We Gave a Talk About Our Construction Costs Report

Here are the slides; they are not in Beamer format but in Google Slides. They’re largely a summary of the New York report with analysis informed by the overview with more direct comparisons with other cities, and for example the recommendation section won’t tell you anything you didn’t know if you’ve read the overview or heard me talk about this issue before.

But I want to highlight one addition: the cost history of New York, on slides 5-8. Costs were elevated even in the 1930s; the references are JRTR for New York, Pascal Désabres for Paris, and Tube History for London. Midcentury New York costs are sourced to New York Magazine, with a Wikipedia article providing some references that match those numbers. The excessive costs of works in the 1930s ensured that the budget would not be sufficient to build desirable lines like Second Avenue Subway, an extension of the Nostrand Avenue Line to Sheepshead Bay, and a line under Utica; those costs kept growing into the 1950s and 60s, and the total amount of money at hand for Second Avenue Subway in the 1950s, about a fifth of the intended budget, would have built the entire line at the then-current costs of Milan or Stockholm. At even semi-reasonable costs, the budget identified for Second Avenue Subway in the late 1990s would have built the entire line, where instead it was cut into four phases with the money only sufficient to build the first.

The overall presentation was a bit stressful for me, especially at the beginning; the talk started at 3 in the afternoon and we finished the slide deck around 2:45. It was better afterward. One caution is that while the talk was recorded, it was a cellphone recording from the back, so Elif and I were not easy to hear. Another is that there were people I was hoping to talk to after the presentation that I didn’t get to; the attendance was on the order of 80 people, and we needed the full two hours we had the room booked for the presentation and Q&A afterward.

A number of people asked us if anything was changing. Eric seems more optimistic that people are listening. I’m less so; we’re talking to some people at government agencies but I can’t tell how important they are (I do not speak Washingtonian and cannot tell from the name and title of someone I talk to where they are on the spectrum of “someone who follows me on social media” to “Pete Buttigieg’s closest confidant”). At the MTA, things are not changing for the better; union head John Samuelsen is under the impression that French employers don’t have to pay pensions, MTA Construction and Development head Jamie Torres-Springer thinks the Second Avenue Subway stations have higher ridership than the stations of Citybanan, MTA head Janno Lieber is in full denial mode, and so on. The excuses might be getting more sophisticated, but, fundamentally, an American manager whose gut reaction to any kind of global benchmarking is to assert with perfect confidence that European employers don’t have to pay benefits needs to be fired and retrained, not given advice on how to come up with more plausibly-sounding excuses. Lieber and Torres-Springer are worth negative billions of dollars to the city and the state while they remain employed.

While some things are improving, the procurement problems are getting worse due to the growing privatization of the state, and, fundamentally, none of those people is willing to admit their mistake. There are some ongoing experiments in New York with itemized costs, but only as part of a PPP privatization, and only as pilots, where the place where itemizing costs and technical scoring are the most helpful is in the biggest and most complex contracts. Government-by-pilot doesn’t work any more than any of the other gimmicks that dimwitted political appointees use to avoid taking responsibility for decisions.


  1. michaelj

    You surely didn’t expect to convert any of those whose position is dependent on the very problematic structure that you document. Change will only come slowly and from the bottom (voters, tax payers) and the very top, the politicians and perhaps some administrators all of whom will have to be from next-gen. In the Anglosphere the current system is so entrenched and self-reinforcing, I despair that change will happen. Even the extreme case of HS2 doesn’t seem to be leading to a fundamental rethink on how the UK does these things. Plenty of complaints about the cost–and demands to close it down–but in all the thousands of words written on it, with the exception of this blog, there is never any mention of how the French build much more ambitious lines for much, much less cost and in much shorter timespans.

    The Brexit mentality dominates (and independent of Brexit, in fact this is what led to Brexit), in that the comparison with those awful continentals isn’t allowed, and thus they only compare themselves with Americans who are worse. I found it interesting that on a recent doco showing the construction of the new EPR nuclear plants at Hinkley Point, the theme was of a great British accomplishment yet almost everyone interviewed or shown on camera wore a cap emblazoned EDF, and spoke with a French accent not a Somerset burr . It will be (or might be) a good British accomplishment but is it really so difficult to call it a great Franco-British achievement? Alas, just as the Brits invented the railways (and built half the railways round the world) and also built the first nuclear generator to deliver power to the grid (Calder Hall), they don’t do either anymore. Funny enough, neither does the US! And the only two nations to refuse to use metric measures!

