Category: Construction Costs

More Things that are not Why New York’s Construction Costs are High

The most annoying person I regularly deal with on social media is Walkable Princeton/YIMBY Princeton, a biology professor at Rutgers who constantly criticizes my writings on comparative construction costs, and usually raises good points. Dealing with zombie arguments (China, anything Elon Musk says, etc.) is so much easier. A few days ago, he put up a post summarizing 20 potential reasons why subway construction costs in New York (and in the US in general) are high. He’s also repeatedly made a separate argument on social media, not mentioned in the post, expressing skepticism that the construction cost differences are real, rather than just statistical artifacts.

In this post, I am going to purposely not talk about the two biggest criticisms – the claim about the statistical differences, and the argument from local expertise (points #7 and #8 in his post). Those require dedicated posts, and the argument from local expertise should really be tackled in two separate posts, one about project size (comparing cities that build long subway lines with ones that build many short subway extensions) and one about the undisputed negative correlation between construction costs and the extent of construction across cities. I will deal with this in the next few weeks or months, depending on publishing schedules elsewhere. In this post I’m instead going to deal with the weaker criticisms.

The first five points made in the post come from arguments I discussed here, saying that they are not real reasons why US construction costs are high. The sixth point concerns project size. Since the seventh and eighth point will be a dedicated post, I will start with the ninth point.

Of note, many of the explanations offered are serious and relevant, just not to the specific problem of high construction costs of urban rail. They are relevant to some construction costs problems for high-speed rail, and operating costs, and rolling stock procurement costs. But the explanation for expensive urban tunneling is most likely elsewhere. Only one point below, #13, begins to address that specific issue, and even it seems to me to be at most a partial explanation.

9. ‘Buy America’ provisions – Regulations requiring transit agencies to purchase equipment built in the US may drive up costs, as overseas manufacturers have to build a factory in the US to produce the needed kit. Other nations buy transit equipment more regularly, so have ready access to an efficient supply chain.

Buy America provisions indeed raise American costs for small orders – but only for rolling stock. Dedicated factories, often built in-state for added protectionism, make trains for $3-5 million per car (for example, compare Muni Metro’s $4 million/car order for 23-meter cars with Strasbourg’s $4 million/car order for 45-meter cars). Only the biggest orders, such as those for the New York City Subway, the LIRR, and Metro-North, have enough scale to control costs.

However, this is not an issue for infrastructure construction. The bulk of the cost of civil infrastructure is not specialized machinery, which American cities import anyway (the tunnel-boring machine for the 7 extension was made in Germany). It’s local labor and materials, and less specialized machinery for digging earthworks for stations.

10. Bad attitude – Call it a ‘New York state of mind’ – MTA old dogs may prefer to see a project fail than to be proven wrong or see praise go to an agency rival. Not clear that New Yorkers have a worse attitude than people from other big cities, but certainly worth considering.

11. Chaotic political environment – Transit projects must be agreed by too many agencies and personalities, some of whom may have conflicting priorities. For example, NY Governor Andrew Cuomo doesn’t seem to get on with Mayor Bill DiBlasio, and the less said about Governor Christie the better. Personality clashes and inter-state squabbling at the Port Authority board have frustrated long-term planning. Donald Trump controls federal funds that may be needed to fund new transit projects.

These are really the same criticism: agency turf battles. Those can make cities build the wrong project, or overbuild a tunnel in order to avoid sharing facilities with another agency. The bulk of the construction costs of high-speed rail on the Northeast Corridor, and a large fraction of those of California HSR, come from this. Readers who are familiar with debates about California HSR will know about the Altamont vs. Pacheco Pass controversy and about avoidable tunnels like Millbrae.

However, this isn’t really what’s happening in urban subways. The Gateway project has unnecessary scope like Penn Station South, but even the bare tunnel is estimated at $11 billion.

12. Lack of stable long-term funding – Long-term funding for transit projects is uncertain, and even part-built projects can be canceled at any moment (see Governor Christie, ARC tunnels). New York has a long track record of abandoning transit projects, and the Second Avenue Subway project took nearly 100 years to do.

Midway cancellations are really a symptom of high costs rather than a cause. At cancellation, ARC was projected to cost $10-13 billion, up from $3 billion in the major investment study from 2003. This is not unique to the United States: high costs and construction impact for Stuttgart 21 led to widespread opposition to the project from within Stuttgart, leading to the election of Germany’s first Green-led state government; the Green Party opposed Stuttgart 21 and proposed a cheaper, lower-impact project without tunneling. It did not cancel the project, but put it up to referendum, which failed – the majority of state voters, and even of Stuttgart voters, wanted the project to keep going. Going to a second referendum on canceling a project, rather than canceling it by executive fiat as in New Jersey, is not unique to Germany: in Florida, Governor Jeb Bush put a second referendum on the ballot in 2004, successfully killing high-speed rail.

