Category: Construction Costs
Monorail Construction Costs
Supporters of monorail and other sleek structures argue that because the structures are thinner than conventional rail viaducts, they’re cheaper and more aesthetic. They even argue that viaducts, which are more expensive than at-grade construction, are actually better. Transrapid does that, and Hyperloop does that as well. Hyperloop proponents specifically mention the the structure’s lighter weight as an explanation for the lower proposed cost – see my post update and the comments for extensive discussion and explanation for why the proposed Hyperloop costs are still an order of magnitude too low to be realistic.
Not having reliable construction costs for the intercity modes, I went and looked for construction costs of urban monorails, which are usually put above-ground, where their sleekness is a major advantage over conventional rail since they do not darken the street as much.
The resource with the most information is a JRTR article about Japanese intermediate-capacity rail, including both monorail and significantly less sleek automated guideway transit (AGT). It includes a diagram of monorail structures, which can be seen to be quite light and thin. The width of the structure from guideway to guideway is 4.5 meters including both guideway widths, and including the outside appears to raise it to 5.5. Two-track elevated conventional rail structures typically range from 7 to 10.5 meters wide.
The most recent Japanese monorail on the list, the Tama Monorail in suburban Tokyo, opened 1998, was $2.422 billion for 16 km: $151 million per km.
The one Japanese project more recent than the JRTR article, the Okinawa Monorail, built from 1996 to 2003, was $1.1 billion for 13 km: $85 million per km. The cost cited on the Monorail Society’s webpage is less than a third that amount. An extension to begin construction soon is projected at $350 million for 4 km, about the same cost per km.
Other Tokyo projects are not cheaper than the Tama Monorail. The AGT Yurikamome, opened 1995, cost $140 million per km as per JRTR; the Tohoku Jukan Line, a conventional elevated structure on top of an older elevated structure located in Central Tokyo, is $400 million for 1.3 km of new el and 2.5 additional km of new track on existing structure, which is $300 million per km if one considers the cost of everything except the new el to be zero, and about $150 million per km if the 2.5 km of existing structure is deemed to cost as much as at-grade rail, which is about half as much as an el typically. The ratio of elevated to underground cost is 2-3 and this is also in line with $150 million per km of baseline cost.
Outside Japan, we have the following projects, with their costs:
Chongqing Rail Transit Line 3: the first phase, built from 2007 to 2011, is ¥13.8 billion for 39 km, or in PPP dollars $88 million per km. About a third of the line is underground. An extension opened in 2013 cost ¥5.7 billion for 16.5 km (Chin.), or $85 million per km, all elevated. This is in a country where fully underground subways average about $150 million per km; but I cannot find cost figures for other lines in Chongqing itself, and any help would be appreciated.
Moscow Monorail: according to Wikipedia, 6.33 billion rubles in 2001-4, or $514 million in 2010 PPP dollars, for 4.7 km. This is $109 million per km, all elevated.
AirTrain Newark: the airport-internal people mover opened in 1996 and cost $354 million for 3 km, while the extension to the mainline train station was built from 1997 to 2000, added another 1.8 km to the project, and cost $415 million; both numbers are taken from the New York Times. Deflating both numbers to 1998, this is $1.03 billion for 4.8 km, or $215 million per km. In contrast, AirTrain JFK, a SkyTrain-like system, was $1.9 billion for 13 km and was built from 1998 to 2002, which in 2010 dollars is $185 million per km, actually lower than the cost of the monorail. Note that the AirTrain construction cost was not that high by normal-world standards: the same technology in Vancouver, in all-elevated configuration, is projected at C$116-150 million per km into Surrey when all elevated (see RRT alternatives 1 and 3 with distances of 15.5 km for 1 and 6 km for 3 as measured on a map), which is about US$95-120 million after PPP conversion. This is a 50-100% premium for New York over Vancouver prices, compared with a 400-600% premium for subway construction.
Palm Jumeirah Monorail, Dubai: Dh4.1 billion for 5.45 km, built 2006-8, about $1 billion in 2010 PPP dollars. This is $183 million per km, all elevated. Compare with the 17% underground Dubai Metro, mentioned in my previous post, which costs half as much per km.
Mumbai Monorail: the master plan is to spend 20,000 crore on 135 km, which after PPP conversion is $66 million per km. The under-construction first line is 3,000 crore for 19.54 km, or $69 million per km, all elevated. This compares with a parallel Mumbai Metro plan to build 146 km for 36,000 crore, or $111 million per km, of which according to Wikipedia 32 km, or 22%, is to be underground. This by itself suggests no monorail cost saving. But the first Mumbai Metro line is already over budget, at 3,800 crore, which again using Wikipedia for length (11.07 km) gives $154 million per km, all elevated. This suggests that in Mumbai there is a cost saving from using monorail, assuming all numbers are correct and that the Monorail Line 1 cost is not just the first phase, which is only 8 km.