    As you’ve said elsewhere, the US has never really had strong independent government expertise. This negatively impacts not just public transit but also private: witness the debacle of the Boeing 737-Max in which the FAA effectively outsourced certification to the company itself! In the UK the loss of it began with Thatcher in 1979 and in Australia in 1996 with John Howard. Subverting the public service as a non-partisan repository of expertise and advice and in fact of project management. Heads of departments became political appointees expected to execute what they are told to, and to outsource most expert input as required. Of course in a properly functioning democracy one expects the public service to be responsive to the elected government but it has been taken to extremes leading to incompetence and total reliance upon outsourcing. Indeed Thatcher deliberately starved British Rail of funds and closed down their high-speed rail research project (tilt-train, IP sold off to the Italians).

    I hope your report gets widespread notice but the people who need to listen and learn aren’t interested. I don’t know how to change that. It’s hard to get the great unwashed masses interested. Hmm, maybe get the BBC involved in making a doco series on the subject. With HS2 (and HS1 one of the worst PFI/PPP failures), London Crossrail and Hinkley EPRs (projected to be £24bn, most expensive in world history) there is no shortage of material. I can see Rob Bell or maybe Dan Snow or even Alice Roberts presenting … (Bell is an actual engineer and obtained part of his education in France).

    • Matthew Hutton

      HS1 has additional complexities around the London terminal that needed rebuilding, tunnelling out of the city where in France for example you could use the existing urban railway lines. Additionally out of the city the line follows the edge of an area of natural beauty and as it needed to serve Ashford International in the middle that constrains the route a lot.

      While I’m sure HS1 could have been a bit cheaper – due to those complexities its cost was always going to be on the high side compared to other countries. That said HS2 has significantly fewer of those complexities so really should have been at worst the same cost as HS1 – if not substantially cheaper.

      Additionally as in other countries the UK Conservative Party has lost its best thinkers so I think to see if the UK starts to reduce its infrastructure costs you need a change of government.

      • michaelj

        HS1 involved almost as much tunnelling as the Channel tunnel! So, no surprise it was expensive. However I was referring to the process of trying to get it done via a PFI, Thatcher’s neoliberal substitute for government. And how it was an utter unmitigated disaster so that it required government to step in to save it. Though of course the developers still made their fortunes from the property improvement adjoining the line, especially St Pancras and Stratford. Instead there should have been a Hong Kong-style Land Value Capture in place but that seriously is never going to happen in the Anglosphere where developers rule (the only reason it worked in HK is because of harsh reality and need to fund the HK Metro construction other than by direct taxation).

        The point about there being ‘free’ lines into the major stations in Paris is true. Nicholas Faith writes (in The Right Line, his history of HS1):

        Costs in France are also drastically reduced by the way that their LGVs can join normal track some miles from their Parisian terminals, thus eliminating the need for–inevitably and contentious–lines leading to their Paris termini, available thanks to the lack of any serious commuter traffic into Paris on the historic rail network–a mere nothing compared to the hordes who descend on London’s termini every day.

        The real question is, why does Paris avoid those hordes? After all the city is actually bigger and the Metro + RER carries far more commuters than LU. Perhaps it’s because Paris planned much better for these issues, and the RER was a big part of the solution, with lines A and B opening in 1977. London Crossrail not until 2022. It is also helped by Paris being a much more compact city (even in the Petite Couronne). If one counted the commuter lines into London termini I am confident it is a lot more than Paris but they dead-end and so are inefficient on the use of that track and of course in getting commuters to their destinations. There are at least 15 mainline stations in central London on the north side of the Thames and this mess was 50 years overdue for a serious reorganisation. They had proto-Crossrail/RER plans in the 1940s, so you know, only a 70 year procrastination.
        So, the unavailability of track for HS1 (or HS2) may be true but the interpretation is faulty. As usual it was the absence of long-term planning in London, and the unwillingness to spend money until absolutely forced to, by which time the situation was far worse and thus even more expensive to fix.

