Low- and Medium-Cost Countries
I was asked a very good and very difficult question in comments yesterday:
What, specifically, are the best practices we all should be learning from the lower cost countries? I’m reading a lot of what not to do, but not on what do to.
I’ve gone a lot over bad industry practices leading to high costs in the Anglosphere, especially the United States, especially New York, and to some extent also on bad practices in developing countries like India. These I am contrasting with a set of good practices from a host of low-cost countries like Spain and Italy as well as medium-cost ones like Germany and France.
However, the question remains, what distinguishes low- and medium-cost countries? The differences between them are not small – underground rail extensions in German cities are averaging around 250 million euros per kilometer, and ones in French cities are around 200 million or just less than that, whereas Milan and Turin average around 100 million, and Spanish cities average even less. Germany is a higher-cost and higher-wage country than Italy and Spain, but Berlin wages are not higher than Madrid and Milan wages, and within these countries, richer cities don’t really have higher costs (Milan is cheaper to tunnel in than Naples, Madrid has lower costs than Barcelona and similar costs to the rest of Spain, the cheapest German tunneling seems to be in Hamburg of all places). No: this is almost certainly a real difference in institutions that enables Southern Europe, Scandinavia, South Korea, and Turkey to dig tunnels at one third to one half the cost of Germany.
This argues in favor of doing a deep dive case on a medium-cost example like Paris or Berlin, in addition to the work we’re doing on low-cost Milan and Istanbul. The problem is that it’s not clear, so far, what to even look at. I have a decent idea of what the difference between the high-cost world and the rest of the world is – but applying it to the low- and medium-cost world is dicey.
In-house engineering capacity
So much of the problem in the Anglosphere seems to come from the loss of in-house engineering capacity, and its replacement with private consultants. The latest iteration of this is the penchant for design-build contracts, in which the state contracts with one company to handle the entire process and doesn’t have much if any public-sector oversight. Design-build doesn’t exist in any of the countries in Continental Europe I have any familiarity with; France is looking into it as a reform in the future, but only under the aegis of a large public-sector planning team coordinating the private-sector design and construction. Moreover, Canada’s recent adoption of design-build, coming from an ideology imported from Britain and then falsely claimed to come from Madrid, preceded an explosion in costs.
However, this does not really explain the difference between France or Germany and Scandinavia or Southern Europe. Norway and Spain have separation of design and construction; so does France. Italy and Spain have in-house engineering teams responsible for a great deal of the design, but to some extent France does too, with a large in-house planning team overseeing the private-sector designs.
Procurement issues can’t really distinguish the low- from medium-cost world either. Madrid does not hand out lowest-bid contracts – at least in its big wave of expansion in the 1990s and 2000s, contracts were given 50% on the basis of a technical score marked by the in-house engineering team, 30% on that of cost, and 20% on that of how fast they could finish the project. Paris doesn’t have a 50-30-20 split but a 60-40 one; that may be significant, but I doubt it. Both systems contrast with the American system of lowest bid, or sometimes 30-70 in California. Moreover, Turkey is lowest-bid, but it’s a repeated game due to the country’s fast growth and construction – contractors who screw up do get penalized in future projects.
Citizen voice and NIMBYism
Germany has a huge problem with NIMBYism. Key segments of the national passenger rail network, for example Hamburg-Hanover, remain slow because local NIMBYs who don’t like fast trains have litigated high-speed rail to death. France has had anti-LGV NIMBYism in Provence as well, which NIMBYism is often extralegal (that is, aggrieved drivers blocking roads); this forced the state to change its plans for a high-speed railway to Nice from a mostly above-ground inland route to a tunnel-heavy coastal route through the Maritime Alps and, as the cost was prohibitive, eventually downgrade into a mixture of high- and low-speed rail line.
