Construction Costs in China: Preliminary Notes

Eric and I are in the process of building up our database of construction costs and starting to select case studies for in-depth study. Most of the world was already in my original database from late 2019, but there are big gaps, most notably China, which has built more subways in the last 20 years than in my entire database combined. For this, we work with students; I mentioned Min-Jae Park in a previous post, but we have others. A Chinese master’s student of public administration at NYU named Yinan Yao is working with us on this, and has used Chinese sources, mainly official (what I call “plan” in my dataset), to construct a dataset that so far has 5,700 km, of which around two-thirds is underground.

I’m not putting the database out yet – this is still preliminary and subject to some edits, and we’ll publish a merged database of everything when it’s done (probably in the summer of this year, but don’t yell at me if it takes longer). However, I want to point out some observations that come from the data:

Chinese costs are fairly consistent: most recent subways cluster somewhat below 1 billion yuan per kilometer, or around $250 million per kilometer in PPP terms. This is consistent across the entire PRC. Costs are slightly higher in Beijing and Shenzhen than in the rest of China, and are even higher in Shanghai, where they approach 1.5 billion yuan per km. This is in accordance with what I’ve found in the rest of the world: costs are remarkably consistent within countries, especially within cities, to the point that variations, like New York’s higher-than-US-average costs or the difference between Milan and Rome, require separate explanation.

More difficult lines cost more: this is again not surprising, but it’s useful to check this on the largest national database of costs. Yinan points out that certain lines that cost more are more central, in that sense of passing under older lines with many transfer stations. See for example the Shanghai plan for 2018-23, with a map, a list of lines, and their costs (in hundreds of millions of yuan, not billions) on the last page: the highest cost per kilometer is actually a short elevated extension of Line 1, which has to be done while keeping the line’s current Xinzhuang terminal open for service as it is a critical transfer point to Line 5. The same map also shows the cost difference between the more central Lines 19 and 20 and the more suburban Airport Line, which goes around city center as the center is already connected to Pudong Airport via Line 2.

Why is Shanghai more expensive? Shanghai has a more built-out metro system than any other city in China save Beijing. That could explain its cost premium, but then again, relatively suburban lines like the Airport Line have similar costs to rest-of-China lines, including city center tunneling. Yinan suggests that the reason is geological: Shanghai is in the alluvial plain at the mouth of the Yangtze. This theory would suggest that tunneling in other parts of the world at the mouths of big rivers is expensive as well – and this is in fact true in Europe, as construction costs in the Netherlands are high. It is worth investigating, not just because of the implications for China but also for the implications for Europe: if Dutch costs are high for geological reasons, then there is nothing to explain regarding the quality of Dutch institutions, and thus if certain institutions (such as consensus democracy) occur in low-cost countries like Switzerland and the Nordic countries but also in the Netherlands, then the retort “but the Netherlands has this too and is expensive” loses impact.

There is very little regional rail in China. The definition of regional rail in a Chinese context is dicey – China did not inherit big legacy commuter rail networks, unlike India or most developed countries. Suburban rail lines are greenfield metros, rather like the Tsukuba Express or some of the more speculative parts of Grand Paris Express. In our dataset, regional rail is broken out from other urban rail because the concept of regional rail means only tunneling the hardest parts, and doing the rest on the surface using legacy railroads, which cuts overall costs but raises the costs per km of tunneling. China doesn’t do this, so all lines have the tunnel composition of a metro.

Having a lot of quantitative data makes things easier. Chinese costs are in the context of a consistent set of national institutions, and involve a lot of different subway lines. Even income differences are not so huge as to render analysis impossible – there is a lot of geographic inequality in China, but less than between (say) China and the developed world, and for the most part the bigger cities are on the richer side. This makes it easier to formulate hypotheses, for example regarding what exactly it means for a line to be more or less central. Eric, Yinan, and I are trying to come up with a coherent definition, which we can then try to test on other countries that build a lot of subways, like France, Russia, India, South Korea, and Spain.

All data is valuable. I started looking at costs in 2009-10 in order to figure out how to affordably build more subways in New York, and thus focused on the largest and richest world cities, like London and Paris. But really, all data is valuable. Comparing various developing countries is important because of issues like cultural cringe, and likewise figuring out if Shanghai is more expensive due to geology is important because of the implications regarding Dutch institutions. It is ignorant and harmful when New Yorkers reject knowledge that comes from outside their comfort zone of the city and perhaps the few rich global cities it deigns to compare itself with. On the contrary, Chinese data should be of immense value to both richer countries like the US and poorer ones like India, and likewise data from the rest of the world (for example, some Japanese and Korean best practices) should be of immense value in China.

