Category: Construction Costs

High Costs Should not be an Excuse to Downgrade Projects

In an environment of high construction costs, there’s an impulse to downgrade projects: build light rail instead of subways, BRT instead of rail, commuter rail on existing tracks instead of greenfield light rail, shared-lane buses and streetcars instead of ones running in dedicated lanes. Some of those downgrades have already gotten flak individually from transit supporters, of which Jeff Wood’s recent article about commuter rail and Mike Dahmus‘s repeated attacks on BRT and the Austin commuter rail are good examples.

I do not think anyone has made the following point connecting those projects: the same causes that lead to incompetence in running one mode will lead to incompetence in running all other modes. Regardless of the mode chosen, a project in the US can expect to cost several times as much as a comparable European projects. (As a single exception, FRA-compliant commuter rail can be expected to be especially bad, because there the regulations and operating traditions are especially bad.) With very few exceptions, building BRT in a corridor that begs for rail, suburban transit in a city that needs urban transit, peak-only commuter rail, and other apparent cost savers will incur the same cost escalations as in every other mode.

In particular, downgrading service will not save any money, and going to the FRA will actually raise costs. This affects both the choice of technology and the choice of how to use it: American light rail lines keep the per-km costs reasonable by building out to exurbia, creating ersatz commuter rail with low ridership. This is epitomized in Dallas, whose light rail is setting records for low per-km ridership, and whose plans for the next decade are projected to cost $2.4 billion for 60,000 additional weekday riders, i.e. $40,000 per rider. In contrast, Houston’s urban Main Street Line cost $300 million for 34,000 riders, which is about $10,000 per rider in today’s money, the lowest per-rider cost in the US in the last 15 or so years. And Houston is unusual; more common is the Portland Milwaukie light rail extension, projected at $55,000 per rider and $110 million per km.

If we start looking abroad, we see the same pattern. When European LRT is more expensive, as for example in Nice, it’s because it’s very high-ridership urban infill. And Nice is an exceptionally expensive case; Lyon’s trams are cheaper. Few European light rail lines go over $10,000 per rider, and on Yonah Freemark’s list of recent and planned projects in Paris, a few lines are below $5,000.

Something similar is true for bus transit. Despite Jaime Lerner’s admonition that “Creativity starts when you cut a zero from your budget,” American cities have failed to create good BRT under budget constraints. The Los Angeles Orange Line is expensive for the ridership it has ($15,000/rider in construction, with the high operating costs of a bus) and has mediocre signal priority. Under a budget constraint, Los Angeles still built something inferior to the Blue Line, or even the expensive-to-build, cheap-to-operate Red Line subway.

As an aside, this also holds for the costs of transit versus highways. In the rest of the developed world, prudent cities invest most or all of their transportation money into mass transit, and try to restrain traffic. This should also be true in the US, where subways and light rail are expensive, but so are highway projects: see the 8-times-over-budget Bay Bridge Eastern Span replacement, the Big Dig, and the proposed Tappan Zee Bridge replacement, and compare them to the more complex Øresund Bridge-Tunnel connecting Denmark and Sweden.

At worst, the high costs of transportation in the US imply that government should spend its money elsewhere – on health or education, or perhaps tax cuts. Even then I’m personally skeptical about the efficiency of the marginal dollar: American health care is infamously expensive, tax expenditures are byzantine and in such cases as the mortgage tax credit create the wrong sort of incentives, and so on.

Second Avenue Subway Phase 1 is by far the most expensive urban rail project in the world today, but its per-rider cost is only $25,000, high by European and Japanese standards but lower than any other rail line proposed or under construction in the US today. It would not be approved in today’s pennypinching climate, and even ten years ago it was funded only thanks to legislative blackmail by Assembly Speaker Sheldon Silver, whose district would be served by Phase 3. Of course at normal cost it would be very cheap, just as at normal cost everything else in the US would become much more affordable, but it is still more cost-effective than seemingly cheap commuter lines.

The upshot is that from the perspective of transit planning, high costs should not deter anyone. Other than the special rule that FRA-compliant commuter rail is practically never justifiable, the relative merits of projects are about the same in the US as in all other developed countries. Agencies all over the world have to choose between a subway, five trams, and twenty busways. In an environment of high costs, it still make sense to draw plans as if the costs are normal, and when the costs are not normal, build more slowly and start with the most cost-effective lines. If agencies and activists behave as if there’s no money for good transit, they will only get bad transit.

US Rail Construction Costs

Update 2017/7/1: this is the most linked-to post of mine about construction costs, even though the dataset here is relatively small. You can see links to more posts, with more datapoints, on my static construction cost page. The long and the short of it is that in non-English-speaking developed countries, the typical range for urban subways is $100-300 million per km, with a few outliers in both directions.

This is a placeholder post, in which I’m just going to summarize the costs of projects in the US and the rest of the world. I will focus on subway tunnels, but also put some above-ground rail for comparison. No average is included – all I’m doing at this stage is eyeballing numbers. As far as possible, numbers are inflated or deflated from the midpoint of construction to 2010, and exclude rolling stock. The PPP exchange rate is €1 = $1.25, $1 = ¥100. For now, only dense infill subways are included.

East Side Access: $8.4 billion; excluding preexisting tunnels, this consists of 2 km of new tunnel in Manhattan and a new connection in Queens. So this is about $4 billion per km. Update 2011/6/21: the link here stopped working. Here‘s a slightly older link, saying the cost is $8.1 billion.

Second Avenue Subway Phase 1: $4.9-5.7 billion in 2007-17 for about 3 km of new tunnel. This is $1.7 billion per km.

7 Extension: $2.1 billion in 2007-12 for 1.6 km of new tunnel. Note that this has only one station, an unusually sparse spacing for a dense urban area. This is $1.3 billion per km.