As I understand it, this is less of an issue in Southern Europe. I do not know to what extent it’s a problem in Scandinavia and Switzerland; Switzerland does have a lot of bucolic NIMBYism, where “bucolic” means “the city as it looked in 1957,” but I don’t think it’s had any that successfully scuttled infrastructure, and overall the political imperative there seems to reduce costs more than anything.
The NIMBY issue is also important in the US and UK. In the US, NIMBYs are not legally strong, but politicians prefer to avoid the appearance of controversy and therefore give local actors whatever they ask for, no matter the cost; many sources told Eric and me versions of this story regarding the high cost of stations on the Green Line Extension (which are, to be clear, maybe 20% of the cost of the whole project). Brooks-Liscow favor this explanation for the internal increase in the cost of highways in the US from the 1970s onward.
I do not know to what extent there’s an institutional explanation here. I do not even know if this is a real difference between on the one hand France, Germany, Austria, the Netherlands, most of the 2004-7 EU accession countries, and Japan, and on the other hand Southern Europe, Bulgaria, Turkey, and South Korea. It’s possible that this is a bigger problem in Northern Italy than I realize.
The most worrying possibility is that this is a real difference, and it comes not from something about institutions, but from surplus extraction. The European core and Japan are rich, and at $150 million/km, subways there would create immense social surplus and decent financial surplus. (The Japanese state is refusing to build at $500 million/km because it wants a 30-year financial payback). Southern Europe is less rich, so there is less social surplus to extract by local actors wanting to dip their beaks in state money; Switzerland and the Nordic countries are rich, but their cities are smaller and farther-apart, so there is less surplus there too.
There are a lot of objections that can be raised to the surplus extraction hypothesis: there is plenty of surplus in Seoul and not much in Vienna or Prague or Bucharest or Warsaw or Tel Aviv, Japan already reached $250 million/km in the 1970s when it was a lot poorer than Korea is today, the surplus hypothesis predicts that there should be higher costs in richer cities within the same country and yet this is not observed, local interference with Métro expansion in Paris unlike with LGVs doesn’t seem very significant.
Conclusion
There’s no good answer to what distinguishes low- from medium-cost countries. I wish more people here and in France were interested in this question – the activist sphere in Berlin seems far more interested in trams and bike lanes than in rapid transit. Nor do I imagine Germans and French are ready to hear that there’s something the Italians and Spaniards and Turks do better than they do. But it’s something Germany is going to need to learn to deal with if it wants better infrastructure; on the same budget, it can get 2-3 times as much as it’s getting now.
Pedestrian Observations 
With regards to the reduction of in-house engineering capacity, what’s more critical – the loss of ability for institutions to complete designs in-house (i.e., having a large and competent group at junior and intermediate levels), or the fact that reduction in design staff eventually trickles up and creates senior leadership with no design background?
It seems that the former shouldn’t have to result in the latter, but the limited amount of movement between senior staff (at least in Canada) between private and public spheres makes it so and means that senior public leaders are hampered by a lack of design experience at a junior/intermediate level.
Really? Admittedly it’s been a looong time since I had direct experience but back then, for EU research grants (obligatory cross-country involvement, strongly advised to have a ‘balanced’ mix of rich-northern and less-rich southern/Med/eastern partners) the much higher cost of Germans was well known. It was comprised of two factors. One was the higher basal salaries, for example I recall that PhD students cost as much as others post-docs (in other words, unlike most of the world Germany pays doctoral students–the workhorses of the research world–a living wage while the rest pay student-type stipends, ie. peanuts). The second was the much higher social charges (or “on-costs”) which very roughly were 100% for Germans but about 50% for English or French (can’t quite remember for Italians). Maybe this has changed but I doubt it because it is deeply structural (unless Schäuble did change it?). However, I think we’re all agreed that salaries per se can’t account for the differences in costs.