There is a lot of knowledge out there. The point of comparative research is to access knowledge that people in one reference group (in our case, New York) do not have. Eric and I don’t speak Chinese; our language coverage, plus some non-English Google searches, is pretty useful, but far from panglossian. Yinan is so far tremendously helpful to this project. (The other students are helpful too in what they cover – they’ll get posts too, just this one focuses on China.)

53 comments

  1. Car(e)-Free LA

    How are you characterizing some of the high-speed new build regional rail systems that are going in? The Pearl River Delta Intercity Railway, for example, seems like a project that could have a lot of interesting data but which doesn’t quite fit the categorization of high speed rail, metro, or regional rail.

  2. Hugh B

    Great post as always. One thing that wasn’t mentioned here was station design. I know that there are airport-like security checks to enter stations, so surely stations are designed with that in mind, but is there a consideration of building stations to function as bomb shelters? I’ve always heard that soviet stations were built so deep for that reason, so it seemed logical that it might be a common trait among militaristic, authoritarian countries (doing a cursory search, it looks like Line 7 in Tehran has some deep stations as well (source: https://financialtribune.com/articles/people/66112/tehran-opens-new-metro-line))

    • Alon Levy

      I did not mention construction methods, but we have looked into this. Yinan says that the underground lines, at least the ones she’s managed to verify, are built as in Continental Europe, i.e. bored tunnel with cut-and-cover stations. I don’t know how deep the stations are, but I imagine that for lines like Line 19 in Shanghai they have to be deep just because they go underneath so much older crap, just like the latter-day projects in Paris, London, Berlin, Milan, and other big cities in this part of the world.

      • Herbert

        The underground of any old city worth its salt looks like Swiss cheese. U5 extension in Berlin had to deal with a pretty “busy” underground, and water, and sand and the demand that stations look pretty… Oh and they found 800 year old stuff…

        • michaelrjames

          And Paris had the peculiar additional issue created by the fact that a lot of the building above ground was made of stone quarried from under the same city! Parts of the city are a veritable honeycomb/Swiss cheese as anyone knows who has done the tour of the catacombs that stretch from the lower 5th & 6th thru the 14th plus 15th & 13th. Of course part of it, accessed at Place Denfert Rochereau, was repurposed as a vast ossuary to store bones cleared out of the ancient decrepit burial grounds in the city.

          But you also triggered a memory of one of those happenstance events that by virtue of shock has imprinted itself on me across all these decades. I was walking across the plaza in front of the Hotel de Ville, exiting the podium at the south-east corner (it steps down to the quai) and was crossing one of those big grates that are common enough in any city with a subway. I looked down and was plunged into a kind of vertigo (which I don’t suffer …) because it was a gigantic shaft and seemed to go down forever. It kind of reminded me of the scene of the giant underground city in Forbidden Planet, created by a hall-of-mirrors effect as if it went down forever (“the Krell underground machine complex, a cube 32 km long on each side”). I am not sure what was down there. Probably car parking and maybe something for the M7 line, and I see from that new cartomap that M11 has a series of storage tracks there and maybe a secret station serving the HdV?

          In these cities we blissfully walk over this kind of thing all the time but are mostly unaware of it. I assume this was a rare case when it was illuminated for some reason and you could see into the bowels d’Enfer!

          • Herbert

            Does Paris Metro also operate on the principle of “we’re digging a hole anyway, let’s build something we might need later while we’re at it”? Berlin has an entire subway line (U10) which mostly exists in this state and the fever-dreams of subway boosters…

        • michaelrjames

          Herbert wrote: “Does Paris Metro also operate on the principle of “we’re digging a hole anyway, let’s build something we might need later while we’re at it”?”

          Surely RER-D qualifies. In one of the biggest holes ever! They completed its platforms at Chatelet in 1977 but they remained unused a decade until 1987, and then another decade before the southern leg to Gare de Lyon was finished. Still waiting for its own tunnel Nord-Chatelet:-)

      • Steven H

        Yeah… at least from my own experience, cut-and-cover stations with bored tunnels are pretty standard for most Chinese cities, at least for the first several lines. In every city I lived or spent time in–Beijing, Shanghai, Hanghzou, and Nanjing–you could follow the routes of future lines by walking from station construction pit to station construction pit. The tunnels between stations were not built cut-and-cover, at least for the most part, but stations definitely were.

