Why I Write About Rail Costs, not the Cost of Other Things
I’ve been asked from time to time, Alon, you write about comparative rail costs all the time, but what about roads? Sometimes the question expresses curiosity about whether roads display the same American construction cost premium as urban rail does; sometimes it expresses frustration that The Discourse doesn’t complain about road costs. Regardless of why people ask, I’d like to explain my reasoning in depth, especially now that serious people are asking why this is the focus of my comparative research.
There’s an easy answer and a hard answer. The easy answer is that I’m a railfan. I got into this because I was living in Morningside Heights and taking the subway to social events in Brooklyn and Queens, which involved 3- and sometimes 4-seat rides. It got me interested in coverage gaps and subway extensions, which got me interested in the construction costs of such extensions.
But that’s not really it. From my original purpose of comparing a few urban infill subways in large global cities I got into operating costs, and high-speed rail, and light rail, and electrification, and even road tunnels (here is my comparison of urban road tunnel projects). What’s more, other people have looked at comparative costs, and even without sharing my not-knowing-how-to-drive origin story, they don’t compare individual road projects much. The Brookings study about the Interstates looked at the entire cost of the US Interstate program rather than teasing it out project by project.
What’s really going on is that subways are megaprojects. Megaprojects are visible, and I don’t just mean physically – they’re widely discussed in the media and politics, and cost overruns invite intense criticism by the opposition and by investigative reporters. Everybody in New York knows about Second Avenue Subway, and everybody in New Jersey knows about the Gateway tunnel, and everybody in London knows about Crossrail.
The upshot is that megaproject cost estimates are just more reliable than those of anything else. What I mean is not that cost overruns are unlikely. Rather, what I mean is that cost overruns are difficult to hide, unless the agency goes the Canadian route of fluffing the budget with very high contingencies. The current budget for Grand Paris Express is around €35 billion, up from €25 billion when it was first announced. If it actually ends up at €36 billion and not €35 billion then it may be possible to scrounge extra funds from a few sources sub rosa, but not if it ends up at €45 billion.
The largest source of wasteful spending in the world is the American military. It has a budget of $700 billion a year, debated largely behind the scenes, with boisterous generals and their lackeys ready to publicly defend every $600 toilet seat and every procurement item in the district of any member of Congress who dares object. There is a shroud of secrecy around everything that can be justified as national security. There is no exit threat – the military can’t be shut down the way an underperforming state railroad can be privatized. Hidden costs are rampant, and as far as I understand, they are on the order of a few billion dollars at a time.
I bring up American military waste not to justify civilian waste on infrastructure, but to compare which costs can be plausibly hidden. If the US military can miss a few billion dollars, the transport planners of Ile-de-France can miss tens to hundreds of millions of euros on a 15-year, 200-kilometer project. Those of Madrid can probably miss an amount of money on the same order of magnitude as those of Paris. The low construction costs in Madrid have been plugged into additional construction, giving Madrid Europe’s third longest metro network after London and Moscow; those hundreds of kilometers built in the last 25 years could not have cost the same as in France, let alone the US, because this would have been too big of a difference, and the media would have noticed.
The same situation equally occurs for road megaprojects, such as tunnels or big urban reconstruction projects, such as the lane additions in Los Angeles. But it does not occur for run-of-the-mill road widening outside urban areas or for small projects to increase the capacity of a junction from a cloverleaf to a four-level interchange. These are not sufficiently visible for me to be able to trust that there is full cost accounting in the trade and popular press.
I’m happy to compare the costs of road tunnels between different cities; the few examples I have found paint the same picture as the subway cost comparison. But above-ground road construction is harder, just because “above-ground” can mean anything from a complex viaduct-over-viaduct to simple at-grade construction. Even then, ancillary costs like unnecessary street reconstruction may be bundled into the overall budget, and since above-ground construction isn’t so expensive, these extras may be a sizable fraction of the cost.