As an aside, I read recently that Macron wants to bring French scientific salaries up to peer country normes. It is quite true that those salaries are lowish and while once it may have been justified by various arguments (related to most being on the equivalent of tenure-track, ie security, plus being civil service re retirement plans & benefits) that really wasn’t enough. I don’t think one can make up in later or mid-career what one loses in early career. And globalisation including housing cost inflation has made it worse. Yes, it’s another part of the middle-class professions at risk of slipping down & out. In the US it is not so much that these professions are low paid relative to other countries (they aren’t) but that they are low-paid relative to the money professions (law, business, certain specific tech areas) so that about 70% of STEM positions, including doctoral and post-doctoral, are filled by foreigners. People who are aware of this are in a bit of a panic over the near-term future re both Trump and the pandemic.
Anyway, I find Italy being a low-cost infrastructure country very intriguing. Maybe I am too enrapt by old cliches but efficiency, especially by government, doesn’t come to mind and highest standards of corporate behaviour doesn’t either. But I understand there is strong competition between companies (something shared with Japan & Korea?) and perhaps acceptance that the Italian state simply won’t spend much on such stuff?
It depends so, so heavily on one’s field. In tech, America >> Berlin = Munich > Paris. But on average, i.e. Eurostat’s primary income balance, Berlin is a hair below Milan and somewhat below Lombardy.
My understanding of Italy is that the corruption there is specifically not about political interference with engineering, but rather about low tax compliance among family businesses, which then can’t expand and professionalize or else they’d have to pay taxes. Italy has a good deal of clientelism, but the management is pretty professional, the opposite of the US, where management is politicized whereas line workers are hired based on apolitical civil service criteria (plus some legit nepotism in the trades, but that’s not the same as hiring construction workers based on who they voted for).
Berlin is, or at least used to be, one of a few European capitals with lower salaries than the country average.
I think when it comes to construction costs in Berlin, there are several factors; the civil service was gutted following the 2001 banking scandal under the neoliberal (later revealing himself as a fascist) senator of finances T. Sarrazin. To this day “die Verwaltung” is often blamed for the foot dragging pace of tram and bike lane expansion. The U5 extension was of course built right in the 800 year old parts of Berlin, under water and with a political desire for “representative” stations and in the sandy Berlin soil. The pace of subway construction also significantly reduced after reunification when subsidies from both east and west suddenly dried up.
S21 and Siemensbahn will be interesting case studies of Berlin heavy rail in the 20s…
There also seems to be “Berlin cost control” of replacing proposed subways (U5 from Hauptbahnhof to Tegel airport) with trams…
>Berlin cost control
This might be an interesting thing to pick up on. Given the size of U-Bahn trains and their carrying capacity compared to a tram, there might not be significant benefit that a U-Bahn extension provides, which means the barrier to entry for U-Bahn might be higher if trams can do a similar job for much less. While this doesn’t apply to U5 per se, it probably says something when Stadler has to use their tram product as a basis for Kleinprofil trains.
Even DLR trains are bigger than tube trains and that’s saying something about the talk of extending the DLR from Bank to Charing Cross, never mind all the Crossrails they’re talking about. But these are unique circumstances posed by really old infrastructure, and any new build subway should seriously consider using larger vehicles to make the investment worth it.
The Kleinprofil was based on trams back in the early 20th century….
Isn’t that the point, pretty much?
They could arguably get away with lower subway costs due to the size of the trains. So if the capacity that can be provided is restricted due to such legacy reasons, why not just build trams on the surface instead? Per-passenger it may have a higher ROI than digging for a subway.
There is no way that construction wages on major projects are lower in Berlin than in Madrid or Milan, because the German construction sector is heavily unionised and has national wage rates, albeit with a small variation between the old West and East (housing construction is different, because there will often be non-nationals employed to varying degrees of legality).
But I think the main point is that wages are such a small part of the project’s total costs that they can’t account for the huge divergences in construction costs. Project management seems to be the real key, and I think the quality of in-house oversight of the project is the major factor.
