Construction Costs in the Nordic Countries

I write a lot about stereotypes in the context of construction costs. Countries with a reputation for corruption, such as Spain, South Korea, Greece, and Italy, often build subways very cheaply. Germany, for all its stereotype of efficiency, has high costs and some dysfunctional decisionmaking in what to build. Singapore, the self-styled most efficient government, pays its transport minister more than a million dollars per year to make excuses for why it has such high construction costs.

In the Nordic countries, the stereotype is correct: those countries have transparent, clean governments, and also build infrastructure cheaply.

Subway tunnels

All four mainland Nordic capitals have recent or ongoing metro expansion projects:

Stockholm just opened Citybanan, a regional rail connection including 6 km of tunnel with two deep stations in Central Stockholm and a 1.4 km bridge. The total cost was 16.8 billion SEK in 2007 terms, which in today’s PPP terms is about $330 million per km. It’s expensive for a suburban subway but not for regional rail.

Copenhagen is currently wrapping up construction on the fully underground, driverless City Circle Line. It is a circular but not circumferential line through city center. With repeated schedule slips, the budget is now 24.8 billion DKK, or $3.4 billion in PPP terms, which is $220 million per km.

Stockholm is expanding its metro in three directions. The fully underground extensions are together 19 km and 22.4 billion SEK, which in PPP terms is $130 million per km.

Helsinki has just opened an expansion of its metro westward to Espoo. This is a 13.5 km, 8-station fully underground line with a water crossing. After cost overruns, the current cost estimate is 1,186 million, which is in PPP terms $115 million per km.

Oslo recently opened a short connection, called Lørenbanen. It’s 1.6 km long and includes a single new station, for a total of NOK 1.33 billion, including 150 million for modernization of an existing connecting line. In PPP terms this is just $90 million per km in today’s money.

Other rail infrastructure

Sweden is investing heavily in mainline rail modernization. This includes a planned high-speed rail network connecting the country’s three biggest cities, which are spaced far apart and not on a line, requiring the total system to be 740 km long. The cost projection as of 2015 is 125 billion SEK, which in PPP terms is $14 million per km; I do not know if it is in 2015 prices or expected year of construction prices. This cost figure is comparable to that of Madrid-Barcelona and about half the at-grade norm for Europe.

Sweden is simultaneously investing in its mainline network, rather than neglecting it in favor of just HSR the way France is. A document from 2009 lists some of these on p. 38 based on the national plan of 2010-21, which did not include HSR. Of note, two full double-track projects are coming it at about $10 million per km or slightly more. In contrast, in Berlin, suburban S-Bahn double-tracking is around twice as expensive per the list on PDF-pp. 73-77 of the official wishlist.

In Denmark, a recent double-tracking project cost 675 million DKK for 20 km, or $4.6 million per km, even cheaper than in Sweden. The project includes not just double track but also an upgrade to 160 km/h.

Denmark is also investing heavily in electrification – see here for a list of projects, without costs. Costs for some of these projects are provided by Railway Gazette. The Fredericia-Aalborg line is 249 km and 4.7 billion DKK, the Roskilde-Kalundborg line is 56 km and 1.2 billion DKK, and the Esbjerg-Lunderskov line is 57 km and 1.19 billion DKK; all three lines are double-track. The longer line is $2.6 million per km, the shorter two are $2.9 million. This is much cheaper than in the core Anglosphere but more expensive than projects for which I have data in France, Israel, and New Zealand.

It’s cheap, but do people ride it?

Absolutely. Low construction costs can occur for projects that nobody has any reason to build, they’re so low-ridership, while some high-cost projects remain cost-effective if they have extremely high ridership, like Second Avenue Subway Phase 1.

In the case of the Nordic capitals, the recent extensions are well-patronized. The ridership prognosis for the City Circle Line is 289,000 per weekday, which means its cost is $11,800 per rider. The link above for the Stockholm T-bana extension projects 170,000 riders per day, which I believe means weekday rather than literal day; in that case, the projected cost per rider is $14,500. Løren’s ridership is 8,000 per day, which one former resident says is just boardings without alightings, which means total ridership is actually 16,000, making the cost of the line just shy of $9,000 per rider. And Helsinki’s West Metro is projected to get 100,000 daily riders, which means its cost is about $15,500 per rider.

Moreover, Stockholm’s overall use of public transportation is very healthy. The first 6 pages of this PDF comprise a report on modal split in Stockholm, out of all trips, not just work trips. In 2015, 32% of all trips in Stockholm County were by public transport, 38% were by car, 9% were by bike, and 16% were on foot. There had been a notable shift from cars to the other modes since 2004.