        • Alon Levy

          the lack of any serious commuter traffic into Paris on the historic rail network

          What? Gare du Nord has very heavy Transilien traffic, in addition to the RER. Is this one of these takes akin to how former MTA head Pat Foye said that London didn’t have as much commuter rail traffic as New York? (Foye didn’t know London had any commuter rail except the Overground.)

          What’s true is that Gare du Nord has more approach tracks than the London terminals – 12, vs. six at Euston (note: Euston does have RER-style operations on the Watford DC Line). Gare de Lyon has six, but less heavy traffic – though the RER D was only connected to it in 1995. So London does need to make modifications to the Paris system to work within the footprint of Euston; the anger I see from the more incurious Brits is that they need to think about how to adapt the limit values of track intensity from Barcelona or Tokyo to London’s case – this isn’t plug-and-play.

          I bring up this more abstract issue of doing modifications because this is what every large city needs when it learns how to build more cheaply. And that’s what politically appointed potted plants refuse to do.

          • Matthew Hutton

            I think to be honest that London has higher costs due to poor planning (or efficient operations) historically is what it is.

            However even if costs are higher in London that we’d like they should be a lot more reasonable in the other cities in the UK.

            For example Birmingham, Manchester or Leeds should be able to build a metro system for Milan costs. Additionally they should also be able to use cut and cover and other cheaper techniques without excessive traffic congestion.

            And while you’d probably want to grade separate some of the junctions there probably is some capacity on the lines into Birmingham, Manchester and Leeds to support HS2 services, and in those cities if tunnelling was required for that that could also be cut and cover.

          • michaelj

            A very unbalanced comparison. Of course Gare du Nord has plenty of Transilien traffic but do you think it (or combined with St Lazare + Est) has more than combined Paddington, Marylebone, Euston, St Pancras, Kings Cross, Farringdon, Liverpool Street (and that’s only half the stations)? (One would have to separate Transilien from long-distant and international traffic.)

            Again, another significant reason why there are fewer transilien commuters than the equivalent in London is that far more Francilienes live much closer in, ie. the Petite Couronne, a lot of which would be considered ‘inner’ London. A lot of these can access the Metro system (and of course RER). Or use the circumferential system, eg. all those using tram T2 from the stockbroker belt (Meudon, St Cloud, Suresnes, Puteaux) to La Defense.

        • Matthew Hutton

          Strictly Crossrail 0 is Thameslink which opened in 1988.

          And the metropolitan line which opened in the 19th century is effectively the same as RER E at the moment.

          • michaelj

            the metropolitan line which opened in the 19th century is effectively the same as RER E at the moment

            That’s kinda true. Both terminate in the city. And the Met is the fastest LU line with some long express segments. But you had to add “at the moment” because you know huge changes are about to happen to RER-E–and this is the last RER line to get this treatment, ie. to make it a true thru-line via the 8km tunnel from St Lazare to La Defense (to open next year). The western extension takes over Transilien lines (and part of RER-A) which shows why the commuter traffic at the mainline stations (principally St Lazare, also Nord/Est) doesn’t get unmanageable. It will bring relief to many parts of the rail network include Chatelet and Metro and other RER lines.

            Incidentally the current Metropolitan line shares almost no physical structure with the original 1863 one. On one of his docos Rob Bell accessed a ghost station of the original that remains below (I think) Oxford Circus. It’s north-western suburban traffic happened in the 1930s.

          • michaelj

            Strictly Crossrail 0 is Thameslink which opened in 1988.

            Yes, but isn’t it a perfect tale of British procrastination? First, they re-opened a tunnel that should have never closed:

            On 14 June 1941, railway manager George Dow proposed in an article in the London evening newspaper The Star that new routes be built in tunnels from Marylebone south to Victoria, and from King’s Cross south to Charing Cross. Both were to connect with a Paddington–Liverpool Street tunnel that he proposed, anticipating Crossrail by 40 years. He also proposed a north-east to south-west such link (Liverpool Street to Charing Cross), all giving seamless, key, main-line connections.