There is also the problem of a culture of failure creating exponential increases in costs. E.g. compare Country A and Country B, both budgeting equivalent projects (X) for $1 billion. Country A sticks to the budget, but Country B goes 50% over (to $1.5 billion) due to mismanagement. Instead of learning what went wrong, Country B accepts that this is what those kinds of projects cost, so when it comes to Project Y a few years later, A budgets for $1 billion, and B now budgets for $1.5 billion. Because it hasn’t rectified its management process, the project goes 50% over budget again, increasing the cost to $2.25 billion, while A is still at $1 billion. After a few decades of this process, the gap becomes huge.
The thing you haven’t spoken about is the class system. In much of Europe (and Asia) the upper class will be less static due to various upheavals that have taken place, whereas in the UK the same people have been in charge since ~1066.
I also wonder whether the US rich are mostly rich people from Europe who fled after various upheavals – especially as in the US there is even less morality expected of the rich than in the UK – see e.g Johnson vs Trump. Johnson at least isn’t a rapist or child abuser.
I say this because the UK upper class seem to be jaw droppingly incompetent. They’d be better at running the country if they’d gone to Slough’s worst state school than Eton etc.
I’m hardly one to defend the Brit upper class but I don’t think it is incompetence. In some ways they are wildly successful–one of the last surviving monarchies (in the developed world in the 21st century), retaining their vast landholdings and privilege. And that is their main priority, not necessarily the nation’s interest which will be sacrificed if there is a conflict between the two. It’s why the UK has the worst inequality in the rich half of the EU. It is the main reason behind Brexit because the EU ultimately threatens their cosy financial system. As the maxim says, follow the money, and you’ll see this in the main force driving Brexit. Don’t be fooled by all the distraction about free movement of people, or over-regulation blah blah, which is all just smoke to get the ignorant masses fired up.
Half of England’s land is owned by less than 1% of the population. The homeowners’ share adds up to just 5%: “A few thousand dukes, baronets and country squires own far more land than all of Middle England put together.” One fifth of land is not registered because it hasn’t changed ownership since the first records of the Domesday Book in 1086. Huge swathes of central London are privately owned while their leaseholders pay all the taxes and upkeep. Hugh Grosvenor (a.k.a. Duke of Westminster, and Marquess of Westminster, Earl Grosvenor, Viscount Belgrave and Baron Grosvenor etc) inherited his $20 billion estate (mostly comprising freehold of all of Mayfair) a few years ago at age 26 (without paying a penny of tax) making him the world’s richest person under age 30. You thought the US owned their London embassy in Grosvenor Square? Nope, it was “given” to the US after the war by his father Gerald Grosvenor at peppercorn rent but the site reverted to Grosvenor when the US moved the embassy recently. “In response to an American offer to buy the site outright, the duke’s trustee requested the return of ancestral lands confiscated following the American Revolutionary War, namely the city of Miami.” The Eero Saarinen heritage-listed building built by the US was sold to the Qataris. But the land remains forever the Grosvenors and you can be sure the new leaseholders are not paying a peppercorn rent even though it is they who will pay the $100m or whatever for its refurbishment/repurposing etc.
It looks like incompetence because it is simply becoming unsustainable but it is quite remarkable that such a tiny elite in a small country could dominate the planet for several centuries and today still retains immense power and wealth. The nation may have lost the colonies but the elite in the City of London often retained the juicy bits. They retain majority shareholding in the world’s two biggest mining companies (#1 BHP, #2 Rio Tinto) both listed on three stock exchanges (NY, Lon, Aus) and with HQ in London, despite most of the wealth being produced in Australia. HSBC was one of the first truly global banks and it relocated its domicile from HK to London before the Chinese handover. No accident that London remains the world capital (ahead of NY) of international finance and is at the centre of the spiders web of tax havens scattered around the former empire (Caymans, BVI, Bahamas, Channel Islands etc).
their leaseholders pay all the taxes and upkeep.