        It helps that most stations are built under very large roads, in parks (like Renmin Guanchang in Shanghai), under new malls, or in reclaimed land (in Hong Kong). It’s still disruptive, but those cities are constantly under construction and re-construction; things may have slowed down since I left, but I lived through at least three Beijings during my time there.

        • Alon Levy

          For what it’s worth: in Singapore I saw a cut-and-cover station pit specifically avoid a very wide major street and instead go in a block where they demolished what looked like an old housing project.

          • Herbert

            It appears to me that the European custom of protecting old buildings simply because they are old – especially in densely built places – is something not much shared outside Europe… But that may be a mistaken assumption…

          • yuuka

            Outram Park, I presume? Putting it under the road would have had to run the tunnels deep under the (cut and cover) NEL station in order to get out of the way of that station’s earth retaining structures, and you know the relationship between depth and cost.

            Cut and cover isn’t very futureproof unless you either keep it very compact, which can be hard, or have an idea of what you want to build and put it in the design, like the IND Second System. Then, of course, if you eventually not go ahead with it you’ve built yourself a big white elephant.

          • yuuka

            Saw what you meant – I do recall people living in that particular estate (including some personal acquaintances) being asked to move out, public housing is government land so it’s not covered under “land acquisition” and hence didn’t really surface when I looked in my notes.

            It’s probably because the geography there required them to cut across the street grid from Orchard to Havelock Road. The main body of the station is actually further south, and they’re mining out an underpass from that piece of land to the station itself, so I have no idea why the land acquisition was necessary.

    • Chad N.

      From my travels in Beijing and Shanghai, subway stations universally had very large full mezzanines. There would be several street entrances from opposite corners leading to a common mezzanine, with foot traffic routed to a single security entrance. After security, you have access to the conveyances to the platform (or platforms, in case of interchange stations). Center platforms were most common. Mezzanines were typically not very deep; I don’t remember any extremely long escalators like in DC or Prague.

  3. Eric

    Do we know that China is telling the truth about its construction costs? Maybe there is some sort of government slush fund that can be accessed for cost overruns without being reported?

    • Alon Levy

      Almost certainly? Of notes:
      – Countries with really bad transparency and corruption issues, like the Philippines and Indonesia, do report very high costs. China is not North Korea.
      – China is spending an appreciable fraction of its GDP on infrastructure construction. It’s not actually that easy to hide this amount of money. For the same reason, we know that the rest of China is not Hubei when it comes to the virus.
      – Chinese companies sometimes build subways in poorer countries, like Vietnam, and the results aren’t any more awful than when first-world companies do.
      – The most political embarrassment comes from cost overruns and schedule slips, and not from high absolute costs. China doesn’t appear to have big cost overruns, but schedule slips do happen.

      • Herbert

        It’s harder to hide schedule slips than cost overruns. Opening a half built line is feasible in some circumstances, but usually not….

    • yuuka

      If that fund does exist, it makes you wonder whether access to it requires a tea session with Winnie the Pooh and his Central Commission for Discipline Inspection…

      Although from what I recall, local government is largely responsible for infrastructure construction, so the money has to come out from their pocket anyway and they can’t really go to Pekin with hat in hand. If they run out of money, they’re probably screwed.

      • Herbert

        China is pretty un-centralized actually. If anything, that’s what hampered their Covid response (of note the embarrassment with the sadly deceased ophthalmologist happened at the local level and was later overruled by the higher-ups…)

  4. df1982

    A small nitpick: panglossian means excessively optimistic (from Pangloss, a character in Voltaire’s Candide), not linguistically universal the way you use it.

    • Herbert

      But it SHOULD mean that. After all, “pan” means “all” and “glott/gloss” means “speak”…

  5. Herbert

    We probably don’t have enough of a sample size, but shouldn’t we expect construction cost differences between northern Germany (mostly glacial, sometimes alluvial [“Urstromtal”] sands) and southern Germany (a much more mixed bag of geology, but often solid rock but on the flip side steeper hills and mountains). At a cursory glance this is borne out by Hanover-Würzburg needing a ridiculous amount of tunnels and bridges (is there an English term for the both of them? German has “Ingenieursbauwerke” – “engineered buildings”) and Berlin-Wolfsburg needing none or very few…

    • Alon Levy

      The English term is “civil structures.” I haven’t seen obvious North-South U-Bahn cost differences, but any such comparison would have confounders like Munich’s unusually high wages anyway. This is why having a bigger dataset like China’s is so useful!