Converting this statistic to work trip mode share, the most stable metric and the one reported for the US, Canada, UK, and France, requires some additional work. However, where both statistics are available, they do provide some insight: in Hamburg in 2008, the overall car mode shares for all trips and for just work trips were similar (48% for work trips vs. 42% for all trips in the city, 65% vs. 63% in the suburbs); work trips alone exhibit much higher transit mode share (33% vs. 18% in the city, 16% vs. 8% in the suburbs), at the expense of non-motorized trips, which are disproportionately for short errands. It is very likely that the work trip public transport mode share in Stockholm County is comparable to Ile-de-France’s 43%, in a metro area one fifth the size.

Transit ridership in the other Nordic capitals is weaker, though still impressive for their size. Copenhagen lags in transit but has a strong bike network. Oslo had 118 million metro riders in 2017 (source, PDF-p. 31 – per same link you can also see the operating costs per car-km work out to just short of PPP$4, compared with a typical first-world range of $4-7), plus some additional commuter rail ridership (65 million nationwide, not just around Oslo). Helsinki had 63 million annual metro passengers in 2015, before the extension opened, and somewhat fewer additional commuter rail passengers, for a total ridership of perhaps 120 million. Both of the smaller cities have about the same metro area rail ridership per capita as New York, which is about fifteen times their size.

What does this mean?

Scandinavia has a reputation for efficient government at home as well as abroad. Right-wing pundits are far more likely to look for aspects of its governance that play to their desire for privatization, such as Sweden’s school voucher system or the contracting out of urban rail, than to assert that Scandinavia is a socialist failure. Unlike autocracies that have cultivated such reputation, the Nordic countries fully deserve this praise when it comes to building infrastructure cost-effectively. Sweden appears to consistently build rail for half the per-unit cost of Germany.

And yet, I don’t see that much praise for Nordic infrastructure. There are people in the English-speaking world making grandiose claims about how democratic countries need to be more like China and about how authoritarianism is just more efficient. I don’t know of any making that claim about how Nordic social democracy is more efficient, with its depoliticized state apparatus, multiparty elections, high levels of transparency, bureaucratic legalism, and near-universal collective bargaining.

Across all levels of public transportation investment, from high-speed rail down to routine track upgrades, we see inexpensive, efficient projects in the Nordic countries. They achieve high levels of rail usage without megacities in which only masochists drive, and keep expanding their networks in order to complete the green transition. Public transit managers in not just the laggard that is the US but also Germany and other relatively solid countries should make sure to study how things work in Scandinavia and how they can import Nordic success.


    • Alon Levy

      The “Scandinavia is so homogeneous” line is a generation out of date. Nowadays Sweden and Norway have higher foreign-born population shares than the US. Stockholm County specifically was 25% foreign-born 5 years ago, not far behind metro New York, and has gotten more diverse thanks to very high immigration flows.

      The interesting thing about people who peddle the homogeneous Scandinavia myth is, I never hear anyone peddle the same myth for Italy, which is far less diverse, and which I have praised for its low construction costs as well.

      • Michael James

        You are correct but also not quite …
        The thing is that it takes several generations before new immigrant groups really make an impact on their host countries and cultures. Especially at the higher echelons of political or institutional culture, and even then the long-established culture will usually prevail. That is, it is co-option rather than adoption/integration.
        So I doubt the recent immigration materially effects any of this, other than provoking population pressures needing to be solved on housing, employment, transport, health, eduction etc.

        • Alon Levy

          That really depends. Sweden is making genuine efforts at representation, with specific outreach to minorities by the Social Democrats, and a bunch of nonwhite politicians around. France and Sweden are both around 15% nonwhite; Sweden has two nonwhite ministers, both Middle Eastern, and France ~1.5, even though French minorities are way longer-settled and should have had more time for politicians to come up the ranks. It’s just that the pipelines in Sweden from which leaders are recruited are more diverse.

          Also, you can miss me with that population pressure line, pretty much any country would rather be Sweden and build more housing (which Sweden does) than Italy and have a massive pension crisis looming as the population ages.

          • Michael James

            OK, that is good and bodes well for their future. Though I still remain sceptical that it has any real impact on decision making or management of such projects.