Do you think landlords anywhere else in the world are running not for profit charities that give away whatever their taxes, maintenance etc costs are? The costs are broken out in more detail depending on the lease but the tenants are paying for everything.
ancestral lands confiscated following the American Revolutionary War, namely the city of Miami.”
Surely that was said in jest. Their lawyers are bright enough…. to check Wikipedia… and find out that Spain didn’t officially cede what is now Florida and parts of Alabama and Mississippi to the U.S. until 1821. They got problems with land in the U.S. they have to start with this.
https://en.wikipedia.org/wiki/Treaty_of_Paris_(1783)
Leasing the land under your building is quite common. I’m sure the State Department had very knowledgeable competent lawyers approved the lease.
Sure, but the Grosvenors didn’t become among the richest in the UK by selling their land, even to the biggest richest nation in the world. I don’t know what the lease was he gave the US for the embassy site but it need be no different to any other except perhaps greater security for the tenant, and the peppercorn rent. This may have been a kind of gift to the US and indirectly to the UK but he assuredly benefited from having such a prestigious embassy (US’s biggest) and then a heritage Saarinen building in the middle of Mayfair and on Grosvenor square. It reinforced Mayfair’s premium location with its remaining private homes, embassies and luxury hotels. It’s why Mayfair is the top valued property in Monopoly. Equally, when the US quits the site the lease lapses and reverts to the landowner. As it happens the US did ok because the building itself became a design icon and was worth a lot to a “collector” like the Qataris (but it being almost 70y old and post-war, it is probably fairly mediocre construction-wise and doubtless needs a massive overhaul).
This kind of leaseholding will be different and more onerous than American ones (though the southern sharecropper arrangement has similar toxic wealth-sapping of the lessor).They grew out of the Middle Ages and were essential to the feudal hierarchy; a lord would own land and the tenants became vassals. Even in the UK there has been 40 years of slow whittling away at them by the law, not only problems of exploitation but also of absentee landlords, and real estate speculators continue to try to exploit it:
Coincidentally I have just been reading Barry Miles biog of Paul McCartney and was interested about his first house purchase. This was after the amazing period spanning 3 years when he lived in the grand house of the parents of Jane and her brother Peter Asher in central London. He had an attic room sharing the top floor with Peter; it was in this room that he famously awoke one morning with Yesterday in his memory. (Peter was Peter & Gordon who had hits with McCartney compositions like World without Love not considered good enough for The Beatles but it still made #1 in UK & US; later he became Apple Records first A&R guy and then for himself his first signing was James Taylor …)
As we know, Paul was no dummy. He bought the house on Cavendish Avenue in St John’s Wood, directly west of Regents Park and stone’s throw from Lord’s Cricket ground (he writes of watching test cricket from his top floor, probably an exaggeration) and only a few blocks from the Abbey Road studios.
Also, this kind of medieval private landowner-leaseholder arrangement is very different to when the Crown/State is the owner such as in Hong Kong (100% of land), or the Australian Capital Territory where it isn’t functionally much different to ownership.
Nah, nevermind. You’ll probably lose focus and ramble on about South African mines or guano or tinned beef and Van Gogh’s lease terms.
South African mines or guano or tinned beef …. never.
But Van Gogh, as a matter of fact just the other day I saw a doco on his last days in Auvers-sur-Oise and … (continued on p98).
A lot of this feels like smart moves made a long time ago and not that the current crop are particularly bright.
Not really. The Big Bang financial deregulation of the 80s gave them another 4 decades reprieve. But it was never sustainable, especially the Anglosphere which didn’t use the money tsunami to build up infrastructure, improve healthcare, education etc but instead to enrich the 1%. And a big part of the explosion in money was utterly artificial and counterproductive: the rise in cost of housing. Most of the rich world has big debt but the Anglosphere has massive personal debt on top of state debt and large inequality. Brexit (or on the other side of the pond, Trump) cannot save them this time.