For a similar reason, I don’t look at airports so much: they’re just harder to compare. I do not know how big the Berlin-Brandenburg disaster is compared with other airports under construction, so I do not know how much it should cost; I don’t even know what the equivalent metric of cost per km or cost per new station excavated is. In contrast, to take another well-known German infrastructure disaster, Stuttgart21 has a definite tunnel length – 30 kilometers, as well as another 25 above ground – so I can compare with other regional rail projects and say that actually the cost of Stuttgart21 (€6.5 billion) is not so high relative to how much urban mainline rail tunneling costs elsewhere in the world.
For the exact same reason, when I look at above-ground urban rail I try to separate out truly at-grade light rail from elevated lines. The only times I try to do a deep dive are when these projects encroach on the cost range of subways, like the Boston Green Line Extension. Elsewhere, ancillary costs can be substantial, as with the Nice tramway: 70% of the budget was the tramway itself and 30% was stormwater drainage, rebuilding a public plaza, tree planting, and other extras. Extras introduce an error term into comparisons that are harder to ignore when the cost is $50 million per kilometer than when it is $300 million per kilometer.
Road costs remain a powerful sanity check. All of the reasons I (and others) believe are behind the American construction cost premium are equally applicable to roads and urban rail. So far, looking at road tunnels confirms the subway pattern, but there just aren’t a lot of road tunnels built around the world – they’re expensive for the capacity they provide. And if it’s possible to carefully tease out above-ground road megaproject costs then a comparison is welcome as well. But they are unlikely to form the backbone of any comparison.
Metro tunnels, for all the handwringing about special circumstances, are pretty consistent. Some places have easier rock and some have harder rock, but usually this will be noted in the trade and popular press; the most fundamental quantities, length and the number of stations, are if anything easier to find than the headline costs; ancillary extra costs are usually not significant, and when they are, they tend to be bundled into quantifiable metrics like station size and depth. The only big difference in reporting regimes is that some places (like Spain) bundle together infrastructure and rolling stock costs whereas most don’t.
The main approach to project-level comparison of infrastructure costs across countries has to be about urban rail, because that’s by far what’s most common across the world. The error bars around ex post costs are small enough that even a relatively restricted sample is suggestive of the real global effect as I’m learning when adding more and more projects to my database (currently about 130 projects totaling 2,000 km). This is the most comparable list of public infrastructure projects, and what we may learn about why various American urban rail lines cost so much and why Spanish and Korean and Nordic ones cost so little is likely to generalize.
Pedestrian Observations 
The best transit construction news out of Los Angeles in 2019 happened today, Ron Tutor was NOT awarded the contract for the 14.5 km of the Gold Line extension phase 2B.
budgeted at $805 million its coming out at $55 million per km. Some of that is within an existing ROW, but apparently the ROW is the most expensive part of this construction because they have to move existing metrolink tracks in that ROW to add the track pair for the Light Rail.
This is actually 5.3 km shorter than the initial plan, and they for some insane reason want to someday find the money to finish those last 5 km, at a cost of $381 million, or $72 million per km, almost all of which is in the ROW and necessitates extensive and time consuming track relocation.
https://thesource.metro.net/2019/08/14/contract-awarded-to-build-first-segment-of-gold-line-extension-to-pomona-with-option-for-extension-to-claremont-and-montclair/
Good points, though to me the real significance of the comparisons (and you may be implying this) is to grapple with the issue of why it is so difficult to get rail-transit (or any ambitious public transit) projects built in the Anglosphere. There will be, let’s call them proximal, causes that a forensic analysis might identify but the ultimate cause is the lack of political and public will to favour such projects over other projects, mostly roads (and the never-ending exurban sprawl they support) and indeed, defence. (The only reason the US continues support, reluctantly, of the massively expensive CERN and ITER-fusion projects (biggest and most expensive experiments in history) is that it is whispered in the ear of the generals that some fiendish futuristic military technology could be forthcoming and the US could not afford to not be party to it.)