            To your critique of the French I would add that most of those immigrants were already educated in a Francophone system, ie. Algeria, Tunisia & Morocco, so notionally it should be easier for them!
            OTOH, I have addressed your complaint previously and recall it was not as bad as you say. I don’t think “non-white” captures the story. ie. I think your “≈1.5%” is an underestimate (it would imply only about 10 deputies). However note that if your figure of 25% of Sweden being these immigrants then as a proportion it is not a million miles from France where the MENA immigrants represents about 8% of the population. Though note also that 27.5% of Seine-Saint-Denis (NE segment of Paris suburbs) were born outside of metro-France, and together with their (first-gen) children are about 60% of the department (and in absolute terms this will be more than all of Sweden …). Alas the protocol makes it very difficult to determine the ethnic makeup of the current French Assemblée. But as I pointed out in that old post (alas, I don’t have a link) there were some surprisingly high-ranking people from recent immigrant stock such as Najat Vallaud-Belkacem (minister in Valls govt), Fleur Pellerin (born Kim Jong-Suk in S. Korea) ditto, Rachid Dati, minister in Sarkozy government (a prototype Sarkozette) and a mayor of Paris-7.
            Dati is perhaps the most dramatic:

            Born in Saint-Rémy, Saône-et-Loire, to a Moroccan father, a bricklayer named Mbarek, and an Algerian mother, named Fatima-Zohra. She is the second child of twelve children in an impoverished family, and she spent her childhood in Chalon-sur-Saône in Burgundy.
            Even though Dati was raised in a devout Muslim environment, she attended Roman Catholic schools. She studied at the University of Burgundy, where she received a master’s degree in Economics, and at Panthéon-Assas University, where she received a Law degree.

          • Alon Levy

            I’m counting members of the cabinet, not the legislature. So in the original Philippe cabinet it was Laura Flessel-Colovic, with Gerald Darmanin as the half (he’s partly Algerian). But Flessel-Colovic resigned and was replaced with a white minister, a Romanian immigrant, so now it’s just Darmanin. In the current Löfven cabinet it’s Ardalan Sherekabi and Ibrahim Baylan.

            Sweden has way more immigration than France, but because France has had significant non-European immigration since the 1930s and Sweden has only had some since about the 1980s, the second- and third-generation immigrants in France make it about as diverse. Sweden is about 15% non-European immigrants and people born in Sweden to non-European immigrants; in France it’s also about 15% going by either the Swedish method or by directly asking people (the state of course doesn’t ask, but an independent group studying police brutality did).

            There’s a lot of diversity in the working-class and lower-middle-class parts of Ile-de-France, yes. The sort of racial integration I saw in Eastern Paris doesn’t exist in Stockholm, and I’m not even sure it exists in Berlin – Neukölln may or may not have it, I’m not sure yet. But the sort of integration that vernacular Parisian culture has does not trickle up to the ENA elite. LREM and the parties to its left have made no effort to promote community leaders the way the Swedish Social Democrats, Labour, or the US Democrats have (Obama notably had legs in both worlds – black Chicago community organizer and U Chicago law professor).

          • Michael James

            You are being highly selective by focusing solely on the Ministry. Plus, it is still too early to know whether the Swedish recent rush of immigration and whatever political sequelae result, is successful or not. In parliamentary systems most people go thru various phases, almost tests of suitability, including being initially lowly members to junior ministers (not in an inner executive cabinet) finally to cabinet. From what you are saying it sounds like they might be accelerating it, maybe unwisely. I also note that the far-right SD got 17.5% of the vote and 62 seats in parliament; one can argue from representative p.o.v. that this is fine but we are yet to see how it pans out in government/governance. Despite the high visibility of Le Pen, she actually has a mere 6 deputies and minimal impact on governing; again, one can argue whether this is good or bad but the fact is that in Sweden the SD have forced the other parties to adopt some toxic policies while Le Pen remains very marginal.

            In France today there are 35 deputies from ethnic minorities out of 551 (metro) = 6.35%. Mostly due to Macron’s LREM contributing about 66% of these. This is approximately only representative of half of the estimated 11% of the population that is ethnic. So, not perfect but on the other hand one cannot expect perfect representation of recent immigrants, especially in a non-PR electoral system–only achievable by affirmative action in selecting candidates as per LREM. The old parties of the Right (Republicains) and Left (France Insoumise & Communists) had one such deputy each. This, plus attempts to recruit the political class more widely from the population (with mixed results), the promotion of women (39% of deputies), and lowering the average age of deputies to 48 (compare to the American gerontocracy, the 3 front runners for the Dems are all over 70 with the current lead being the oldest President ever elected if he gets that far.) I give Macron points for this even if you don’t.

            Diversity gains ground in France’s new-look National Assembly after vote
            21 June 2017.

            Besides the deputies elected to represent France’s overseas departments and territories, FRANCE 24 has tabulated that 35 ethnic minority parliamentarians will sit in the next legislature, up from the mere 10 who were elected in the last vote five years ago. The leap can mainly be credited to President Emmanuel Macron’s La République en Marche (LREM) and its vast slate of newcomers.
            The National Assembly certainly has a new face: More young people, more women than ever before, more first-timers and – finally – many freshly elected lawmakers with diverse ethnic backgrounds. Out of 551 deputies not representing the country’s overseas departments and territories (known as DOM-TOMs), 6.35 percent of the new elected chamber are ethnic minorities.