  6. Mikel

    The geology argument seems interesting. From an engineering point of view, what does being at the mouth of a river entail WRT construction costs? (I would guess a higher water table and unstable ground, but I’m no expert).

    However, I’m not sure there are many places where an intra-national comparison can be made For example: e.g. Cairo and Buenos Aires are the only subway systems in their respective countries. The only ones that I can think of outside China right now are Saint Petersburg, Barcelona/Valencia, and perhaps Washington DC?

    • Luke

      I think it matters less that a place is on the mouth of a river than it would that a system has to deal with particularly large bodies of water, period. A river like the Seine or Thames is an obstacle, for sure, but breadth seems like the bigger issue. Compare them to, say, the Hudson for NYC, the Han for Seoul, to say nothing about bays like Hangzhou, Tokyo, or Hong Kong. Treacherous geology is obviously problematic, especially if your system is reliant on tunneling, but water’s a barrier whether you’re going over it or under it.

      • Herbert

        Water is also a problem when it’s just a high level of groundwater. You can’t always just lower the water table. And freezing the water or working “in the wet” comes with its own headaches…

    • Alon Levy

      Washington is not in an alluvial plain, it’s at the falls of a river. The only American example similar to the Netherlands or Shanghai is New Orleans, and maaaaybe Hampton Roads, and neither has a subway. Washington has hills; Shanghai doesn’t.

      The implication is probably about water table issues plus very soft soil requiring more TBM shoring, I imagine. But I don’t know.

      • Herbert

        Berlin is sand (and a few single big rocks moved there by glaciers) so far down that geological maps equal a shrug emoji. Hamburg is – to my knowledge – mostly “Geest” (also glacial sands and gravels) plus the network of arms of the Elbe will certainly not make stuff easier. Nuremberg has a mixture of soft sandstone and the alluvial deposits of the Pegnitz river, which however isn’t all that major as rivers go. Munich seems to also be dominated by ice age gravel deposited by glaciers https://en.wikipedia.org/wiki/Munich_gravel_plain but its river (Isar) is probably the most minor of all rivers in German subway cities. Not sure if that tells us anything…

    • fjod

      I’m not an engineer, but from experience living in Holland, there are a few major and costly problems with any kind of ground-disturbing work in alluvial landscapes:

      – higher water table (to the extent that a ‘water table’ is a meaningful concept when it lies centimetres below the ground). This means pumping water out – and, importantly, pumping the water to somewhere like a lake or river. Almost every construction project in Holland requires a continuously-operating pump, even little roadworks. For major projects, this is a huge worry, as failing pumps can have disastrous consequences very quickly.

      – soil: alluvial soil is recently deposited and thus less stable than other soils and bedrocks; it’s uncompacted, loose and prone to settling, and comprised of waterlogged sands, peats and gravels whose properties are almost more like liquid than solid. It’s therefore often just bad for tunnelling, unable to support structures, prone to causing subsidence etc. This means deeper tunnels, more geological surveying and monitoring, and possible routing issues (to avoid particularly unstable formations, or stick to stable ones).

      – no bedrock: nothing to anchor piles or foundations to, meaning these structures must be larger/deeper. This also applies to buildings’ foundations, meaning that tunnels must be even deeper (as well as having their own deep foundations) to avoid disturbing buildings’ foundations.

      That’s why, even if you avoid major water bodies (cf Luke’s comment above), ground-disturbing construction is more costly on alluvium. Also: is Hamburg vs. elsewhere in Germany a good comparison for this?

      • Herbert

        As I pointed out above, all four German subway cities (with Nuremberg the only partial exception) sit on sand and gravel from the last ice age and/or a river. At least in Munich you can get to the stuff below it with geological surveying (and probably modern foundations) and in Nuremberg you’ve got some sandstone from the Triassic….