            So, as I keep saying, there has been no lack of vision by individuals. What has been lacking is institutional support. Thameslink was typical in being half-arsed, with peak-hour overcrowding, old small trains, routes cobbled together from bits and pieces. Clearly the demand was there but they really only began upgrading it (to anything remotely like RER) in the second decade of the 21st century. Instead of 1988, or 1977, or 1941 or the intervening decades.

        • Seb

          TGV from Montparnasse take a tunnel to Massy and the ones from Gate de Lyon have also a short tunnel.

          Also interesting the LGV to Normandy basically waits for the RER E to be done to free tracks at Saint Lazare.

          I think the same was true at gare de l’est.

          • Matthew Hutton

            I’m sure this is true.

            But by British standards I’m sure the French have lots of spare capacity.

            And unlike the Japanese trains you can’t set your watch against British trains.

  2. wiesmann

    You gave your talk in New York. By your own model, this is the center of gravity of Anglosphere. Cultural constructs usually don’t change from the center, which by definition is at the top of the pecking order. In my opinion, there are more chances of change at the edges, which are in contact with others, Ireland, Scotland, maybe the part of the US in contact with Mexico…

    • Alon Levy

      Not quite:

      1. No part of the US is meaningfully in contact with the Hispanosphere; areas near the Mexican border see that Mexico is much poorer than the US (and Mexican infrastructure isn’t especially good) and are affirmed in their belief in American superiority.

      2. The UK seems the most ready to get rid of the globalized system. Part of it is that it’s had it for the longest, part of it is that the system failed to insinuate itself into the canon of what is apolitically true (Blair tried but was discredited by Iraq, and henceforth Labour has been experimenting with figuring out which parts of Blairism work and which don’t), part of it is that to the extent the UK cringes it’s toward a pan-Western European medley, part of it is the failure of Brexit.

    • Paul

      Alon is right. From working in Texas, I know many engineers who are bilingual and have lived in Mexico or have close family ties. But they were all educated in the US and do things the American way. There’s really no regular contact between engineers in Mexico and the US. Part of this is licensure; it’s much easier to get a PE license if your bachelor’s degree is from an American university and would be pretty difficult to practice in both countries. But also, the infrastructure in border towns is not great and the places in Mexico to learn from would be richer inland cities like Mexico City, Guadalajara, Monterrey, etc.

  3. Basil Marte

    fundamentally, none of those people is willing to admit their mistake.

    It is vanishingly unlikely that they will say “I was wrong”. However, there is a hypothesis that when common opinion shifts, they will seamlessly adopt it and say “see, I was right all along, I had been an advocate of the new consensus long before it was popular”. As in, “we had always been at war with Eurasia”.

    • Alon Levy

      You’d think, but all of these people are wedded to design-build and state privatization.

      More broadly, even though these are political actors with very little dignity, why would I want them working for the state? They’re not going to point out real errors in the program. They don’t have the technical chops for it, and their entire personality is about kissing ass. If there’s a cool technique that makes things work more smoothly, they’re not going to know it; the sort of people who pronounce with perfect confidence that French employers don’t have to pay pensions are not going to know it or care to learn.

      • wiesmann

        Don’t you think there is something weird about the media not pointing this out? Politicians say stupid stuff all the time, but I somehow feel that if a french syndicalist said something as stupid, say about an African country, he would be called out, maybe I am overly naïve…

  4. michaelj

    This (below) just arrived in the PS Sunday Newsletter:

    Consultants and the Crisis of Capitalism
    Mariana Mazzucato and Rosie Collington show how the industry’s global growth is harming economies and weakening governments.

    I’ve noticed Mazzucato has been getting more mainstream-media attention recently. She’s been saying this stuff for a decade; in a few months it is the tenth anniversary of her “The Entrepreneurial State: Debunking Public vs. Private Sector Myths”. Our Labor-party Treasurer even mentioned her in a vision piece he wrote last week. That doesn’t mean he’ll act on it. But maybe over the next decade ….