The Conservatives inability to elect basic administrators who are able to do the job is more likely to destroy the aristocracy than anything else really. You can see that with Labour gaining 10-15 points in the polls under Coronavirus, if the upper classes were competent that would never have happened because they’d have handled the crisis well.
The same on housing is true with the doubling of ground rent and things like Grenfell – if instead they’d tied ground rent to inflation and let housing be administered by people who are competent but perhaps a little expensive then there would be much much less pressure to get rid of leasehold. Any left wing government is likely to get rid of leasehold because of the problems that have come to light publicly in the last decade. And if they’d been less greedy/more competent then I can have seen it continuing for another 100+ years.
@Matthew Hutton.
We are in agreement about most of this but you are talking phenomenology not cause-and-effect. It looks like incompetence–and often is incompetence–but the cause is their increasingly desperate attempts to prevent the inevitable, which is the erosion of their position of privilege (rather than any innate talent etc) that gives them everything they value in their miserable lives. There was a good piece in The Guardian over the weekend by one of their resident socialists (necessarily this is heavily selected):
Sure, some of this reluctance to learn from Sweden is incompetence but actually it is overwhelmingly their innate horror of such a social system because–even if many are too dim to understand precisely why–it profoundly threatens them and their system of privilege.
And Brexit seems to have made the EU work together more and has made Brussels substantially more popular, so that hasn’t really worked regardless of what happens to the UK. Most likely we will rejoin on lesser terms.
The rest of the EU can decline re-entrance, can’t they?
I fear we have gone wildly off topic. But I will answer your question – theoretically the EU could deny us rejoining, but I doubt they will – especially as we are a net contributor.
The Italian upper class is very static, I think? Lots of small business families that trace themselves back centuries, low income mobility.
I think the difference is that the British (and to some extent American) upper class thought they ran the world. There’s only so arrogant that you can get when you run a company of 50 people and there’s a lot more competition driving you on.
I suspect that the reality of the British empire was that the local decision makers who were probably upper middle class did the actual running of the show with little interference from the aristocracy given the distance involved.
my understanding is that the people who ran business in the British Empire were rather outside of the ruling circles – often drawn from protestant dissenter population who, being non-Anglicans, could not convert their fortunes into land and thereby join the aristocracy proper and thus maximized their social position by reinvesting in their businesses.
It is also my understanding that one of the functions of the Empire was to allow the failsons of the aristocracy to go forth and rule over various imperial subjects, safely removing them and their pernicious influence from the metropole.
The Liberal Party certainly traditionally had a base among the dissenter sects….
Sounds like we agree but your language is more precise 🙂.
The WASP elite not only thought they ran the world. At times they kind of did in Latin America at least. They even modeled lot of their behavior on the British upper class down to boarding schools and a Season despite the later not making sense in the United States because no monarchy.
I’m pretty sure boarding schools are a big part of the problem because they give the impression to children that they aren’t loved. Especially when other non boarding schools are decent and available.
Elite private schools are part of a problem whether they are boarding schools or day schools. I went to one of the most academically oriented public high schools in the United States. Many of my classmates went to Ivys and other schools were large numbers of private school educated children ended up. They reported to being floored by the students at elite private schools. According to my brother, elite private schools operate as mini-colleges more than even the best public schools do and because they drill leadership into their student’s head. As in you are destined to be leaders, etc.
A lot of that is just arrogance.
How many of them know about public praise and private criticism or about continuous improvement, both of which have been around in leadership books etc for at least decades.
@Matthew Hutton “A lot of that is just arrogance.”
Of course it is. It is a hugely important characteristic in successful people and can override lack of talent, slow learning ability, bungling incompetence and overt stupidity. If you have enough self-belief, especially the genuine sort, ie. intrinsic that cannot be easily learned later in life, and your born privilege provides protection against things (often of your own doing) that would flatten people without such protection, then the most fantastically inappropriate people can rise to the top. Even to the presidency.