      • Sascha Claus

        »Also: is Hamburg vs. elsewhere in Germany a good comparison for this?
        Maybe ask an expert? I found Hamburgs geologischer Untergrund in the Wikipedia, which you can put into the translator of your choice.
        Highlights: ① Hamburg is far from the coast and on an estuary, so alluvial sands from the River Elbe might not matter at all.
        ② The Elster ice age’s glaciers carved deep ravines perpendicular to the Elbe that got later filled with sand.
        ③ The Saale ice age’s glaciers spread a lot of sand, gravel and debris on their way south.
        ④ The Vistula ice age’s glaciers ended their journey around Hamburg and, when melting, placed the alluvial fans of their meltwater around the area.
        Sounds interesting, but not exactly unique in Germany. So, and now I have to recover from the translation “Magpie ice age” …

        • fjod

          Yep – I phrased this as a question because my knowledge of German geology is essentially zero.

      • Luke

        Appreciate the education! It does make sense that water-logged soil would tend to be sort of over compliant and bad for putting what’s supposed to be a hard, permanent thing inside it, but does e.g. granite or other hard rock not increase cost/time (thereby cost) of tunneling? I’ve always wondered about the development of floating structures, either over soft ground/water or underneath it. There seem to be obvious limitations for something like rail lines, at least,where there’s a very, very small amount of play permissible without making them unusuable, but could dampening of movement be useful to abate that problem? I’m very much so a novice about this type of engineering.

        • michaelrjames

          https://abcnews.go.com/International/crossing-norways-fjords-easier-worlds-submerged-floating-tunnel/story?id=60812122
          Crossing Norway’s fjords is going to get easier with world’s first submerged floating tunnel
          The tunnel would sit about 100 feet below the surface of a fjord.
          Dragana Jovanovic, 04 Feb, 2019

          Estimated cost: $40bn.
          And there’s the rub. Not quite sure why they are sooo expensive. The recently completed floating bridge across Lake Washington in Seattle cost $4.5bn and it spans just 2.3km. They do use masses and masses of concrete (and steel), and it is an American bridge so is big (6 lanes) but even so, intuitively one imagines a floating pontoon should not be so expensive …

        • Herbert

          Industrial use diamond has become pretty cheap and pretty versatile (you can even coat something in a very thin layer of diamond – it does funny things for heat conduction) so the downsides of hard rock would, I think, be dwarfed by their upsides. You can have “bare rock” in the old (like billions of years old) rock that makes up much of Scandinavia and it won’t crumble…

    • Tonami Playman

      What is the frequency of the trains on the Beijing Suburban Railway?. I remember reading somewhere that it’s something like 2hrs which is very low for intercity travel talk less of commuter travel. I think these lines are highly underutilized and Beijing has some ways to go to implement useful commuter rail like in Seoul, Osaka or Tokyo.

      I seem to remember the Chengdu–Dujiangyan intercity railway in Chengdu. Which is roughly 94km long and 21 stations, an interstation spacing of 4.7km which is close to the distance between most Rapid services on Japanese commuter rail. Although it is branded as high speed rail using 250km/h capable rolling stock, Looking at the trian schedule, There are about 35 C trains from Chengdu to Dujiangyan from 6:00am to 22:42pm which equates to roughly half hourly service. Still Regional Bahn, but far better than what Beijing suburban railway is offering.

      • Tonami Playman

        In addition, It’s roughly 49km from Chengdu station to Pengzhou station and takes 45mins and 33km from Xipu station to Pengzhou and takes 29mins. So 65km/h and 68km/h average speed respectively which is not far from what Tobu does with it’s expresses on the 41km long Skytree line.

      • Yinan

        I could probably answer your concerns a little bit. If we compare either Yangtze (Jiangsu-Zhejiang-Shanghai) or Pearl River Delta (cities in Guangdong) with Beijing-Tianjin-Hebei region, Beijing is so special because of its political status. The former two delta areas are aiming for a huge economy development through connecting cities together and they have to.

        From my own experience living in Beijing, if you are living in outer suburbs like Huairou, it’s better to drive or take buses. But if you live in the outskirts that have subways, people tend to use them instead. It is true that the Beijing Suburban Railway is highly underutilized, because it is hard to transfer to another transit, and other policy issues. However, with the integrative development of Beijing-Tianjin-Hebei region, it is predict that Beijing will make more efforts in the development of its suburban railway system.

        I also feel it is kind of strange that Beijing probably is the only metropolis that is surrounded by a province which is very underdeveloped..

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