13. Project bloat – Planners may over-do transit infrastructure, for example by hiring a superstar architect like Santiago Calatrava to design the Port Authority PATH station instead of ‘Joe Goodenough’. Cavernous two-level stations in the new Second Avenue Subway stations may not contribute substantially to function, and drive costs up a lot.

This is indeed a serious problem! New York has been overbuilding stations since the 1930s, when the IND subways had full-length mezzanines. I encourage the New York-based readers to compare the size of the stations on the IND, such as West 4th Street or 145th Street on the A/B/C/D, and that of the stations on the IRT and BMT, such as Union Square. The Calatrava-designed PATH terminal was massively expensive more recently, and Second Avenue Subway is expensive in part because of the large stations.

And yet. Even relatively utilitarian American projects aren’t always cheap – again, the bare Gateway tunnel. Moreover, some of the project bloat is not really about overdesign, but about wrong political choices. Second Avenue Subway had no cut-and-cover construction except at 96th Street to stage the tunnel boring. Second Avenue is wide and the entire line could be built cut-and-cover. Cut-and-cover is highly disruptive to street merchants, but a hybrid solution, with cut-and-cover stations and bored tunnels between them, is possible and widespread in several low- and medium-cost cities, such as Madrid and Copenhagen. But even the stations were bored, which limited surface disruption at each station to a few cross streets, but made construction take much longer; the corner of 72nd and 2nd was unpleasant to walk around for most of the duration of the ten-year project.

14. Fire safety regulations – Modern standards for smoke clearance and emergency evacuation may require larger two-level stations that appear bloated.

15. Environmental regulations – Disruption to fragile ecosystems may not be as tolerated in the New York area as in some other countries, driving up costs.

16. ADA standards – Transit stations in New York must comply with federal accessibility requirements, meaning many elevators that drive up costs.

These issues exist throughout the developed world. New subways are step-free even in cities that make no effort to retrofit the rest of the system for wheelchair accessibility, such as Paris. We also know how much it costs to add elevators to stations, and it is a rounding error: during construction, making five more Crossrail stations accessible costs £19 million. Even retrofitting an old subway station for accessibility after construction is $25-40 million in the US (source: article about New York, interview with an accessibility planner in Boston). And as for environmental regulations, I doubt there are endangered species on the Upper East Side under Second Avenue.

17. Americans don’t care about transit – Other nations may take pride in their fancy rail systems, but we’ve got aircraft carriers and don’t care if the subway looks pretty worn.

18. High levels of sprawl – Whereas NYC is dense at the core, the surrounding metro area is not very dense. The Los Angeles metro area is in fact denser than the New York metro area. Low housing density, especially in the areas where rich folks live, makes transit less efficient and undermines public support for expensive transit investments.

Suburban drivers may not want to spend money on subways, but that should not make subways more expensive to build. It should reduce cost per rider, in the sense of lowering the maximum cost per rider that the political system is willing to build; but the effect on cost per km should be neutral.

19. Corruption – Is the Mob siphoning off loads of the money that is supposed to go to build transit??

It probably is. And yet, corruption levels in Italy are far higher than in the United States, and yet costs are pretty low. Corruption levels in Spain and South Korea aren’t especially low. And Singapore, renowned for its clean government (below the level of the prime minister, at least, but he doesn’t decide on subway alignments), is a serious contender for most expensive subway outside the United States.

20. Terrible leadership – Ronnie Hakim, the current MTA Director, is supposedly seen as incompetent by many of her staff. Joe Lhota, the MTA Chair, doesn’t even work full-time at the job. The Port Authority Board is stuffed with Chris Christie stooges, some of whom may know nothing about transit.

Hakim is incompetent and I have sources within the MTA who are exasperated with her indifference to one of the most fundamental goals of rapid transit (namely, being rapid). Much like explanation #9, there is a serious problem here, but it doesn’t affect tunneling costs. It affects operating costs, which appear to be higher in New York than in any other city participating in CoMET (see PDF-p. 7 here: the highest-cost system on the right is in fact New York). But it is not about tunneling. Unlike Hakim, long-time MTA Capital Construction chief Michael Horodinceanu is not hated by the junior and mid-level planners who leak to the press, and unlike Lhota, he works the job full-time worked the job full-time until retiring earlier this year.