Quick Note: Why Quinn is Unfit to be Mayor
The Triboro RX plan calls for using preexisting freight rail rights-of-way with minimal freight traffic to build a circumferential subway line through the Bronx, Queens, and Brooklyn. It was mentioned as a possible project by then-MTA head Lee Sander and more recently by Scott Stringer and on The Atlantic Cities by Eric Jaffe. Despite not having nearly as much ridership potential as Second Avenue Subway or a future Utica subway, the presumed low cost of reactivating the right-of-way makes it a promising project.
According to Capital New York, leading mayoral contender Christine Quinn has just made up a price tag of $25 billion for Triboro, while claiming that paving portions of the right-of-way for buses will cost only $25 million. This is on the heels of city council member Brad Lander’s proposal for more investment in bus service. The difference is that Lander proposed using buses for what buses do well, that is service along city streets, and his plan includes bus lanes on major street and what appears to be systemwide off-board fare collection. In contrast, Quinn is just channeling the “buses are always cheaper than rail” mantra and proposing to expand bus service at the expense of a future subway line.
There is no support offered for either of the two cost figures Quinn is using, and plenty of contradictory evidence. Paving over rail lines for bus service is expensive; a recent example from Hartford and a proposal from Staten Island both point to about $40 million per km in the US. The map in the Capital New York article suggests significant detours away from the right-of-way, including on-street turns making the bus as slow as the existing circumferential B35 route, but also several kilometers on the railroad in Queens. Conversely, reusing rail lines for rail service is not nearly as expensive as building a subway. The MTA’s own biased study says a combined on-street and existing-right-of-way North Shore service would cost 65% more if it were light rail than if it were a busway; since the Triboro right-of-way is intact, the cost of service is in the light rail range, rather than the $25 billion for 35 km Quinn says.
But the reason Quinn is unfit for office rather than just wrong is the trust factor coming from this. She isn’t just sandbagging a project she thinks is too hard; the MTA is doing that on its own already. She appears to be brazenly making up outlandish numbers in support of a mantra about bus and rail construction costs. Nor has anyone else proposed a Triboro busway – she made the logical leap herself, despite not having any background in transit advocacy. Politicians who want to succeed need to know which advocates’ ideas to channel, and Quinn is failing at that on the transit front. If I can’t trust anything she says about transit, how can I trust anything she says about the effectiveness of stop-and-frisk, or about housing affordability, or about the consequences of labor regulations?
Update: Stephen Smith asked Quinn’s spokesperson, who cited a $21 billion figure for a far larger RPA plan including Second Avenue Subway and commuter rail through-running with new lines through Manhattan. I am not holding my breath for a retraction of the bus paving plan from the Quinn campaign.
Update 2: Quinn admitted the mistake on the rail plan, and revised the estimate of the cost down to $1 billion, but sticks to the bus plan and its $25 million estimate.
Comparative Subway Construction Costs, Revised
Here is a list of subway projects in the last 15-20 years, in both developed and developing countries. It’s in addition to my initial lists for developed and developing countries, but includes projects mentioned in past blog posts not on those two lists. This is still not an exhaustive list, due to some cities for which I couldn’t find any information (Moscow), cities for which the information from different sources contradicts itself (Bucharest), and cities for which I couldn’t source numbers beyond Wikipedia (Osaka). My rule is that Wikipedia is an acceptable source for construction timelines and route length but not cost.
While the list is meant to be for urban subways, urban rail projects that are predominantly elevated are also included. As far as possible I have tried using PPP dollars adjusted for inflation to give 2010 dollars (2010 and not 2013, because when I started comparing costs that’s what I used). For core developed countries, because inflation rates are similar, I use American inflation rates, using the CPI (not GDP deflator: the two measures have disagreed for a while, and the CPI points to higher inflation). For other ones, I’ve tried focusing on more recent projects, including even some that are under construction, but I use actual inflation rates.
Bear in mind the data is only as accurate as my sources for it and my PPP conversions. Errors of 10-20% in each direction are to be expected: sources disagree on conversion rates, sometimes the years of construction are not made clear so deflating to the midpoint is not reliable, etc. Even larger errors sometimes crop up, for example if old cost figures are not updated after a cost overrun.
Explicitly, the rates I use today are C$1.25 = S$1 = US$1 = 3.8 yuan = 100 yen = 800 won; £1 = $1.50; €1 = $1.25; CHF1 = $1.65.
Singapore Thomson MRT Line: not yet under construction, expected to open 2019-21, S$18 billion for 30 km. This is $600 million/km, all underground. Included only as a lower bound of costs; costs can rise beyond budget but rarely come significantly under it.
