How Sandbagged Costs Become Real
Sandbagging is the practice of making a proposal one does not wish to see enacted look a lot weaker than it is. In infrastructure, this usually takes the form of making the cost look a lot higher than it needs to be, by including extra scope, assuming constraints that are not in fact binding, or just using high-end estimates for costs and low-end estimates for benefits. Unfortunately, once a sandbagged estimate circulates, it becomes real: doing the project cleanly without the extras and without fake constraints becomes politically difficult, especially if the sandbaggers are still in charge.
Examples of sandbagging
I’ve written before about some ways Massachusetts sandbags commuter rail electrification and the North-South Rail Link. In both cases, Governor Charlie Baker and the state’s Department of Transportation are uninterested in commuter rail modernization and therefore ensured the studies in that direction would put their fingers on the scale to arrive at the desired conclusion. As we will see, the electrification sandbag is one example of how sandbagged estimates can become real.
In New York, the best example is of sandbagging alternatives. Disgraced then-governor Andrew Cuomo wanted to build a people mover to LaGuardia Airport in the wrong direction, and to that effect, Port Authority made a study that found ways to sandbag other alignments; here at least there’s a happy ending, in that as soon as Cuomo left office, the process was restarted and the rapid transit options studied the most seriously are the better ones.
Another example I have just seen is in Philadelphia. There have long been calls for extending the subway to the northeast along Roosevelt Boulevard; Pennsylvania DOT has just released a cost estimate of $1-4 billion/mile ($600 million-$2.5 billion/km). The high end would beat both phases of Second Avenue Subway, in an environment that both is objectively easier to tunnel in and has a recent history of building and operating services much less expensively than New York.
How to sandbag public transportation
An obstructionist manager who does not care much for public transit, or doesn’t care about the specific project being proposed, has a number of tools with which they can make costs appear higher and benefits appear lower. These are not hard to bake into an official proposal. These include the following:
- Invocation of NIMBYs as a reason not to build. The NIMBYs in question can be a complete phantom – perhaps the region in question is supportive of transit expansion, or perhaps there was NIMBYism in recent memory but the NIMBYs have since died or moved away. Or they can be real but far less powerful than the obstructionist says, with a recent history of the state beating NIMBYs in court when it cares.
- Scope creep. Complex public transportation projects often require additional scope to be viable – for example, regional rail tunnels often require additional spending on surface improvements for the branches that are to use the tunnels. How much extra scope is required is a subtle technical question and there is usually room for creative innovation for how to schedule around bottlenecks (whence the Swiss slogan electronics before concrete). The obstructionist can take a maximalist approach for the scope and just avoid any attempt to optimize, making the costs appear higher.
- Scope deflection. This is similar to scope creep in that the project gets laden with additional items, but differs from scope creep in that the items are what the obstructionist really wants to build, rather than lazy irrelevances.
- Excessive contingency. Cost estimates are uncertain and the earlier the design is, the more uncertain they are. Adding 40% contingency is a surefire way to ensure the money will be spent, as is citing a large range of costs as in the above-mentioned case in Philadelphia.
How sandbags become real
Normally, the purpose of a sandbag is to block or delay the entire project; the scope deflection point is an exception to this. And yet, once a sandbagged estimate is announced, it often turns into the real cost. Philadelphia was recently planning subway expansion for not much more than the international cost, but now that numbers comparable to Second Avenue Subway are out there, area advocates should expect them to turn into the real cost, absent a strong counterforce, involving public dismissal and humiliation of people engaged in such tactics.
The reason for this is that cost control doesn’t always occur naturally, unless one is already used to it. It’s very easy to waste money on irrelevant extras, some with real value to another group (“betterments”), some without. Second Avenue Subway has stations that are two to three times as big as they needed to be, without any sandbagging – different requirements just piled up, including mechanical rooms, crew rooms with each department having its own space, and additional crossovers, and nobody said “Wait a minute, this is too much.” The station designs are also not standardized, again without a sandbag, and it’s very easy to promise neighborhood groups bespoke design just to make them feel important, even if the bespoke design isn’t architecturally notable or useful for passengers.
Likewise, if there’s any conflict between different users, for example different utilities and infrastructure providers in a city, then it takes some effort to rein it in and coordinate. The same situation occurs for conflict between different users of the same tracks on mainline rail: it takes some effort to coordinate timetables between local and long-distance rail services. The planning effort required is ultimately orders of magnitude cheaper than the cost of segregating the uses – hence the electronics before concrete maxim – but people who don’t care for coordination can find ways to define a project in a way that makes additional concrete (on mainline rail) or extra work with utilities (in urban subways) seem unavoidable.
Moreover, a betterment, non-standardized design, concrete-instead-of-electronics, or scope deflection occurs in context of other people’s money (OPM). If a light rail project pays for a municipality’s streetscaping, the municipality will not try to value-engineer any of it, resulting in unusually high costs.