    • Alex Vaivars

      I know! Which is why I never see people of color riding public transport here in Stockholm. It’s just not in their genetic makeup to integrate into society by debasing themselves with the metro or the bus. Only Aryans are wise to the ways of shared resources and responsibilities.

      Seriously, the “homogeneous” society argument is such horseshit. If anything, immigrant populations (anyone that is resident can take part in local elections) vote for these services more than the “natives”. According to your theory, the reverse should be true.

      • Herbert

        Also, the Nordic countries have indigenous minorities with Samis and Fennoswedes and the Norwegian language issue…

  1. Michael James

    Public transit managers in not just the laggard that is the US but also Germany and other relatively solid countries should make sure to study how things work in Scandinavia and how they can import Nordic success.

    Yes. I hope you will follow up this “descriptive” report to analyse where the critical difference lies. Specifically about management, and how much is out-sourced and are the usual multinational construction companies involved etc. Is it something clear and specific about management structure and lines of authority/responsibility etc or is it perhaps less clear in being “cultural”?

    The latest report on the London CrossRail farago came out yesterday (link below) and though it highlights all the expected deficiencies, it remains a bit opaque to me. Except a strong clue: “The report found that Crossrail Ltd, operating with a high degree of autonomy from the scheme’s sponsors, Transport for London and the Department for Transport, “had a gap in its understanding of delivery risks and the likelihood of meeting the December 2018 opening date”. It was supposed to open late last year but now they are talking of the core (tunnelled section in central London) opening in Q1-2021. Just since the delay was announced the cost has gone up ≈19% from £14.8bn to £17.6bn ($23.2bn). A brief squizz at the current board is not helpful in that the Chairman and CEO are new appointees put there after the previous incumbents were sacked over the mess. My interest was to see if the top guys were financial types (typical in the Anglosphere) or people with actual experience running transport or giant construction projects–it remains unclear to me. The new CEO, Mark Wild seconded from LU appears to have the correct CV with many major transport projects including Melbourne, Singapore, Taiwan, Beijing and London’s Victoria Line, but one wonders if the previous incumbent was similarly credentialed. The thing that comes thru the report is just how deluded the board was about progress and likelihood of meeting schedules–one expects inevitable delays and cost increases but this was only revealed, and then not the full extent, until the very last minute.
    Crossrail delays caused by desire to cling to ‘unrealistic’ timeframe
    Team made choices that damaged public value, says National Audit Office report
    Gwyn Topham, 3 May 2019

    Crossrail was driven over its budget and schedule because its management team clung to an unrealistic opening date, according to a National Audit Office report into the delayed transport project. The NAO said that although problems had emerged as early as 2015, Crossrail did not take opportunities to change approach nor produce a sufficiently detailed delivery plan to track its progress.
    “It is concerning that Crossrail Ltd deluded itself for so long about its ability to meet its original opening date and the £17bn-plus programme’s project management was not up to the job.”
    Labour shadow transport secretary, Andy McDonald, said it was “yet another disastrous failure of ministerial oversight from the transport secretary”, Chris Grayling.

    • Alon Levy

      The construction is contracted to the usual multinationals, yes. They just build more cheaply in Sweden and Spain than in the UK or US, which suggests the real difference is in design and oversight.

      • Tunnelvision

        Why is the real difference in design and oversight? Design codes are pretty standard across Europe so there’s not much difference in what is built, so what exactly is your point?

        • Alex B.

          The scope is certainly different. Copenhagen’s Metro uses very short trains (and thus requires much smaller stations). The trains are only 40m long; they obtain capacity on the system with high frequency and automation.

          I’d love to hear more about whether this was a conscious trade-off in the design process or not.

          • Michael James

            In big projects one can always reduce today’s capital cost at the expense of paying the price for enlarging the system retroactively. For politicians this is NIMTOO-ism. Already CPH designed for 4-car trains but provide only 3-car trains and 3-car platform-aligned doors, while being able to cheaply add the 4th car later. The question is whether it is adequately future proofed? Probably.