In the Anglosphere, above a certain wealth level and all of the political class, have zero intention of ever having the need to use public transit. Indeed, in Australia (and I am sure everywhere else) our politicians continue to get into trouble by choosing to take $5,000 helicopter rides just to shorten a trip to do a fund-raiser or whatever. Compare to say, President Macron who has never owned a car in his life and perhaps doesn’t even have a driver’s license! (Of course that doesn’t necessarily make one a fan or supporter of public transit: Robert Moses never drove in his life and didn’t have a license.)
There are still no satisfactory answers to several current projects. I was looking forward to London CrossRail opening because, despite the high cost I was sure it would ultimately be proven worth the investment; but right at the last minute and for reasons that remain totally opaque, it is being delayed 2 years (maybe longer, no one can nail it down) and despite almost all the physical infrastructure being essentially complete its cost has exploded another $3bn (or more, no one can nail it down). Likewise for HS2 (which shared some top management with CrossRail, all now expunged and blamed but it really doesn’t seem to matter) which now has just had another $30bn (or was it £30bn, does it matter?) added to its final cost. And CaHSR ….
In Australia, anyone trying to get up support for HSR gets showered with these other Anglosphere clusterfks as evidence we should never attempt anything as foolish.
Does anyone in Australia ever point out that Sydney and Melbourne have very high population growth rates and therefore should be building more infrastructure even if it looks marginal on current travel volumes? NSW and Victoria build, what, 8 housing units per 1,000 people annually? Stockholm builds around that many and is the highest in Europe that I know of; a couple US cities build more, like Austin, but that’s mostly sprawl.
Yes, those arguments have been raging for at least the last decade as affordability has reached crisis point, and commute times explode. It is often claimed we have the highest population growth rate in the developed world, and almost all of it is concentrated in the two big cities and of course driven by immigration. Just this week:
BTW, this is typically Australian because while the $600bn sounds large, it isn’t and is not far off what is claimed by politicians as their annual spend today. And typically spread over 15 years. The real need is closer to a trillion over the next decade, to build the comprehensive metros (for Sydney, Melbourne and Brisbane). A big reason for failure to do anything is similar to the UK situation: they have government spend as 32% GDP while Australia has even lower (feds are fixated on the entirely magical number of 23.9% which no one can explain rationally; add in the states and it is about 28%). So they typically announce some project but then mumble “over the next 10/20/50 years” with a start date that turns it into NIMTOO (so it doesn’t impact their budget).
But our political class at all levels (esp. local and state, slightly less at federal) is dominated and cowed by the property developers, and the banks who want to keep the personal loan/easy income business growing. Like the UK, we have one of the world’s highest personal debt per capita, even though unlike the UK we have one of the world’s lowest public debt as %GDP; however guess which of these the conservatives constantly shriek about–and use as an excuse not to spend money on anything except their usual favourites (national security etc)?. Part of the problem of Sydney is that it is geographically constrained by ocean to east, mountains to west and big national parks to north and south. It is the reason why some have finally realised there is a role for HSR here (you may remember I published on exactly this precisely 10 years ago).
In the past year or so, an issue has blown up that was blindingly obvious for at least two decades: lack of regulation of buildings, effective self-regulation of building certifiers. There are thousands of high-rise apartment buildings with that flammable aluminium facia (that a strict interpretation of rules would be illegal on buildings higher than 3 floors ….). Since last Christmas there have been three tall apartment blocks with forced evacuations due to structural defects.
This is talked about all the time, actually, but too often the conversation becomes sidetracked into xenophobic anti-immigration positions. At current growth rates Sydney and Melbourne will both have 8-10 million inhabitants within 30 years, and both need the kind of comprehensive metro networks that cities of this size require for their basic functioning.
To be honest, both state governments have belatedly recognised this and are building rail infrastructure at a decent but not remarkable rate. But they have done little to stem excessive construction costs (which is at UK levels, but thankfully not US levels), and aren’t being helped by a conservative federal government which has been largely inert when it comes to major infrastructure.