Crossrail: £15 billion in 2008-18 for a line of more than 100 km, of which the primary component is 22 km of new tunnel under Central London and Heathrow Airport. Due to the extensiveness of the London Underground network, this is the most complex project on the list. The cost per unit of tunnel is about $1 billion per km, making this the only outside New York to cross the 1 billion line.

Central Subway: $1.58 billion in 2010-6 for 2.7 km of light rail tunnel. This project is only on this list because it has to cross under the double-decked subway (Muni and BART) under Market; the standards, including station size, are for light rail. This is about $500 million per km.

Jubilee Line Extension: £3.5 billion in 1993-9 for 15.9 km of route, of which about 80% is underground. The line went over budget by 66%, crosses under the entire London Underground network, and crosses under the Thames four times. This is about $450 million per km.

Amsterdam North-South Line: €3.1 billion in 2009 money for 9.5 km of new tunnel. The project has run over budget by a factor of more than two, leading to accusations of boondoggle and remarks that the project should not have been built. This is $410 million per km.

Toei Oedo Line: ¥1.4 trillion (Japan has no inflation, so year of construction does not matter) for 40.7 km of new tunnel. While the stations are normal subway stations, the subway tunnels are of smaller than normal diameter due to the use of linear induction technology. This is $350 million per km. A short subway extension of the Mita Line cost nearly $500 million per km, but the information about it is on a Toei factsheet that’s been scrubbed from the net.

Tokyo Metro Fukutoshin Line: ¥250 billion for 8.9 km of new track. This is $280 million per km. Tokyo Metro has claimed future lines will be $500 million per km as a reason to not build future extensions.

Berlin U55: €320 million for 1.8 km of tunnel in 1996-2009. While this line does not cross or connect to any older subway, it is in the center of the city, and thus qualifies as urban infill. This is $250 million per km.

Paris Metro Line 14: €1.13 billion in 1998-2003 for 9 km. This line crosses under the Seine and had construction problems due to catacombs. This is $230 million per km.

Circle MRT Line: S$10 billion for 35.7 km, to be opened in full next year. This includes a 50% cost overrun, and a substantial delay coming from a highway collapse in 2004 that killed four workers. Because the exchange rate, including PPP, has changed considerably in the last ten years, I’m not inflating, and instead using the present rate, making this the least certain conversion on the list. This is $220 million per km.

Copenhagen Circle Line: DKK21.3 billion in 2010 for 15.5 km. At today’s exchange rate, this is $4 billion and $260 million per km in exchange rate, but the Danish currency is severely overvalued, and in PPP (judging by the ratio of PPP to exchange rate GDP per capita) this is $170 million per km.

Durchmesserlinie: CHF1.82 billion in 2007-13 for 9.6 km of new commuter tunnel under the city, relieving the existing tunnel. This is $215 million per km in exchange rate, but the Swiss franc is severely overvalued, and the PPP value is only $136 million per km.

Barcelona L9/10: €6.5 billion in 2006-14 for 47.8 km. This line is fully automated and is nearly 100% underground, and has gone over budget by a factor of more than three. This is $170 million per km.

Naples Metro Line 6: €533 million in 2007-12 for 5 km of fully underground metro. This is  $130 million per km.

Milan Metro Line 5: €500 million for 5.6 km of fully underground driverless metro. This is about $110 million per km.

Seoul AREX: 4.2 trillion won ($4.2 billion) for 61 km of line, about 60% underground, linking Seoul with Incheon Airport. This is a combined commuter and express line, and even all-stop trains only make 10 stations, by far the sparsest spacing on this list. This is about $110 million per km of tunnel – realistically a little less since the above-ground segments are greenfield.

Seoul in general gives its tunneling construction cost as $100 million per km in context of a proposal of an extension of the Sin Bundang Line that assumes a much lower budget, only $40 million/km.

Madrid gives the construction costs of its 1999-2003 expansion as €42 million/km, including rolling stock; translated to today’s dollars, this is $65 million per km. But those projects were not all infill and not all fully underground.

Observe from the low costs of Italian subways that corruption alone cannot explain high American and British costs. High Japanese costs can be explained by strong property rights protections and a process that favors NIMBYism; Paul Barter‘s thesis quotes sources arguing that the high costs of land acquisition in Japan are a reason why its cities never engaged in American-style urban renewal or massive freeway building.

Observe also that developing countries’ PPP costs aren’t very low: Beijing’s subway extensions cost about $150 million per km – see e.g. here and apply a PPP exchange rate of about $1 = 3.8RMB. The labor costs in developing countries are lower, but so is labor productivity.

Observe finally that Bent Flyvbjerg, known primarily for his work on megaproject construction cost overruns and strategic misrepresentation, wrote a paper on comparative US and European construction costs, which understated the conclusion that American costs are higher. The reason for his understating the conclusion is that the American projects examined are quite old, from the 1980s, and many have large above-ground parts.

Although the US projects included are only in New York and San Francisco, both high-cost cities, similarly high costs occur in other cities, just the projects are above ground. Portland’s light rail Milwaukie extension and Washington’s predominantly above ground Silver Line both have cost ranges of about $100-150 million per km, enough for a full subway in many European cities. Los Angeles’s Subway to the Sea is budgeted at $6 billion for the full Wilshire route to Santa Monica, i.e. $300 million per km; this is not really infill since it extends the subway out, but the neighborhoods served are quite dense, so it might qualify.

For some links of outward extensions abroad, see Brussels ($60 million/km) (deleted because the link is wrong and I can’t find the right one) the future plans in Paris ($100-200 million, with one line at $50 million; 2018 update: see updated costs around $200-250 million here and here) and Seoul’s upgraded Gyeongchun Line ($33 million).