            As to Alon’s and Tunnelvision’s “Why is the real difference in design and oversight?”, as I pointed out in the post about London Crossrail, and more generally the Anglosphere, the “responsible” authority is an organisation deliberately divorced from the parent (transport) organisations. My working hypothesis is that it is this that is the fundamental problem, and a part of that problem is the top management, ie. of Crossrail Limited, versus the parent TfL and DfT (Transport for London, Department for Transport; btw, isn’t this subtle form of NewSpeak?). They are not as accountable to, and don’t report to, the notionally higher authority, and thus become captured by the private construction companies and consultants; indeed, not even “captured” as actually “run by”. The reasons for setting up such projects this way is the basic distrust, indeed deep hatred, of public administrations in either managing such building projects or running them once built (all the new projects in London are being subcontracted, mostly to HK-MTRC, to operate them; this is as close to privatisation as they can manage … so far). Though this came to the fore with Thatcherism, it appears to be bipartisan; Crossrail was begun under Blair, as have the various network rail omnishambles.

            I don’t think there is a fundamental lack of skill or vision within TfL or British Rail (as was), though I admit I sometimes write like I do think that. But these public bodies are never entrusted with long-range budgets or allowed to develop long-range plans (if they do, it is covertly or simply brushed under the carpet; remember that the original version of Crossrail arose in the 1940s!). The perpetual toxic relationship between national government and the London mayoralty just adds to the lack of effective political oversight. At the same time, I have often been dismayed by whom government appoints to all of these bodies: often you will find Lord this or Dame that, and rarely are these genuinely experienced types in the dirty business of creating things but rather the only engineering with which they are familiar is of the financial type. No accident that it is exactly the same type who are Hard-Brexiteers.
            Not forgetting the money culture: “Wolstenholme and Wright shared £265,000 in bonus payments last year (2017-18).” (These are the previous two CEO’s and in awful British habit got their bonuses just before the whole house of cards of “on time, on budget” collapsed; will their bonuses be clawed back? Both hold OBEs, and don’t imagine this omnishambles necessarily kills their chances of the ultimate seat in the Lords. Not the way the British game is played; and it is treated as a game. Indeed feasibly they might have to be rewarded to shut them up about what really happened.)

            Thus, is it deeply cultural in Blightly and the US (NYC’s MTA is classic; controlled & funded by the state with NIMTOO-ism and often with a chairman who is a political appointee from financial background who uses it as a stepping-stone and is fundamentally disinterested in public transit, etc etc; it’s all there). And of course Australia: the most relevant example being Sydney’s NW-Metro where the conservative state government, at the very last minute without consultation and indeed overriding all insider and outsider (consultant) technical advice (and provoking many resignations), changed the loading gauge of the hyper-expensive tunnels specifically to exclude the standard duplex Sydney metro trains. They also contracted the operation of the line to HK-MTRC! This is clearly on the covert grounds of readying for full privatisation.

            There will always be an imperfect relationship between (transient) politicians and public service organisations and their top mandarins, but I am guessing in the Nordics there is much greater trust in these organisations to plan, implement and operate such projects. Alon, it would be really good to dig into this issue in the Nordics. As for Crossrail, we need an insider to give an overview because the official site and Wiki simply don’t give the detail.

          • Untangled

            The decision for the North West Metro was spearheaded by Rod Staples. Who is very much an insider and has an engineering background and also convinced Labor government to go with Metro in 2008/9 as well. There was pretty much an internal war between the Staples Metro camp and DD supporters and of course the DD folks lost out (twice in fact) to the Staples camp. The story of the decision being purely ideological by the conservatives is not true, a lot of the push actually came internally from Staples and co (who again worked across different governing parties).

            Regardless, the line is going to open on 26 of May now after 5 years on construction. Really looking forward to it, Staples was flogging it on the news this evening.

          • Michael James

            Untangled 2019/05/05 – 11:04
            You’re trying to rewrite history (again). Staples was a pure political partisan appointment by Berejiklian. We’ve been over this, as have many, many of those directly involved (and who resigned out of the politically poisoned process) and top transport reporters such as Jacob Saulwick, Andrew West, Ben Sandilands, Sandy Thomas, Keith Still, Michael Stove and more. You have never been convincing on any of your claims (which appear to be denial of reality, not just a matter of opinion). And you shouldn’t confuse whether the NW-Metro will be “successful” as retroactive justification; of course any public transit serving this route will be ‘successful’ in simply providing a service where none previously existed (though there are multiple issues including too little seating for these 50km rides, and for years riders will have to get off at Chatswood and be in a scrum on already-crowded trains for the last congested stretch). Even the highly contentious tramway currently in its final stage will be successful but that doesn’t sweep away the substantive argument over whether it should have been built (instead of a proper Metro, whose cost the tramway is approaching! or maybe just tunnel the George street segment which the costs have now matched and for what exactly is deeply mysterious).