Hong Kong Sha Tin to Central Link: a 1-km segment underground (not underwater) is £270 million, under construction with opening expected in 2018. After converting to PPP using Hong Kong’s conversion rate this is $586 million/km.
Singapore Downtown MRT Line: under construction since around 2008, to be completed in 2017; S$20.7 billion for 42 km: $493 million/km. This line is fully underground. This represents a 70% cost overrun already, announced after I previously reported the original budget of S$12 billion.
Budapest Metro Line 4: under construction since 2006, completion expected in 2014, 400 billion forint for 7.4 km. This is $358 million per km. The line is fully underground.
Fukuoka, Nanakuma Line extension to Hakata: construction expected to begin 2014 with line opening expected in 2020, ¥45 billion for 1.4 km: $321 million/km. I do not know for certain that the extension is fully underground, but this is likely, as the preexisting line is underground and the extension follows busy CBD streets.
Cairo Metro Line 3, Phase 1: opened 2012 with construction since 2006, LE4.2 billion for 4.3 km. This is $310 million/km. The phase is fully underground.
Kawasaki Subway: under construction, opening expected in 2018, ¥433.6 billion for 16.7 km: $260 million/km. The line is fully underground. Update: people in comments explain that the line was actually canceled; the link in this paragraph is just a plan.
Stockholm City Line: to open in 2017, 16.8 billion kronor (2007 prices) for 6 km of tunnel and 1.4 km of bridge: $259 million/km.
Sao Paulo Metro Line 6: construction due to begin in 2014; 7.8 billion reais for 15.9 km: $250 million/km. The line is 84% underground.
Sao Paulo Metro Line 4: construction began in 2004, first phase opened in 2010, completion expected in 2014; 5.6 billion reais for 12.8 km: $223 million/km. The line is fully underground.
Dnipropetrovsk Metro extension: under construction since about 2008, opening expected in 2015, €367 million for 4 km. After PPP conversion this is $214 million/km. It appears to be fully underground.
Malmö City Tunnel: built 2005-10, 9 billion kronor for 4.65 km: $212 million/km. This is a fully underground project.
Bangalore Metro Phase 2: to be opened by 2017, 264 billion rupees for 72.1 km. This is $164 million/km. I do not know what proportion of the project is underground; it does not seem to be large, as the extension of the phase 1 lines are all outbound, and only line 4 seems to have significant tunneling, about 14 km by pure Wikipedia eyeballing.
San Juan Tren Urbano: built 1996-2004, $2.28 billion (2001 figures, see PDF-p. 145) for 17.2 km: $163 million/km. The line is only 7.5% underground by direct inspection on Google Earth.
Lucern Zentralbahn: built 2008-13, CHF250 million for 1.32 km of tunnel: $151 million/km.
Hangzhou: I can’t find any ex post numbers, but in both 2005 and this year (Chinese) officials pegged the cost of future construction as ¥550 million/km: $145 million/km.
Sofia Metro Line 2: built 2008-12, €952 million for 17 km. After PPP conversion, this is $148 million/km. The line appears to be almost fully underground: the numbers here do not fully add up but point to 1.3-2.9 km above ground (7.6-13% of total line length) in one segment while Wikipedia’s line map shows only that segment with above-ground segments.
Thessaloniki: I can’t find any ex post numbers, but in 2005 the budget for the first phase, under construction to be opened in 2016, was €798 million for 9.6 km: $104 million/km. The second phase received bids last year and is expected to open in 2017, with an estimated cost of €518 million for 4.78 km: $135 million/km. Both phases are fully underground.
Vancouver Evergreen Line: under construction since 2012, completion expected 2016; C$1.4 billion for 11 km: $103 million/km. Only 2 km of the system, 18%, is underground, but Vancouver seems to have an unusually low underground construction cost premium.
Dubai Metro (lines 1 and 2): built 2005-11, Dh28 billion ($6.9 billion in PPP2010US$) for 75 km: $92 million/km. Only 13 km of the system, 17%, is underground.
Mexico City Metro Line 12: built 2007-2012, $1.8 billion for 26.4 km. After PPP conversion, this is $90 million/km. From a Google Earth overlay map, this line is 49% underground.
Seoul Sin-Bundang Line: built 2005-11, 1,169 billion won for about 18 km (sources disagree on whether it’s 17.3 or 18.5): $87 million/km. The line is 100% underground according to YouTube videos.
Bangalore Metro, Phase 1: built 2006-11, 8,158 crore rupees for 42.3 km: $93 million/km. Only 8.82 km, or 21% of the project, is underground. See above for Indian construction costs in a heavier-tunneling setting.
Helsinki Westmetro: under construction since 2009 with completion expected in 2015, €714 million for 13.5 kilometers: $66 million/km. The line is fully underground.
Seoul Subway Line 9: opened 2009, 900 billion won for 27 km: $43 million/km. The line is almost fully underground by direct inspection on Google Maps.