  5. Sean Cunneen

    One thing that I wonder about is why New York had reasonable costs for the First Subway and the Dual Contracts, but then a cost explosion in the construction of the IND. A lot of your explanations deal with privatization or shrinkage of the state raising cost, but the IND was less privatized than the older systems, and in general the American state grew during the New Deal Era. Was there greater cost-increasing political meddling in the IND, which seems to have been designed as Mayor Hylan’s revenge plot against the company that fired him? Did the IRT and BMT have private sector construction expertise that the state lacked? Did the large amount of public money available due to Great Depression-era economic stimulus cause the government to forgo cost control?

  6. Sid

    What did 1930’s London and Paris do to get $40m/km costs that today’s “low cost” countries like Spain aren’t, which are around $100m/km?

    • Alon Levy

      I don’t know. There has been a secular increase in costs; 1960s London was building the Victoria line at $120 million/km.

      • Matthew Hutton

        The Victoria line was a lot more expensive than that as afterwards they had to extend King’s Cross and Victoria stations at vast expense to handle all the passengers.

        That’s one of the reasons the Jubilee line extension was so expensive – they built it for the 200 million annual passengers it gets from the outset.

        • Eric2

          Does that really explain it? The cost of tunnels should be independent of ridership, and the cost of stations at most linear with ridership.

          • Matthew Hutton

            I think the difficultly with stations is that they start off fixed and then become more complex.

            Aside from the extensive car parking the differences between Oxford Parkway which gets a million passengers a year and Islip which gets 35,000 are minimal.

            But I imagine when you’ve got 10-15 million passengers a year or even more then you have to model where all the passengers go to get out of the station rather than just being able to assume it’ll be fine. And you might need new roads and bus routes to handle the traffic as well – and perhaps further rapid transit.

      • Astro

        If you ever get the access to useful documents from that era, it would make an interesting paper showing the degradation of cost performance in London and tying it to as many specific events as possible.

    • Matthew Hutton

      Probably the reason stuff was cheaper in the 1930s is down to a lack of health and safety and lower wages.

  7. Gideon Weissman

    Attended this event and thought you guys did a great job. I work (as a graduate aide) for the MTA’s electric bus transition team and have been sharing some of your research on this – we’re not subways, but a lot of the same issues you highlight are relevant.

    • Alon Levy

      Oh, for battery-electrics? Yeah, that’s a separate can of worms, for which New York is pretty unique in having a decent case for their adoption.

        • Alon Levy

          1. Heavy traffic jams are exactly where battery-electrics shine.
          2. High ridership per km means it’s cost-effective to build charging stations at line ends.
          3. High population density near bus garages means that local point source pollution is a serious problem.

          • Sean Cunneen

            Interesting… is this in comparison with diesel busses or with trolleybusses? I’d think high ridership per km would mean higher frequencies, favoring trolleybusses as the vehicles are cheaper and the fixed infrastructure cost is spread over more riders. The use case where I’d think battery busses would beat trolley busses are in the NJ Transit busses to the Port Authority Bus Terminal where trolleybusses might not be able to run at highway speeds while connected to wires and the high peak to base ratios means that you might not need any extra busses to handle charging, as you might arrange the schedule so that all busses are on the road in the peak two hours.

    • michaelj

      Whoever writes that blog rather typifies the problem. They clearly are a small-government zealot (“excessive and arbitrary regulation”) and is barely restraining themselves from the notion that if only government would get out of the way …
      Further, they do exactly what Alon points out: ignores the rest of the world, and that the best examples use few outside consultants and their projects are strongly managed by in-house experts. I think it shows how difficult it is to change people’s minds on such things. This person has simply and simplistically used the Marron report to confirm their own biases, despite all the evidence presented.

      • Alon Levy

        Yeah, the link to the Marginal Revolution comparison with China is especially grating. Not only are there actual democracies with low construction costs – lower than China’s – but also every single low-cost country is democratic, counting Turkey, which if polls hold is two months from kicking out AKP (even if Kılıçdaroğlu is not the best candidate for the job). American and British elites, especially on the right, just enjoy pretending Continental Europe and rich Asian nation-states aren’t democratic or free.

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