            The verdict: that double-decker trains could potentially move more passengers per hour in more comfort than single deck trains. That single-deck trains deter passengers on long trips, such as Sydney’s north west, because people won’t want to stand. It encourages passengers to abandon the torture train and instead drive a car.
            The decision to limit the tunnel size by 4cm to stop double decker trains was ideological foolishness. On paper it saved $200 million in tunnel boring costs. But they’ll spend more than that retrofitting the existing stations and tunnels for single-deck, so in the end it saves no money at all.

            2010 Independent Public Inquiry into a Long-Term Public Transport Plan for Sydney, Sandy Thomas, Feb 2013:

            “But there’s one simple step that NSW Transport Minister Gladys Berejiklian can and should take immediately: veto the lunatic attempt by her bureaucrats to quietly create a multiple “loading gauge” rail network in Sydney through the specification of unnecessarily small and steep tunnels on the North West Rail Link.
            If Ms Berejiklian does this, she’ll be rightly remembered as the politician who took less than a year to unravel the loomingmess ofmultiple gauges in Sydney. In comparison, that first “expert” multiple gauge decision in Sydney, in 1855, is still creating problems around the nation 158 years on.

            Michael Stove


            • When in opposition, Barry O’Farrell committed to constructing the NWRL as a double-decker service.

            • While in government, former Premier, Barry O’Farrell confirmed that he would construct the NWRL as a double-decker service.

            • In April 2011, while announcing Rodd Staples appointment as the NWRL Project Director, Minister Gladys Berejiklian reaffirmed that the NWRL would be constructed as a state owned and operated double-decker service.

            • In June 2012, then Premier Barry O’Farrell and the Minister for Transport Gladys Berejiklian announced that they would construct the NWRL as privately run metro shuttle service which would not be integrated into the Sydney network.

            I don’t think we should perpetuate this discussion any further as it is off-topic and fairly unproductive.

          • Untangled

            Look, instead of knocking it, it’s about to open so why don’t you try it. Despite what you think about Staples being a purely conservative appointee (and yes this is what you think because that is not the full story), he did indeed work for the previous government on their metro plans in 2008/9 (linked below) so he is solidly part of the transport establishment.


          • Michael James

            Untangled, 2019/05/06 – 00:41
            Look, instead of knocking it, it’s about to open so why don’t you try it.

            So, you are going to do exactly as I warned: claim it a “success” and therefore all decisions leading to it were perfect, or best for the long term development of a Sydney network, instead of the politically partisan and ideologically driven bullshit it was. We’re following the British model and that way leads to the omnishambles of Crossrail, high fares, poor service that extends across all their public transport including London Underground, inter-city trains and buses (there’s an article in today’s Guardian on the bus debacle). Privatisation or quasi-privatisation by right-wing ideologues is the problem and why so many get hot under the collar over these things. The paradox is that what is supposed to deliver efficiency and better value for money ends up the exact opposite, and then it is run as a for-profit by a foreign company! We pay at both ends–as taxpayers and as end-users. It’s going down this abominable British route that is so utterly discredited after almost 4 decades, especially when comparing it to a city like Paris (and probably plenty of others such as the Nordics).

      • Michael James

        In my previous post I wrote (emphasis added):

        They are not as accountable to, and don’t report to, the notionally higher authority, and thus become captured by the private construction companies and consultants; indeed, not even “captured” as actually “run by”.

        Hah! Just a tiny bit of digging revealed:
        Bechtel’s Crossrail chief leaves project in shake-up
        By Joey Gardiner, 8 April 2011.

        Project director Cliff Mumm departs £14.5bn scheme as delivery partner has authority curbed.
        The high-profile head of Bechtel’s Crossrail operation, Cliff Mumm, will leave the £14.5bn project in a shake-up which will also see the firm’s power to make independent decisions on the project reduced.
        The re-organisation, due to be announced later today, has been designed to strip out layers of duplication between Crossrail itself, project delivery partner Bechtel, and programme partner Transcend. The shake-up will see the three brought together to form a single, integrated Crossrail team.
        “Instructions to contractors and consultants will now be performed by the integrated management team, some of whom will be Bechtel employees, others Crossrail employees.”

        What could possibly go wrong? Seriously do the Nordic equivalents ever allow independent (including budgetary) decisions by the big contractors? And Bechtel …. !