Barcelona Sants-La Sagrera tunnel: built 2008-11, €179.3 million for 5.8 km: $39 million/km. This project is intercity but fully underground.
Just from eyeballing the data, spliced together with the two older lists, the biggest correlation of each country’s construction costs is with the construction costs of other lines in the same country. When there is more than one project listed separately in a city – e.g. Seoul, Singapore, Sao Paulo – the projects have similar costs. This persists across different cities in the same country, judging by the similarity between Bangalore Metro’s Phase 2 cost and the Delhi Metro’s cost from a previous list and by the similarity between Hangzhou and Beijing’s costs.
Construction Costs and Perceptions
While looking for South Korean cost data for a major update of my construction costs posts, I stumbled upon a newspaper article excoriating Seoul’s extravagant construction, comparing it unfavorably with the US. Per Joong-Ang, the US neglect of infrastructure is a form of frugality that South Korea should imitate; the National Mall’s poorly maintained, weedy lawns are treated as something to admire. Moreover, Seoul subway construction is more extravagant than in the Washington Metro:
I got on a train at the Smithsonian Metro station. All the stations there have the same architectural styles. They are the 1976 creation of American architect Harry Weese. High ceilings and open spaces are their trademarks. They are known for their practicality. But they are very modest compared to the subway stations of Seoul. The platforms are dimly lighted. It’s hard to read a book there. The walls are concrete, with none of Korea’s flashing signboards. The architecture is very quiet.
After I returned to Seoul, I got on the subway at Guryong Station in Gangnam District, southern Seoul. Marble proliferates at the entrance. A public table is covered with glass. Every day, about 3,600 people use the station, which cost 55 billion won ($51.2 million) to build.
Of course, in reality, Korean construction costs are a fraction of American ones. Guryong Station is an infill subway station in a dense urban neighborhood, opening about a year after the rest of the Bundang Line; it cost about $75 million in 2010 PPP dollars. The US sometimes builds at-grade infill commuter stations for more than that, and those do not have marble entrances or glass tables (update: New York Avenue in Washington is another example of more expensive US infill, this time an elevated station). Building just the shell of an infill subway station on the 7 extension simultaneously with the rest of the extension was estimated at $500 million. Similarly, the Sin-Bundang Line, a driverless rapid transit line, cost 1,169 billion won, about $1.4 billion, for about 18 km; the line is described as “largely underground,” fully underground, and its city terminus is under a dense secondary CBD. In contrast, in Washington, the suburban Silver Line, with very little tunneling, is $6.8 billion (in 2009-2018 dollars) for 37 km. $183 million per km versus about $80.
There are two takeaway lessons from this. The first is that to gauge whether something is cheap or extravagant we need to know the normal range of costs and compare, rather than looking at the quality of construction. Seoul may build very extravagant-looking stations, but it builds them cheaply for some reason.
The second, more important lesson is that people perceive costs the way they perceive local corruption. The US is indeed the world’s most expensive country to build transit in, which Americans can easily believe since they do not trust their government very much. At the opposite corner, Switzerland is quite cheap: a rejected mountain tunneling project in Neuchatel was CHF 850 million for 17 km, and a recently completed urban tunnel in Lucern was CHF 250 million for 1.32 km; accounting for the Swiss franc’s 87% overvaluation relative to PPP, these are $28 and $121 million per km respectively. And as far as I hear from Swiss commenters, the Swiss are proud of the success of their public transportation system. Indeed, Swiss levels of trust in government and institutions are very high.
In contrast, in cheap countries where people do not trust the government, people do not readily accept that construction costs are low. When I talk to Spaniards who are not railfans, they talk about corrupt and extravagant infrastructure projects, and do not believe that both high-speed rail and subway construction costs in Spain are so low. (It doesn’t help that Barcelona’s L9/10, despite still being about average-cost, went over budget by a factor of over 3.) This is no different from the Joong-Ang attitude toward Korean costs: the government self-evidently doesn’t work, and so a $75 million infill subway station is self-evidently a boondoggle.
The situation in the opposite corner – high trust/low perceptions of corruption, high costs – exists as well, in Singapore. The sixth MRT line, soon to begin construction, is S$18 billion for 30 km; the PPP exchange rate between Singapore and US dollars is about 1:1. The line is automated and fully underground, but about half of it is under very wide arterial roads and portions of it are in undeveloped rather than built-up land; it shouldn’t cost this much. The fifth line, currently under construction, is cheaper, S$12 billion for 40-42 km, but still much more expensive than the non-Anglophone average.
And yet, although Singapore’s not far behind Japan in its construction costs, I doubt Singaporeans are as willing to consider their construction practices expensive as Americans, Britons, and Japanese are. I know for a fact that international commentators who hold Singapore in high regard for its efficient government would not be willing to think of it as an expensive-construction country.