And neither city is getting anywhere near what they could out of their existing urban rail networks. 15-20min off-peak frequencies are still mostly the norm, and ridership is concomitantly extremely peaky. Operational costs are bloated, so farebox recovery is very low, and much of the existing infrastructure is antiquated and inefficient. It would not take much to turn each of the networks into a modern metro system, but there are significant political obstacles to overcome for this to happen. Sydney is making a start with its new metro line, even if it is in an outer-suburban location that would probably be more suitable for commuter rail. A turning point may come in the mid-2020s when both cities complete new trunk lines through their CBDs.
“This is talked about all the time, actually, but too often the conversation becomes sidetracked into xenophobic anti-immigration positions. ”
It seems you’re making an economic case against immigration for the current residents of Sydney and Melbourne. With a birth rate of 1.8 children per woman, Australia’s population would be slowly declining. Instead, the citizens of Melbourne and Sydney are asked to pay today to build rail for people who will move to Australia as part of population growth. Is it a legitimate position, in your eyes, to oppose immigration to avoid the infrastructure costs it will impose?
No, because if this growth is managed well Sydney and Melbourne will be much more vibrant and interesting places to live than they are now. And by “managing growth” I mean shifting from low-density suburban sprawl to medium-density transit-oriented cities. The key question then is making sure that the new infrastructure is built in a cost-effective and well-planned manner (which is far from the case today), rather than trying to avoid the task of building transport infrastructure by shutting out migrants.
No, though just like the UK there is a certain element of denial in the fact that our magical economy (27 years uninterrupted without a recession, apparently a world record) has a large dependency on immigration (in league with the property bubble and its ability to inject magic money into the economy). In one recent federal election, a conservative candidate in Sydney’s western suburbs (ie. immigrant suburbs) actually said that Sydney’s road congestion was due to immigrants.
Anyway, re my comment about Australian’s fave habit of property speculation, today has a perfect story that reveals it all about how difficult it is to undo our toxic rules and taxes that fuel the unproductive property bubble (remember that “Liberals” are actually the conservatives):
You know the tax situation must be a serious mess if it is the so-called Liberals proposing this. Oh, and South Australia/Adelaide is a one-newspaper zone. Can you guess who owns it? Rupert, of course. In fact it is where he began his career, as inheritance from his father. From this single provincial newspaper to the… world.
Df1982, you’re basically advocating that people Give Up tangible things now (increased taxation upon themselves) for intangible future things (Sydney becoming “more vibrant and interesting”) to benefit people who aren’t them, or their own children. From your knowledge of human nature, how likely do you think this is, long-term, and how likely is it to turn the population against ALL transit investments?
Michael, I’m sure you’re familiar with Strong Towns. It seems like Oz is in the grip of a continent-wide growth Ponzi scheme.
https://www.strongtowns.org/the-growth-ponzi-scheme
That, and the ridiculous bicycle helmet laws that make it near impossible for tourists to use city bikes two reasons to wonder about the future of what really is a lucky country.
That’s economically incorrect, you can get away with more borrowing now if you expect population growth in the future (or economic growth, but that’s less controllable). Population decline is a really big problem in Japan and parts of Europe right now, it means that the natural rate of interest is so low that it hits 0% whenever the economy is not in tiptop shape. Australia has avoided that problem precisely because high immigration rates keep the natural interest rates high enough that it doesn’t need to constantly engage in fiscal stimulus to avoid recessions.
Alon,
If it’s a good bet, then the way to fund it is to issue zero-coupon bonds due in 30 years to fund the construction now, for the benefit of the non-Australian people who will make up the growing population that requires the investments. Then, in 30 years when the bonds come due, the people paying them will be the people with the benefit of the system the bonds paid for.
Of course, under measurements like GDP population growth MUST produce GDP growth. Unanswered is whether GDP grows per capita.
Ideally you get the super linear effects of growth that Michael West talks about in the book Scale. His example: for every 100% increase in city population, infrastructure costs increase 85%. For every 100% increase in population, wages increase 110 or 115%. West also points out that other things also tend to grow superlinearly, including crime. So increasing population does not guarantee an increase in overall welfare for city residents.
I guess you mean Geoffrey West, a physicists and author of Scale: The Universal Laws of Life, Growth, and Death in Organisms, Cities, and Companies. Not Michael West (amongst several Michael Wests) who is a financial journalist in Australia who now runs the Independent Australia news website.