It’s the reason why ambitious parents make sure their little dim Johnny gets to the “best” schools. And it’s summarised in the maxim “the British empire was won on the playing fields of Eton”. (The original was apparently “the battle of Waterloo” but this is its sense.) Just like with Trump even a bumbling clown like Boris with no discernible talent at leadership, some complete morons can rise to Prime Minister with Eton-Oxford on their cv and enough deep-seated self-belief that they belong there.
But it has the inverse effect too: sometimes those who don’t have Ivy League or Eton-Oxbridge on their cv, but have the talent and drive end up being driven crazy by the system. Witness Nixon who was offered a place at Harvard but his parents couldn’t afford it so he went to a modest college but the system of privilege and entitlement he fought at every step twisted him up so much it turned pathological when he finally got to the WH (well, long before he reached the top but there it manifested itself in extremis).
I would say NIMBYs are different in France and Switzerland. If you live in the French countryside, there is a much benefit in having a TGV line in your back-yard as having a plane fly overhead, and planes can go elsewhere than Paris. In Switzerland, train projects typically benefit intercity, regional, and cargo trains, so claiming they have no benefit is harder…
It’s also harder to be a NIMBY against something that has already been approved by referendum, which big rail projects in Switzerland usually are….
Spain has little NIMBYism outside Barcelona, really. Barcelona had a metro tunnel collapse a few years ago that has led to a generalized paranoia of tunneling under buildings, leading to some additional costs. When the authorities really do want to get something done (say, a HSR tunnel under the Sagrada Familia) conservationists can litigate as much as they want, but construction does not stop. Takings are also quite favorable to the administration; recent legislation has made it a bit less confiscatory, but if the government wants to public domain your property, you will get rolled over.
Once a project is selected, it is pretty much impossible to stop it. Planning stages are lenghty and allow for considerable consultation, but once ADIF wants to build, it cannot and will not be stopped.
If anything, Spain has reverse NIMBYism in places. There have been violent protests in Murcia calling ADIF to put mainline and commuter rail in a tunnel instead of leaving the line in the surface. This is a common occurrence, and has created a lot of pointless tunnels in some places.
The planning part is what I think really defines the Spain model .ADIF usually has at least 2-3 “estudios informativos”, each more detailed than the last, and the final one is VERY close to a full project. Then they bid an “anteproyecto” that goes to an engineering firm that WILL NOT build the line. ADIF has a lot of information when they put contracts up for bid, so they really can afford to rate people on technical merits as they have a very good sense on what is feasible.
Germany and the US have takings laws that are favorable to the state too. The issue is more political opposition and general litigation over unspecified damages, or even civil society groups litigating on the environment’s behalf (thus, a Bavarian AfD-affiliated group held up a Tesla gigafactory in Brandenburg in the courts, making up excuses while its real reason for opposing the factory was that it would employ immigrants).
And people wanting tunnels instead of above-ground or at-grade rail is a kind of NIMBYism too, e.g. the Groene Hart tunnel in Holland and countless American demands for tunnels on high-speed rail lines that turn into vaporware.
I wouldn’t say that American NIMBYs are politically weak even if they don’t formally have a lot of political power. Since a lot of these decisions are made at the local level in the United States and are subject to intensive reviews, older voters who have time to show up at meetings can gum up the works a lot. These voters tend to be NIMBYs. Likewise, American NIMBYs have been able to use environmental impact review and historic preservation laws to stop development.
Thank you for taking the time to answer my question!
A lot of your answer seems to focus on soft costs, as various public and private actors place demands on transit project (whether to mitigate a real or perceived externalities or just straight rent seeking), but are you able to measure if there is also a real difference in hard costs between countries? Or is the difficulty that the Swiss, Germans, and Spanish will go build what is functionally an identical project and end up with wildly different cost structures?