All this makes good transit activism somewhat frustrating, in that people will not usually recognize efficient government in absolute numbers. Percentages, certainly – people understand cost overruns and (much less common) cost underruns, and as we’ve seen in Canada people can compare different technologies. But absolute numbers are not as well-understood, and neither are international comparisons of the same technology, where cost differences revolve around questions of project management, contracting practices, labor rules, and details of geology and surrounding infrastructure; people have only recently begun to think in terms of per-km costs in New York, and in the rest of the US I have not seen such thinking. When a transit agency proposes a project, people automatically think it’s expensive, and some will also say it’s necessary, regardless of whether it actually is either. I don’t think reactions to Second Avenue Subway at $5 billion would be materially different from what they were when Phase 1 alone grew to $5 billion.
The upside is that in budget negotiations, the amounts given to transportation are based on absolute shares of the budget rather than on the needs of specific megaprojects, which means that lower costs would translate to more projects built for the same budget. People might not notice that costs have gone down, and might still complain that every subway line is a boondoggle, but more lines would be built and more people would ride those lines. Just the perception of government competence would not change.
Relative Costs of Transit Construction
The relative costs of different technologies of transit are not fixed. Although there are some rules of thumb for the ratio of tunneling cost to above-ground transit cost, the actual ratio depends on the city and project, and this would favor the mode that’s relatively cheaper. Likewise, the ratio of operating to capital costs is not always fixed, and of course long-term real interest rates vary between countries, and this could again favor some modes: more expensive construction and cheaper operations favor buses, the opposite situations favor rail.
In general, els cost 2-2.5 times as much as at-grade light rail, subways 4-6 times as much, according to Table 6 in this Flyvbjerg paper; Table 5, sourced to a different previous paper, estimates per-km costs, and has ratios of 1.8 and 4.5 respectively.
However, specifically in Vancouver, the premiums of elevated and underground construction appear much lower. The cost estimates for rail transit to UBC are $2.9 billion for an almost entirely underground extension of SkyTrain and $1.1 billion for at-grade light rail along Broadway, both about 12 km. Elevated construction is in the middle, though closer to the light rail end: the estimates for the two all-elevated SkyTrain extension alternatives into Surrey are $900 million for 6 km for rapid transit alternative 3 and $1.95 billion for 15.5 km for alternative 1. The under-construction Evergreen Line, which is 11 km long of which about 2 are in tunnel, is $1.4 billion.
In the rest of Canada, this seems to be true as well, though the evidence is more equivocal since the projects that are considered above-ground are often elevated rather than at-grade. The Canadian above-ground projects that Rob Ford’s Eglinton subway is compared with are not wholly above ground. Calgary’s West LRT, which with the latest cost overrun is $1.4 billion (a multiple of the preexisting three-line system) for 8 km, includes a 1.5 km tunnel, a short trench, and some elevated segments. Edmonton’s North LRT is $750 million for 3.3 km, of which about 1 km is in tunnel and the rest at-grade. But while it’s hard to find the exact ratio because of those mixed projects, the costs are not consistent with the ratios found in Flyvbjerg’s sources.
Outside Canada, those ratios seem to hold up better. American above-ground transit projects, such as the Portland Milwaukie extension and the Washington Silver Line, are as expensive as Calgary and Edmonton’s light rail, but American subways are much more expensive than Toronto’s Eglinton subway ($325 million/km, 77% underground and the rest elevated): Manhattan tunneling is more difficult, so its $1.3-1.7 billion/km cost may not be representative, but conversely, BART to San Jose’s $4 billion for about 8 km of tunnel is for tunneling partially under a wide railroad right-of-way, with no crossings of older subway infrastructure as is the case for Eglinton at Yonge.
Conversely, French tunneling costs are comparable to or lower than Canadian ones, but at-grade light rail is far less expensive than in North America. The RER E extension was at least as of 2009 budgeted at €1.58-2.18 billion for 8 km of tunnel (see PDF-page 79 here; this excludes €620 million in improvements to the existing commuter lines the tunnel will be linked with) – somewhere between the per-km costs of Vancouver and Toronto subways, but in a much denser environment with more infrastructure to cross. But the cost range for Parisian trams is much lower, about €30-50 million per km, in line with the subway:tram cost ratio of 4-6; the cost range in other French cities tends to be a little lower.
What this means is that in Canada in general, and in Vancouver in particular, questions about what mode to build should have higher-end answers than elsewhere. It doesn’t mean that the Eglinton subway is justified, but it does bias suburban rail lines in Vancouver toward elevated SkyTrain extensions rather than light rail, and inner extensions toward SkyTrain subways. For the same cost of building a subway under Broadway, Translink couldn’t build too much additional light rail; it could build two lines, say on Broadway and 41st, or maybe three if both non-Broadway routes are short, but certainly nothing like the entire network that SkyTrain opponents believe is the alternative, citing European tramway construction costs.