Also he write from an American perspective so some of those things that scale are often peculiar to the US and their often dysfunctional cities.
East is East, and West is in fact Geoffrey; thank you for the gentle correction. He is English,fwiw, and the examples he cites in the book in support of sublinear infrastructure and superlinear benefits (and negative side effects) originate from a number of places. He specifically cites research from Switzerland showing that a population doubling leads to only 85% more gas stations.
The more amazing thing is the transnational effect of scaling as a side effect of city size. West ties this to the idea that cities are the only human creations that take advantage of fractal geometry to pack more into a space with less. Cities are not as fractal as naturally selected designs which scale at 75% increased infrastructure for a 100% growth in size.
I haven’t read the book but put it on my wishlist now it’s out in paperback. However a lot of it sounds not the least bit surprising. Most of the biological observations have been known for a century, such as scaling of mammals and inverse energy metabolism with size etc. The 85% gas stations thing seems high to me if anything as obviously efficiency greatly improves with higher density of habitation, and not only can one gas station serve more people but far fewer people are driving cars in the first place. You cite Switzerland but Zurich is the posterchild for very high use of public transit in a high-wealth population. New York city residents, with an average of 4,696 kilowatt-hours per household per year consume less than one third of the electricity of the average Dallas household at 16,116 kilowatt-hours. About 50% of NYC households don’t even own a car, and much higher in Manhattan. And that’s before considering the distances driven in these different contexts.
Of course some of the most important factors are not directly related to scale per se but secondary issues (sometimes provoked by scale) such as density. On some counts the greater LA area has a bigger population than NYC yet doesn’t benefit from that scale.
LA is actually denser than the NYC metro area, believe it or not. They don’t have a hyperdense central core and less dense exurbs like NYC. Jane Jacobs, with Jacobs externalities, would credit a lot of innovation to having a dense core.
You can skip the parts of the book that talk about Scale in mammals, then. His chapters on the science of cities echo Chuck Marohn and Jane Jacobs, and a few other authors we are probably both familiar with, but lend the credibility of hard science to things we might just otherwise sense.
Not. The sleight of hand is in the use of “metro area”. Those who make that silly claim define it as some gigantic tri-state area across New Jersey, Westchester County, Nassau County and Connecticut., large swathes of which are not urbanised. It has been comprehensively debunked but it keeps getting repeated because it somehow brings comfort to those who believe building a gigantic low-level sprawled, unplanned mess connected by massive freeways doesn’t involve any penalties–as it assuredly does.
The city of New York of 8.5m residents in its 5 boroughs is the densest urban area in the USA (and North America) by a long way. Thus one calculation shows:
”Los Angeles City runs about 7,400 people/sq mile but New York City runs 17,100 people/sq mile.
Here is a proper analysis:
Click to access OsgoogEtAl_LANYDensity_report.pdf
The people who came up with “Los Angeles is denser!!!” cooked the books.
It depends how you measure density.
To oversimply: the LA area is all mid-density. Meanwhile, the NY area is partly very high density, and partly low-density suburbs. The suburbs take up most of the area, but most of the people live in the high density area.
So if you divide “total population” by “total area including suburbs”, LA might come out as higher density. But if the question is “at what density level do most people live?” NY is certainly much higher.
Actually it made me wonder, given a quick look at the Metro Trains operation which kind of reminds me of Japanese through running, would Melbourne be better served by the present state of affairs with upgrading (and maybe a second Metro Tunnel) or is it worth investing in a turn up and go service within the inner city segregated from the current network?
There is the trams, after all…
There are the trams, but they are really only useful within about a 5km radius of the CBD. Melbourne would be best off with a strict division between Metro Trains (which would be upgraded to true metro status, with a network of autonomous lines) and regional/intercity trains, which should be transformed into an RER-style system with through-running through the city. At the moment there is too much interaction between the two to make either efficient.