Curious if there are rules of thumbs that seem to extend across geographies. Like, “always cut and cover a tunnel when possible” or “build where people will be (ROW is cheap) rather than where they are” or “voter approved projects are cheaper because of the perceived political consensus” or “the sweet spot between speed and cost is X”, etc.
I genuinely don’t know.
One thing I’ll say is to cut and cover when possible, but that’s almost never done due to disruption, even in places where the disruption would be limited, like very wide roads.
And there are the people who think other people using trains turns us all into Communists.
https://www.newsweek.com/will-why-liberals-love-trains-68597
Yeah, I suspect that this is why Texas HSR is so expensive: conservative hostility -> Abbott has to roll on eggshells -> no state backing for takings or land swaps -> 50% elevated construction in flat terrain -> $$$.
@adirondacker: “And there are the people who think other people using trains turns us all into Communists.”
We can agree on that:
Why do conservatives hate trains so much?
Here is a link that works.
https://slate.com/news-and-politics/2011/03/why-do-conservatives-hate-trains-so-much.html
There is a whole industry of right wing think tanks that come up with all sorts of reasons why rich white people and people who think playing along with the rich people will make them rich, don’t have to encounter non-rich people or even brown people. And why the government shouldn’t spend any money on them. A lot of them are assholes in general and maybe it’s better for the rest of us they are sequestered away in an automobile. Current polls here in the States having running at about 40 percent.
Looking at this from my Nordic (Finnish) perspective with some recent experience with major project management, I would postulate that there are many factors pulling in various directions.
Approval processes are certainly one. The longer a project takes, the more it will cost. Getting intercity projects approved in Germany is apparently very difficult. Environmental regulations and lobbies are strong and court (judicial review) processes tend to be unavoidable. I don’t know how far this applies to projects within cities though. Here in Finland there is tendency towards consensus. Once a project is approved it will usually progress quite well. There is growing tension around environmental issues in cities, but still manageable. I believe things are broadly similar in Sweden. I did note that the Aarhus tramway project spent about half a million euros on their environmental impact assessment, when we spent about a million or our whole feasibility study for a similar project.
In-house engineering capability is a pet peeve of mine. That being said ours has eroded a lot over the years and we still manage quite well. We are a small market and our consulting engineers will generally try to do a good job. Nobody wants a bad reputation and we do score technical merit for procurement. For a typical project we will engage a project management / construction consultant to help us run the project for us and procure the actual construction. Design build does appear, but mostly for roads.
Project scope is a big question. For instance we don’t usually include costs from contaminated land in our project costs in Helsinki. The city owns most of the land and has a separate budget for land cleanup. The principle is that each project receives clean land whether it is internal or external. And because we own most of the land, we don’t incur land acquisition costs. Even when we do, we often don’t allocate them as project costs. The city has a unit for land management with their own budget. Most projects will generate significant returns for this department, so they can afford to spend a bit in return.
There are also many ways to scope eg. utility diversions. In the UK they tend to be 100 % project costs, in France I believe utility owners cover 95 %. We have a standing agreement on how to share costs with utility owners including how to take the age of assets into account. It helps that water and sewage are managed by a public sector organization and Helsinki still owns the local energy company (electricity and district heating).
Cut and cover versus tunnelling is strongly linked to ground conditions. With our bedrock, deep bore (blast) tunnelling can be very efficient. Linking to the surface is expensive. Cut and cover would often be terrible as rock would already be in the way. Things can be very different for different soil types.
Finally: project alliances have become quite popular here over the last few years. These are contractual (commercial) arrangements for integrated project delivery to align risks and rewards between the participants. Sweden also uses a lot of similar integrated delivery and early contractor involvement (samverkansentreprenad). I’m currently working in two project alliances. https://www.vttresearch.com/sites/default/files/pdf/tiedotteet/2009/T2472.pdf