Are Forecasts Improving?
In response to my takedown of Reason, specifically my puzzlement at the estimates of inaccuracy in traffic forecasts, alert reader Morten Skou Nicolaisen sent me several papers on the subject. While there is past research about traffic shortfalls, for example this paper by Flyvbjerg (hosted on a site opposing the Honolulu rapid transit project), Flyvbjerg’s references are papers from twenty years ago, describing mostly subway projects in developing countries, but also rapid transit and light rail projects in the US built in the 1970s and 80s. Unlike Flyvbjerg, who posits that planners are lying, the authors of the papers he references have other theories: currency exchange rate swings, the challenges of underground construction, inaccurate forecasts of future economic growth, outdated traffic models based on postwar road traffic models. See section 6 of Walmsley and Pickett, and sections 3.3 and 4.2 of Fouracre, Allport, and Thomson (see also the range of costs for underground construction in developing countries in section 3.3).
The question is then whether things have improved since 1990. Since the first study to point out to cost overruns and ridership shortfalls in the US was by Pickrell, the question is whether post-Pickrell lines have the same problems, or whether there are better outcomes now, called a Pickrell effect.
The answer, as far as ridership is concerned, is very clearly that ridership shortfalls are no longer a major problem. See recent analysis by Hardy, Doh, Yuan, Zhou, and Button; see specifically figure 1. Cost overruns also seem to be in decline and are no longer big, although a multiple regression analysis finds no Pickrell effect for cost, just for ridership.
In particular, there is no comparison between projects from 30 years ago, most of which are underground, and present-day developed-world high-speed and urban rail lines.
Low- and Medium-Hanging Fruit
The entire process I try to apply to cost-effective rail construction is to figure out the best places to spend money per unit of time saved. Obviously, this is mainly for intercity traffic – for local traffic it’s more interesting to look at cost per rider – but it’s intercity traffic that benefits most from this kind of optimization anyway.
With the Northeast Corridor, there are definitively low-hanging fruit, such as new (non-FRA-compliant) rolling stock, raising superelevation, improving platform access within present infrastructure, and adding constant tension catenary south of New York. Those are so useful, in terms of cost per benefit to travelers, that they should all be pursued immediately. The more interesting question is what to do afterward. I’ve proposed a few things before, in various posts, but it’s more useful to talk about the general process of determining where to build, i.e. which fruit are medium-hanging and which are high-hanging. I think traditionally this boils down to two parameters:
1. Cost per minute saved, including by improving reliability. This is of course adjusted for demand: New York-Philadelphia minutes are the most important, then Philadelphia-Washington, then New York-Boston, and finally other corridors.
2. Reduction in operating cost. If the rest of the network is based on hourly trains, and you need to squeeze five additional minutes to reduce your travel time including turnaround to an integer number of hours, it’s worth spending the money on it to avoid needing extra trains, or a schedule that doesn’t match up with the rest of the network. (And the same is true if the network repeats every 52 minutes – there’s nothing magical about 60 here.)
However, three additional, less obvious parameters are important:
3. Usefulness to local transit, in terms of speed, reliability, etc. This essentially reduces the cost imputed to intercity trains per minute saved.
4. How low-hanging the fruit becomes if combined with another. The issue is that eliminating two adjacent slow zones in an otherwise fast run saves more than double the time of eliminating just one of the two; another way to think about it is that eliminating the second slow zone saves more time than eliminating the first. This can result in counterintuitive phasing in a constrained funding environment.
5. How high-hanging the fruit becomes if it is delayed. If there is significant disruption to service coming from construction, then it’s better to do it earlier than would be warranted based on pure cost-per-minute-saved calculation.
#3 features prominently in Amtrak’s preexisting planning – in fact, too prominently, with its emphasis on Gateway. It’s a matter of agency imperialism more than anything, but it can lead to good results elsewhere. It’s really points #4-5 that aren’t optimized – either the costs are out of whack, or they are ignored. Washington Union Station‘s remodeling is an example of overemphasizing #5 without considering the cost or the ability to use existing infrastructure more cheaply; Transbay Terminal‘s poor column placement is an example of ignoring #5 entirely.
The reason I push concrete-heavy improvements between New Rochelle and Stamford, but not between Stamford and New Haven, comes essentially from those three points. The Cos Cob Bridge replacement is good because of points #1, #3, and #5; an I-95 bypass of Port Chester and Greenwich then interacts with it positively because of point #4, and also provides a suitable passing segment between high-speed and express commuter trains. In contrast, the projects east of Stamford don’t interact so positively: they involve constructing various bypasses, at high cost per minute saved, in separate locations so that the same increasing returns do not exist, and generally it’d not difficult to connect the bypasses to existing tracks so that the disruption effect of #5 is not in place.