        • Tunnelvision

          Except that Bechtel were not a Contractor building the project. They were part of the badly thought out Delivery Partner plan, which was to assist TfL in delivering the project, not actually building it. So no, the Contractors building the project were not involved in budgetary decisions. Bechtel were also part of the original East Side Access PMC team, when MTA decided to take all the authority with none of the responsibility they decided to pull out, and look how well that project has turned out with Agency management. Not saying Bectel are wonderful or otherwise, but they do have considerable experience delivering major projects working with the Client,

          • Michael James

            OK, but as you seem to agree, that makes it only a tiny bit better. “the badly thought out Delivery Partner plan”. I’d be very surprised if this kind of blurring the lines between the commercial world of contractors and the planning & oversight body acting in the public’s interest happens in the Nordics or France etc. On top of that is political tensions between the three (at least) public bodies, the national Department for Transport, the Transport for London and the London mayoralty, plus opposing political parties were in charge of these, and they swapped positions during the period (twice in the case of the mayoralty).
            And of course senior people in these companies are quite mobile within the industry so blurring lines even further. I’m sure the various parties have promised to respect Chinese Walls (eyeroll). If this is common practice in the Anglosphere then no need to wonder at out-of-control cost explosions. This arrangement was in place for several years ( 2009-April 2011) before its untenability became obvious to the management board. But then the senior executives didn’t like to stick around too long to take responsibility:
            Robert Holden (CBE): CEO 2009-2011.
            Andrew Wolstenholme (OBE): CEO 2011-April 2018
            Simon Wright (OBE): CEO April-2018-Nov-2019
            Mark Wild: CEO Nov-2018-present.

            Not saying Bectel are wonderful or otherwise, but they do have considerable experience delivering major projects working with the Client,

            Like the World Bank and the Bolivian government?

  2. Ben Ross

    Re the last paragraph: I don’t think bureaucratic legalism is the right phrase for Scandinavia, at least not for Sweden which is the only country I have much relevant knowledge of.
    The strength of Swedish public administration, compared to the US, is that it is much less legalistic. Written regulations are much less detailed. Problems are typically solved by everyone concerned (labor & management, organizations with underground utilities & builders) sitting in a room and agreeing on a solution rather than by everyone pointing to legal documents and asserting their rights.

    • Alon Levy

      I’m contrasting bureaucratic legalism here with American adversarial legalism, in which, if you’re displeased with something, you sue in court. In Sweden you can sue as well, but it’s more common to complain to a regulator or ombudsman. You’re right that in Scandinavia there’s another element to this picture (which I think in American comparative law is more French than Nordic) in that on labor issues you go through the union as an intermediary.

  3. Martin

    Nice post. I think transparence is indeed a key.

    The high speed rail estimates for Sweden are out of date though. More realistic recent estimates are much higher and less impressive at at 230 billion SEK (or 200 for a downgraded version).

    Effekter av hastighet 250 km/h jämfört med 320 km/h

  4. Tunnelvision

    One thing not mentioned about the CPH metro is that the train lengths are considerably shorter than say Crossrail or other similar systems and so the stations will be significantly cheaper to construct. Driverless trains are used and no barrier systems, thereby reducing capital and maintenance costs. One thing I wonder about is how property acquisition costs differ, in CPH I believe almost all the stations and station entrances were in public spaces so I’m guessing there were lower costs associated with this than in other places. I believe Cityringen also followed roads as much as possible to minimize any such costs. These can be substantial. And without recognizing the different performance requirements and different ROW costs compassions are not really valid.

    • Alon Levy

      Land acquisition is 7% of Crossrail costs per a FOI packet I got from early 2018, cf. stations at 35%, tunneling at 20%, and overheads at 16%.

      And stations normally are in public spaces, no? In New York they went under Second Avenue, and here the U5-U55 connection is going under Unter den Linden.

      • Tunnelvision

        Yes, but for example ESA in NY has had significant ROW acquisition costs for the short length that swings from Park Avenue to 63rd St and various locations in Queens. Also the location of station exists has suffered due to the shear greed of the property owners where those exists could have been located. For example one developed wanted $83m in compensation for allowing an entrance which would boost the value of his property.

    • Richard Mlynarik

      It’s hilarious when American contractors and consultants decry to “regulations” coming from da gubmint to explain their astonishing costs and astonishing inability to deliver.

      As if “public” “transportation” agencies weren’t wholly-owned subsidiaries of their contractors in the first place.

      Land-side and air-side fare-gating, “sense of place’, “civic signatures”, “joint development opportunities”, “world class gateways” and so forth don’t spring fully-formed from the brows of penny-ante local politicians and piddling agency officials. They’re carefully placed there in advance by those who will richly benefit from massive costs and massive under-performance — meaning those who will codify the “requirements” and develop the “specifications”, those who are “forced” to build to the “specifications” (despite, they promise, being “world class”. if only their hands weren’t tied!), those who feeds on the “agency overheads” of bloated contracts and endless change orders, and those of course who simply ride the revolving door from “public” to “private”.

      Once the perma-temp consultant mafia has gamed the “requirements” — and they have, always, totally, in the Anglosphere, and increasibly beyond (eg Amsterdam) — it’s game over for the public interest.