It’s also hampered by an excessive number of level crossings, single-track sections, low-capacity signalling and a woefully inefficient and confusing operation of the city loop. The loop should be split up into genuine through-lines for metro services – at the moment it basically functions as a glorified turnback for commuter trains.
I seem to recall the loop largely works for Chicago which is proper metro.
The group system seems to work, given how frequencies are combined into trunks. Perhaps they could rename “groups” to “main lines” and “lines” to “branches”, while picking a service pattern and sticking with it the entire day? I guess outside the “core network” with turn-up-and-go, single track sections can be tolerated if not so many trains are going up a branch. They could also pair two lines through the loop, so after a train from one line exits the loop, it runs straight onto the other line.
Level crossings probably aren’t an issue, look at how Odakyu has a level crossing at the throat of Shinjuku station (then again, that thing is shut for at least an hour in peaks), and some along the Chuo Line as well. That hasn’t stopped Odakyu and JR East from running metro frequencies.
Hence my comparisons with Tokyo. Maybe I’ll try to do more research to see what they’re trying to do exactly.
The Chicago loop is a very low frequency operation, relatively speaking. The Chicago metro runs almost entirely within the city of Chicago, whose population is just 2.7 million. Not a model for a system serving the whole Melbourne area.
The Melbourne metro should be very easy to rationalize. Currently it consists of about 14 radial lines all running to the inner city loop. When the “Metro Tunnel” opens, some radial lines can be run through the tunnel, segregated from other lines. The remaining lines can be split into two groups: one group runs in a circle around the loop (in just one direction – a downtown shuttle can run in the other direction), another group only uses the south and west sides of the loop (where there exist 6 tracks now). So essential the system is split into 3 metro lines: “tunnel”, “loop”, and “southwest”. Each metro line has 2 or 3 branches on each end, allowing frequencies of 5-10 minutes on every branch.
The various lines are not *that* long (in terms of number of stations) so I see no need to overlay “metro” and “RER” systems.
Besides this, the tram lines need separate lanes.
When the “Metro Tunnel” opens, some radial lines can be run through the tunnel, segregated from other lines.
…..which is what Chicago did when they got money from the Federal government to do it, in starting in 1937., pausing for World War II and completed in 1951. They have plans for more.
Yes, Chicago built downtown tunnels so the Red and Blue lines could bypass the loop. I don’t think they have plans to build any more such tunnels. Chicago’s population is currently ~20% lower than at its peak, for one thing.
Today households have two wage earners, who have different shopping and dining habits than households had when the population peaked. And very likely at least one automobile too. There are all sorts of grandiose plans, most of them not official. I’m sure the CTA has “grade separate the northwest corner of the Loop” on it’s wishlist. Since it opened and every one agreed it was a really bad idea.
I’ll use this discussion of Australian rail as a feeble pretext to mention that the greatest Australian rail fan geek, and often claimed as the world’s greatest politician railfan, died overnight. Tim Fischer was a Vietnam vet before becoming a long-serving politician rising to become deputy-PM in 1996. I can’t remember if he was a factor in (re)construction of the Ghan in the 90s, one of the world’s longest railways linking Adelaide to Darwin (2,979km), but in retirement he became its official ambassador. After retirement he was appointed as Australia’s first ambassador to the Holy See 2009-12 (these diplomats actually reside inside Vatican city). Stories have been told that he went from one of the world’s largest countries with some of the world’s longest rail routes to the world’s smallest country with almost zero rail. But in fact he made it his mission to rehabilitate the Vatican’s 852 metre railway, and reputedly any official visitors were first obliged to take a ride on it before he would show them the more salubrious sites within the territory.
Despite being a nominal conservative and a catholic, he supported rail and Australia becoming a republic. A rare conservative.
He wrote a bunch of books on rail including a global survey of all the different rail gauges.
Fischer, Tim (2004). Transcontinental Train Odyssey: the Ghan, the Khyber, the Globe. A personal guide to the great transcontinental railways of the world. Allen & Unwin. ISBN 978-1-74114-450-5.
Fischer, Tim (2011). Trains Unlimited. Harper Collins. ISBN 978-0-7304-9740-0.