Surreptitious Cost Escalations and Spurious Cost Savings
In response to my previous post regarding the extreme cost of Amtrak’s new Northeast Corridor Vision plan, people both on forums and on blogs have said that it’s actually a cost saving coming from bundling the Vision with the earlier Master Plan. Although the original cost was $117 billion and the current one is $151 billion, the current one is still lower than the sum of the original cost plus the cost of the Master Plan, by $15 billion. This looks like a cost saving, but it’s actually not.
The explanation is that the Master Plan still contains elements that are unnecessary if large portions of the line, including nearly the entire New York-Boston segment, are bypassed. The list of projects on PDF-page 21 of the plan contains additional tracks in eastern Connecticut and a replacement of the bridge over the Connecticut, boosting capacity. However, if the intercity trains are removed from the line, there is no need to boost capacity. Low-performing branch lines – and this is what Shore Line East is without intercity trains – can be and are spun off to regional agencies: JR East abandoned the northern reaches of the Tohoku Main Line as it extended the Tohoku Shinkansen, spinning them off to the prefectures to run as it is not interested in running regional rail at the low densities of northern Japan and the intercity functions were all rolled into the Shinkansen.
So in that sense, any cost saving was spurious: Amtrak simply removed some, but not all, Master Plan projects that are obviated by the plan for a bypass. It’s no different from the fact that the Tokaido Main Line and the PLM Line are still double-tracked, as in both cases the national railroad chose to build high-speed rail parallel to them instead of to quadruple-track them to boost capacity.
But on top of that, there is at least some cost overrun implied in the plan. The cost breakdown is not detailed enough to make this clear, but the cost of the Gateway Tunnel is up to $14.7 billion, from $10-13.5 billion last year. It’s buried deep enough that it’s hard to see, or discern what the total overrun is, but it’s there. So Amtrak has a surreptitious cost escalation for the Gateway project at the same time as a spurious cost saving from partially merging the Vision and the Master Plan.
The CAHSR-SNCF Bombshell
The most important HSR news right now is the recent revelation on the LA Times, strategically made immediately after the state legislature had voted to appropriate the required money to begin construction, that the California HSR Authority had brushed off an offer from SNCF, which came with funding attached, to take over and build the project. SNCF’s offer would run trains through I-5 all the way instead of the chosen route vaguely along State Route 99, bypassing Bakersfield and Fresno.
Stephen Smith, who’s talked to the same sources who spoke with the LA Times, says that SNCF was interested in either I-5 or a greenfield alignment just west of SR 99 that would serve Bakersfield and Fresno with edge-of-urban area stations, though I-5 was “the only alignment… that private backers felt was financially viable.”
Although in 2009 SNCF submitted a document proposing to build the project along the chosen alignment, serving Bakersfield and Fresno at city-center stations, the document is stamped “Do not circulate outside government,” and the source says explicitly that the HSR Authority had pressured SNCF not to say anything about alignments, and more recently rejected its I-5 (or west-of-99) proposal out of hand. The HSR Authority responded, brushing off some of the article’s concerns and raising what is essentially FUD: HSR Authority Chair Dan Richard made sure to mention the manufactured controversy over the fact that SNCF had been forced by the Nazis to help ship Jews to extermination camps.
I do not have any access to sources, confidential or otherwise, but at least some analysis of this can be made from public information. The key cost numbers the LA Times provided are,
The I-5 route would have been the shortest, fastest and lowest-cost alignment, with a price tag of about $38 billion — sharply less than the rail authority’s current route, which has been estimated at various times to cost $34 billion, $43 billion, $98 billion and now $68 billion.
The problem: the cost of the Central Valley segment is a sufficiently small portion of the cost that it can’t possibly make the entire or even most of difference between $38 billion and the current price tag. It’s unclear to me what $38 billion should be compared to – 2010 dollars or year-of-expenditure dollars, and the Blended Plan ($68 billion YOE) or the full Phase 1 ($98 billion YOE) – but the lowest number, the Blended Plan in 2010 dollars, is $53 billion, $15 billion more than SNCF’s proposal. I have asked what exactly the comparable Authority number is and will update when I get an answer.
In contrast, the Initial Construction Segment, which includes a large majority of the Phase 1 Central Valley segment (though not the most difficult part, through Bakersfield) is $5.2 billion in 2010 dollars (see PDF-page 15 of the 2010 business plan); the actual money appropriated is just over $6 billion, but if we’re doing YOE numbers then we must compare $38 to $68 and then the difference doubles. Since the cost of construction along I-5, although lower than along the chosen route with its viaducts and grade separations, is nonzero, we get that a relatively small fraction of the cost difference, perhaps a quarter or a third, is attributable to this design choice.