      My heart truly bleeds for US civil contractors cruelly forced to overbuild stations, engage in excess tunnelling and bridging, or to follow insane alignments.

      • Tunnelvision

        I’m struggling to understand your point. ROW and real estate acquisition costs are not paid for by the Contractor, and typically form part of a separate budget. My point was simply to ensure that all costs for the project are accounted for when making comparisons of project outcome costs. There are many contractors who do deliver on time and on budget in the US. I’m working on such a project right now, where the underground construction portion of the project is gong well, its the above ground portion mired in senseless legal challenges that is being impacted.

        • Alon Levy

          At least in Flyvberg’s database, American and European projects have comparable cost overruns. The difference is that absolute costs in the US are higher.

  5. df1982

    This analysis also demolishes another cliché of construction costs: that they are chiefly inflated by high labour costs and powerful unions. Scandinavia has both but is able to keep costs reasonable. In the end, labour costs are a trivial component of multi-billion dollar infrastructure projects (although imposing inefficient labour practices can have a much more deleterious effect).

    So it comes down primarily to project management then. In a US context, do you have any info on the costs of infrastructure carried out by private railroads, and how they compare to public works programs? Obviously they don’t do much of it, as their business model is focused on running down legacy infrastructure, but there must be some small-scale projects like track duplication, grade separation, signalling, etc.? Is there much of a cost differential? It would be evidence for how much cost inflation has to do with bureaucratic mismanagement.

  6. Patrick Jensen

    Although it would be nice to think that the reasons for cheap subways are all cultural, rock quality is a major reason why subways come cheap in Sweden, Norway and Finland. The Baltic shield is mostly composed of igneous and metamorphic rocks which are much stronger than the sedimentary rocks you’ll find beneath most European cities, including Copenhagen. This means that subway tunnels in Norway, Sweden and Finland can be blasted rather than bored.

    High rock quality also means suitable construction materials are usually available close to the work site, which helps cut down on mass-haul costs.

      • Herbert

        The Nordic countries are perhaps only behind the alpine countries in number of tunnels bored since the 1880s. They’re bound to learn how to deal with their typical geology at some point…

      • Patrick Jensen

        You would be correct that the Oslo basin is indeed sedimentary. I must admit my knowledge of the geological conditions in Oslo is mostly based on tenders for railway tunnels out of Oslo.

        Still, the geological conditions did allow Lørenbanen to be blasted rather than bored or excavated, which cuts construction costs significantly.

          • Patrick Jensen

            No, the main hall was blasted too. The shotcrete walls are a dead giveaway. Only the elevator and escalator shafts were built from the surface.

  7. Michael Thomas

    I wish to clarify something about purchasing power parity or PPP. The correct use of PPP is to compare the cost of consurmption of a basket of goods from one country to another while scaling the cost to reflect exchange rate differences between those two countries. Some things you can do with PPP is compare the cost of a haircut, or a head of lettuce or a gallon of gas. or a metro ticket or even monthly rents. When you use PPP to compare the cost of something like a skyscraper or a subway project, it is utterly devoid of meaning because those things are not part of anyone’s basket of goods or services. The only way to compare capital expenditure at that scale is just to compare it in strictly nominal terms.

    • adirondacker12800

      And things like concrete, steel, heavy construction equipment, etc. have world prices.

        • Michael Thomas

          Capital expenditures like metro systems are wholly non-tradable. One cannot pick up and sell a local metro system in another town or country. If a good is wholly non-tradable, then the PPP value is the nominal value. Conversely, the nominal value is the PPP value. This is a standard point when calculating PPP.

  8. Lauri Kangas

    You can get the most recent modal splits for the Helsinki region in the pdf here, although you’ll need to translate the diagrams. Note that “pääkaupunkiseutu” is Helsinki+Espoo+Vantaa(+Kauniainen) and “Helsingin seutu is the wider region, which is most comparable with Stockholm county. I get a feeling that we have a different cut off for short walking trips as the percentage is so much higher than Stockholm’s.
    The Finnish national travel survey is a bit old now and less precise for individual regions, but possibly interesting too: .
    Note that Helsinki’s trams also get 60 million boardings a year. Heavy rail doesn’t serve trips within the central area very well. Buses in the region also got 180 million before the metro extension: . These are boardings, not linked trips, but buses do still play a big part even for trips into central Helsinki. Stockholm has much better rail coverage.
    You can find a lot of European modal splits at , but the data is really inconsistent, so check the underlying sources carefully. Most are reported for administrative central cities only and for example the survey used for Helsinki only covers trips made by residents within the city.

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