In New York, one of the reasons for high accessibility costs on the subway, beyond the usual problems of procurement and utility conflict, is scope deflection. The agency doesn’t care about disabled people, and treats disability law as a nuisance. Thus it sandbags elevator installations by bundling them with other projects that it does care about, like adding more staircases or renewing the station finishes, and charging those projects to the accessibility bucket and telling judges how much it is spending on mandated accessibility.
Political advocacy is unwittingly one of the mechanisms for this cost blowout. Transit advocates tend to value transit more than the average person, by definition, and therefore are okay with pushing for projects at higher costs than are acceptable to most. Once a sandbagged budget is out there, such groups often say that even at the higher estimate the project is a bargain and should go ahead. And once there’s political support, it’s easy to spend money with nothing to show for it.
Regarding the “scope deflection” category and the MTA–as I understand your definition, scope deflection is “I’ll add unrelated costs to a project so I can do the unrelated thing I really wanted to do.” But doesn’t this sort of imply that I then become a supporter of (or at least indifferent to) the sandbagged project, since it gives me a chance to extract funding if it goes through?
I think the MTA’s approach to elevators isn’t quite that–I don’t see them using elevators to extort money for renos. Rather, major station renovations (like adding staircases) are what trigger the MTA’s obligations under the ADA to add accessibility features. So the elevator installations always co-occur with the major station rehabs, not because the agency insists it takes a rehab to do an elevator, but because that’s the only time they’re actually forced to install them; the reno was happening anyway.
Of course, they can then use “motivated” accounting to opportunistically classify general rehab costs as elevator-related, to avoid future elevators. But they still fight elevators tooth and nail. At that point, it just feels like type 0 sandbagging, aka “straight-up lying about how much things cost.”
Or would you say this behavior pattern is still consistent with the definitions–that even within scope deflection, the entity might still fight hard against the project?
Scope deflection: yes, it does imply that. AFAIK this phenomenon was in fact the original definition of “scope creep”, and is intimately related to commitment timing.
The ADA screwed up by not mandating all building owners have a 30 year plan to upgrade all non-compliant buildings. It needs to be based on the last remodel (replacing the roof is a minor remodel, but it happens every 30 years and is enough that we can ensure that not everybody just puts in year 30 as the plan to add elevators, then complains they can’t meet the requirement as not enough elevators are made in year 30)
Yes, if you’re a contractor for or a budget-overhead-skimming employee of a “public” agency.
Not so much if you’re a civilian member of the public itself.
The fundamental deal is that this sort of thing is in deed funding extraction, of Other People’s Money.
Sure, the Department of Public Works (or water supply department, of whatever) may need to rebuild the sewer system under some street (or whatever), but when this can be bundled with new tram tracks for a “transportaton” project, the sky becomes the limit. Somebody else is paying! Nobody is in charge! Gold-plating, feather-bedding, riches, lifetime employement!
The supporters of the original tram project may indeed tick off “streetscape improvements” or “new tree plantings” or whatever as some sort of vaguely greenwash-y laundry list of “project benefits”, but don’t and won’t come out and advertise “Hey 38% of your so-called transportation project is going to whatever we can get away with.”
Think about it! There’s no massive public popular front for sewer rebuilding. Bunding gold-plated sewer rebuilding into a tram project’s budget doesn’t mean pushing public support for the tram project over a 50% vote of whaever. It’s all insider deals, and only insiders end up benefiting when only 40% of a tram project can be delivered on a “tram line” project’s budget. The general public isn’t clamouring our there clamouring “More soft costs! More soft costs! More overheads! We demand less for more!”
“Custom design” could just mean a neighbourhood mural or something that isn’t actually super expensive to deliver but does make each station unique.
IIRC the St Louis light rail’s latest extension had a provision where 1% of project costs was used to decorate each station (and the stations really would be very spartan without this decoration). I think that’s a good model, 1% is pretty low, and within that 1% you can give the locals total freedom (within mechanical/safety limits and so on) to decorate their station as they see fit.
as Cuomo left office, the process was restarted and the rapid transit options studied the most seriously are the better ones.
For the umpteenth time. It a rehash of the umpteen plans proposed when JFK’s Airtrain was built. Whatever the Port Authority came up with, will go into the same dusty archive as all the other studies. It’s NIMBY tactic 27. Claim there is need for more study. And then ignore them.
This reminds me of TFL’s writing a report to spike attempts to push them towards automation by the National Government by using Piccadilly line as the example rather than the Jubilee Line (which only has 4 underground station that need remodelling for PED infrastracture rather a dozen plus).
I would be curious about how the concept of sandbagging applies to California High Speed Rail
The overall project was not sandbagged. But specific elements of it were – namely, the Tejon Pass alternative for the Los Angeles-Bakersfield alignment, going directly rather than detouring through Palmdale. I can’t find the original sandbag, but here is Clem Tillier’s rebuttal.
To what Clem says, addressing why the HSR Authority’s arguments against Tejon are bad, I’ll add that the reason the Authority embarked on such bad arguments is early commitment: in 2008 the political commitment was made on the basis of incomplete design and engineering work, and at the time the Palmdale detour via Soledad Canyon looked cheaper; upon further engineering it became clear that Soledad Canyon would require tens of kilometers of additional tunneling to avoid disturbing sensitive ecosystems, but by then the Authority had politically promised service to Palmdale, and LA County had incorporated that into its growth plan, so saying “sorry, no” required ruffling feathers.