So if it’s not just I-5, what is it, and what can we learn from this? I believe the results should if anything make the HSR Authority look even worse than it already does in light of this story and its lackluster response. This is because it means the entire amount of money required to build to SNCF’s specs but serve Bakersfield and Fresno, at edge-of-urban-area stations if the cities object to the noise of trains through downtown (which at least Fresno does not), is a small number of billions of dollars. This means that if service to those two cities was the true dealbreaker, the Authority could have asked SNCF to change the alignment back to the chosen route or a greenfield route just west of it, and then demanded that Fresno and Bakersfield pay for the difference.
Fresno had been hoping to use statewide HSR money to bundle its own project of grade-separating the freight tracks through the city along the Union Pacific right-of-way. The poor relationship between the HSR Authority and Union Pacific dashed the plans to use its right-of-way where it is superior to the BNSF alignment. That said, the threat of being left out of the network entirely could have induced it to come up with money for this on its own; the segment of the project through the Fresno area is $1-1.5 billion. A downtown station in Bakersfield is more difficult, especially if one gets from the Central Valley to the LA Basin via the Grapevine rather than via Palmdale, but in Bakersfield there are some complaints about the impacts that a downtown alignment would cause, and at any rate even I-5 would come close to serving the urban area.
In addition, portions of the cost savings that do not come from alignment choice have to be attributed to superior cost control. Part of the difference between American and rest-of-world construction costs has to come from more mundane issues such as proper supervision of contractors, since the difference is large and persistent and remains in place even after one controls for such issues as the percentage of the route that is in tunnel. (For example, recall that the Tohoku Shinkansen extension cost $4.6 billion for 82 km, of which a third is just one long tunnel and another sixth additional shorter tunnels).
The other lesson we can learn from this episode is political, regarding cost escalations and strategic misrepresentation. Too many political transit supporters downplay the issue. LightRailNow claims that a cost escalation that occurs before construction starts is not a cost escalation, but just a more accurate cost estimate; Robert Cruickshank did not quite say the same when the 2010 business plan for CAHSR revealed costs had doubled, but came close to it by describing the plan as more careful and thorough. In reality, large bombshell reports shortly after money has been obligated are a hallmark of secretive, untrustworthy planning, precisely the kind likeliest to lie about costs.
The main problem with megaprojects is not the dollar cost. In the grand scheme of things, a lot of them can generate enough social rate of return, and sometimes even a purely financial rate of return; at any rate, even when they are cost-ineffective, they are a small proportion of total GDP. The problem is getting politicians to vote for them. This means that issues such as institutional inertia are in play. It’s harder to get people to rescind money than to get them to vote against spending money.
If the primary cause of cost escalations is unforeseeable challenges, then we will see them come in timed with engineering developments, contract awards, and actual construction. If instead it is strategic misrepresentation, then they will be timed to come just after major political hurdles regarding funding: the passage of a referendum, legislative funding, an electoral victory by a supportive politician. The California HSR bombshells aren’t quite this clean, but they come a lot closer to the outright lying hypothesis.
Cost Bundling
It’s common to bundle multiple construction projects into one, either to save money or to take advantage of a charismatic piece of infrastructure that can fund the rest. For example, on-street light rail is frequently bundled with street reconstruction or drainage work, and rail lines can also be bundled with freeway construction in the same corridor (as in Denver) or widening the road they run under (as in New York). Combining different constructions into one project can be a powerful cost saver, as seen in the Denver example and also in Houston.
The problem is when it leads to scope creep. In case there is one charismatic project that carries the rest, it’s always tempting to add more features to the project to get more funding. If the funding comes from a pot specific to one use – in the examples in this post transit, but it could be anything – then it will also lead to a misleading reporting of the total cost, making it look higher than it is. Part of the surreptitious underfunding of transit in the US comes from such bundling, for example parking garages for commuter rail. More commonly the projects in question will be transit, just not necessarily cost-effective on their own.
Because one agency tends to have the lead on such projects, there is no incentive for cost control. The worst case I know of is high-speed rail construction on the Caltrain corridor; the segment from San Francisco to San Jose incurred the highest cost overrun in the system, its cost rising by a factor of nearly 3 versus a systemwide average of 2, and most of the overrun came from tunnels and viaducts reinforcing various agency turf boundaries.
The flip side is bundling projects not so that a charismatic major project can support others, but rather so that a major project can get the support of others by throwing them bones. This is essentially Amtrak’s Vision plan for the Northeast: Gateway is meant to get support from New York and New Jersey now that ARC is canceled, Market East is meant to get support from Philadelphia on the dubious idea that the city wants a Center City stop, and so on. In this case, there is a symbiotic relationship: the charismatic project, in this case HSR, gets to brand all these separate projects as necessary for a grand goal, while the presence of the smaller project ensures that local politicians, whose priorities rarely include providing intercity transportation maximally efficiently, support the project.