-km double-track route was electrified for $600 million, which is $2.4 million per km, or about $3.5 million per km adjusted for inflation.
In Canada, Toronto is in the process of electrifying most of its regional rail network. The current project includes 262 route-km and has a headline cost of $13.5 billion, but according to rail consultant Michael Schabas, this includes new track, extensive junction modification, unnecessary noise walls (totaling $1 billion), and nearly 100% in contingency just because on the original budget the benefit-cost ratio seemed too good to be true. In a 2013 study, the infrastructure cost of full electrification was estimated at $2.37 billion for 450 route-km in 2010 Canadian dollars. In today’s American dollars it’s about $4.5 million per km.
In France, a report that I can no longer find stated that a kilometer of electrification cost a million euros, in the context of the electrification of a single-track legacy branch to Sables d’Olonne, used by some TGV services. While trying to find this report, I saw two different articles claiming the cost of electrification in France to be a million euros per double-track kilometer. The latter article is from 2006, so the cost in today’s money is a little higher, perhaps as high as $1.5 million per km; the article specifically says the cost includes bridge modification to permit sufficient clearances for catenary.
In Israel, the majority of the national network is currently being electrified, and I’ve argued elsewhere for a completist approach owing to the country’s small size, high density, and lack of rail connections with its neighbors. The project has been delayed due to litigation and possibly poor contractor selection, but a recent article on the subject mentions no cost overrun from the original budget of 3 billion shekels, about $750 million, for 600 km of double-track. This is $1.25 million per km and includes not just wire and substations but also 23 years’ worth of maintenance. This may be similar to the Danish ETCS project, which has been severely delayed but is actually coming in slightly under budget.
In New Zealand, the one electrification project recently undertaken, that of the Auckland regional rail network, cost $80 million in infrastructure. This is New Zealand dollars, so in US terms this is closer to $55 million. The total length of the network is about 80 route-km and 200 track-km, making the cost about $700,000 per km. But the project includes much more than wire: the maintenance facility, included in the Israeli figure, cost another NZ $100 million, and it is unclear whether bridge modifications were in the infrastructure contract or tendered separately.
The big takeaway from this dataset, taking French costs as the average (which they are when it comes to infrastructure), is that Israel and New Zealand, both small countries that use extensive foreign expertise, do not pay a premium, unlike the US, UK, and Canada. In the UK, there is a straightforward explanation: Network Rail attempted to automate the process to cut costs, and the automation failed, creating problems that blew up the budget. Premature automation is a general problem in industry: analysts have blamed it for Tesla’s production problems.
In the US and Canada, the construction cost problem is generally severe. However, it’s important to note that at NZ$2.8-3.4 billion for 3.4 km of tunnel, Auckland’s tunneling cost, around US$600 million per km, isn’t much lower than Toronto’s and is actually slightly higher than the Bay Area’s. My explanation for high costs in Israel, India, Bangladesh, Australia, Canada, New Zealand, Singapore, and Hong Kong used to be their shared English common law heritage, but this is contradicted by the lack of any British premium over French costs in the middle of the 20th century. An alternative explanation, also covering some high-cost civil law third-world countries like Indonesia and Egypt, is that these countries all prefer outside consultants to developing public-sector expertise, which in the richer countries is ideologically associated with big government and in the poorer ones doesn’t exist due to problems with corruption. (China and Latin America are corrupt as well, but their heritages of inward-looking development did create local expertise; after the Sino-Soviet split, China had to figure out how to build subways on its own.)
But Israel Railways clearly has no domestic expertise in electrification. The political system is so unused to this technology that earlier this decade I saw activists on the center-left express NIMBY opposition to catenary, citing bogus concerns over radiation, a line of attack I have never seen in California, let alone the Northeastern US. Nor is Israel Railways good at contracting: the constant delays, attributed to poor contractor choice, testify to that. The political hierarchy supports rail electrification as a form of modernization, but Transport Minister Israel Katz is generally hostile to public transit and runs for office with a poster of his face against a background of a freeway interchange.
What’s more likely in my view is that Israel and New Zealand, with no and very little preexisting electrification respectively, invited experts to design a system from scratch based on best industry practices. I’m unfamiliar with the culture of New Zealand, but Israel has extensive cultural cringe with respect to what Israelis call מדינה מתוקנת (“medina metukenet”), an unbroken country. The unbroken country is a pan-first-world mishmash of American, European, and sometimes even East Asian practices. Since the weakness of American rail is well-known to Israelis, Israel has just imported European technology, which in this case appears easy to install, without the more particular sensitivities of urban tunneling (the concrete side of the electronics before concrete maxim). In contrast, the US is solipsistic, insisting on using domestic ideas (designed by consultants, not civil servants). Canada, as far as I can tell, is as solipsistic as the US: its world extends to Canada and the US; Schabas himself had to introduce British ideas of frequent regional rail service to a bureaucracy that assumed regional rail must be run according to North American peak-only practices.
All of this is speculation based on a small number of cases, so caveat emptor. But it’s fairly consistent with infrastructure construction costs, so long as one remembers that the scope for local variation is smaller in electrification and systems than in civil infrastructure (for one, the scope for overbuilding is much more limited). It suggests that North America could reduce its electrification costs dramatically by expanding its worldview to incorporate the same European (or Asian) companies that build its trains and use European (or Asian) standards.