Alon, that’s not remotely how this played out.
PBQD (now WSP), then as now 100% in control of the “pubic” CHSRA agency, chose the worst possible alignments, state-wide (Pacheco Pass in northern California, Palmdate in southern California, maximum interference with freeways and existing freight railroads in between) because they were guaranteed to be most costly.
FOr sure this was “early commitment”, but it wasn’t based upon “incomplete design and engineering work” or, “oops we had no idea Digital Elevations Models are A Thing, our bad, still, water under the bridge, stay the course!”. It was based upon maximizing the magnitude of the public-private wealth transfer to PBQD and its allied mafiosi consultants and contractors. The polifical fix was put in after.
“ALTERNATIVES ANALYSIS” is a tool to fix pre-determined (ie cost-maximization) outcomes.
I watched this happen, appalled (hey I was so young and naive back then!) in the SF Bay Area in 1996, when PBQD bought off the regional planning agency’s staff — notably, for his continued malign destructiveness, Steve Heminger, who brough us the $4bn over-budget Bay Bridge East Span, and who still sits on the boards of the San Francisco transportation governing board and on the Caltrain board! — and then paid pitiful amounts of time and lobbying cash to line up an expendable list of cheap cheap cheap bargain-priced local elected officials who put their names to PB-authored resolutions opposing the Dumbarton alignment, which had been the obvious and obviously preferred agency alternative for a decade or more prior.
Until PB showed up bright and early one morning to rewrite public policy in a way that made PB even more obscenely fat, there was zero political or agency push for Pacheco. It all just happened, just like that, and was made “too late to revisit old decisions (not that we’ll actually spend a single cent on construction for decades, but trust us, too late, get over it!)” over just a couple months back in 1996.
Not remotely un-coincidentally, PB went on the spend 30 years slowly building a basket-case BART extension along exactly the once-available rail right-of-way from Dumbarton to San Jose, and only now, after three decades of slowly ingesting billions funnelled their way from MTC for something they could line up funding sooner, have they moved on to decades of slowly slowly slowly ingesting billions to build a HSR to San Jose, along the wrong route, decades too late, for tens of billions too much.
An even stronger case of sandbagging in Philadelphia comes from the Broad Street Line’s other end toward the Navy Yard. SEPTA doesn’t really want it because all capacity is directed towards KOP Rail, so the study gets kicked to PennDOT, subcontracted to HNTB.
On the face of it, it’s a no-brainer with over 13K projected employment and anticipated residential. But then the engineering plans and cost schedules come in: “professional services” scoped at 47% of base construction cost. Insanely deep stations with SAS-style full-length mezzanines at $143M each, thus requiring $62M fan ventilation plants. And most egregiously for the two-station alternatives, the unnecessary inclusion of NFPA 130 cross-passage tunnels. In the NFPA 130 spec, if the distance between stations is less than 2500 feet, then cross-passages aren’t required. Guess what the proposed stop spacing is? 2550 feet. Indeed, the cost schedule provides a very detailed look into just why American costs are so high.
Bear in mind that the sandbagging campaign was so successful that the Navy Yard developers who were originally gung-ho about the subway have now fully backtracked and plan for over 12,000 parking spaces in the updated master plan.
(Rescued from spamfilter.)
Wait. So they’re raising the entire site by 12 feet in order to provide flood resiliency, yet they insist on tunneling the subway as opposed to just building it at the surface (or a few feet underground) and building the street up around it??
They said only building floorplans will have the ground level raised by 12 feet, which is common for development in floodplains. The problem with subsurface tunneling is that the active freight line runs right under Broad Street as an underpass, plus they don’t want to change the configuration of the I-95 highway ramps. But yeah it doesn’t mean they have to go even deeper in the Navy Yard proper, in fact they’re rebuilding the entire Broad Street seawall using cut-and-cover techniques.
“Adding 40% contingency is a surefire way to ensure the money will be spent” is interesting in the context of Flyvbjerg and mandatory optimism bias adjustments in the UK. I suspect this drives a spiral of increasing costs: every overrun causes more padding which becomes the new baseline.
Yeah, sometimes optimizing for good government and optimizing for not being publicly embarrassed are at odds. This is why I prefer reading van Wee and Cantarelli on cost overruns – they have a specific mechanism in mind and really discuss overruns rather than underestimation.
I happen to be in Paris, and I find the city’s approach to ADA accessibility of the subway different:
“RATP notes that buses and trams in Paris are fully accessible, and many RER & Transilien stations are accessible, so there’s no need to spend billions on retrofitting the many old subway stations.”
(It’s not ADA because it’s not America.)
Yes, the part where the Parisian system hates disabled people and brazenly wishes they’d fuck off and die is pretty bad. Berlin, a city with a subway system of similar age to Paris’s, is approaching 100% elevator accessibility, at costs that are per elevator around one third those Paris claims, in a city whose construction costs are if anything slightly higher than in Paris.