Second Avenue Subway Phase 2 to Cost $6 Billion

Since the 2015-9 capital plan, the New York MTA had been including the second phase of Second Avenue Subway in its capital plan, without a clear estimate of its projected cost. The rumors said the cost would be about $5 billion. A new media story finally gives an official cost estimate: $6 billion. The total length of the project, from 96th Street and 2nd Avenue to 125th Street and Lexington, is about 2.7 km. At $2.2 billion per km, this sets a new world record for subway construction costs, breaking that of the first phase of the same line, which only cost $1.7 billion per km. See a compendium of past posts here to look how these projects stack up. For people not interested in combing through multiple old posts of mine, the short version is that outside the Anglosphere, subway tunnels typically cost $100-300 million per km, with outliers in both directions, but even inside the Anglosphere, costs are in the mid-to-high hundreds of million per km.

In some way, the high cost of SAS phase 2 is more frustrating than that of phase 1. This is because 1 km of the 2.7 km of route preexists. SAS construction began in the 1970s, but was halted due to New York’s financial crisis. In East Harlem, some actual tunnel segments were dug, roughly between the proposed station locations at 96th, 106th, 116th, and 125th Streets; Wikipedia has a more detailed list. Construction of phase 2 thus involves just the stations, plus a short bored segment under 125th Street to get from Second Avenue to Lexington, for a connection to the 4, 5, and 6 trains.

Not having to build tunnels between the stations is beneficial, not as a cost saver in itself but as a way to reduce station costs. In phase 1, it appears that most costs were associated with the stations themselves; if I remember correctly, the cost breakdown was 25% for each of three new stations, and 25% for the tunnels in between. The reason is that the stations are quite deep, while the tunneling in between is bored, to reduce surface disruption. Deep stations are more expensive because they require more excavation, while tunnel boring costs depend more on soil type and how much infrastructure is in the way than on depth. Counting the extra expense of stations, bored subways cost more per km than cut-and-cover subways, but create less surface disruption away from station sites, which is why this method was chosen for phase 1. In contrast, in phase 2, most construction is stations, which would favor a shallow cut-and-cover solution.

Unfortunately, according to rumors, it appears that the MTA now judges it impossible to use the preexisting tunnels in phase 2. If this is true, then this would explain the higher cost (though it would justify $400 million per km, not $2.2 billion): they’d have to build underneath those tunnels. But if this is true then it suggests severe incompetence in the planning stage, of the kind that should get senior employees fired and consultants blacklisted.

The reason is that Second Avenue Subway was planned as a single line. The Environmental Impact Statement was for the full line, including the proposed construction techniques. The phasing was agreed on by then; there was only enough state money for phase 1. This isn’t an unexpected change of plans. I’d understand if in the 2000s it was found that tunnels from the 1970s were not usable; this happened further south, in phase 4, where a preexisting tunnel under Chrystie Street was found to be difficult to use. But in the 2000s the SAS studies signed off on using the tunnels in Harlem, and what seems to be happening is that phase 1, built according to the specifications of the same study, is too deep for using the tunnels.

At $6 billion, this line shouldn’t be built. I know that it goes to a low-income, underserved neighborhood, one that I’ve attacked New York before for taking years to equip with bike lanes (scroll down to my comments here). But the ridership projection is 100,000 per weekday, and $60,000 per weekday rider is too much. Phase 1, providing an underrated east-west connection and serving a denser neighborhood, is projected to get 200,000, for a projection of around $25,000 per weekday rider, which isn’t terrible, so it’s a justified project even if the costs could be an order of magnitude lower.

Were costs lower, it would be possible to build subways to many more low-income neighborhoods in New York. A 125th Street crosstown line, extending phase 2 of SAS, would provide Harlem with crucial east-west connectivity. Subways under Nostrand and Utica Avenues would serve a mixture of working- and middle-class neighborhoods in Brooklyn. A subway under Northern Boulevard in Queens, connecting to phases 3 and 4 of SAS, would serve one of the poorest parts of Queens. A network of tramways would improve surface transit in the South Bronx. Triboro Line would connect poor areas like the South Bronx and East New York with richer ones like Astoria. New York could achieve a lot, especially for its most vulnerable residents, if it could construct subways affordably.

But in a world in which subways cost $60,000 per weekday rider and $2.2 billion per km, New York cannot extend the subway. If it has money in its budget for investment, it should look into things other than transportation, such as social housing or schools. Or it could not borrow money at all to pay for big projects, and in lieu of the money spent on interest, reduce taxes, or increase ongoing social spending.

Given persistent high costs, I would recommend shelving SAS and future rail extensions in New York, including the Gateway tunnel, until costs can be drastically cut. There’s no shortage of worthy priorities for scarce budget in New York, both city and state. Health care in the US is too expensive by a factor of 2, not 10, and transfer payments have near-100% efficiency no matter what; it’s possible to exhaust the tax capability of a state or city just on these two items. Perhaps the need to compete with other budget priorities would get the MTA to cut waste.

Scope Creep is the New Black

In 2009, studies began for a replacement of the Baltimore and Potomac (B&P) Tunnel. This tunnel, located immediately west of Baltimore Penn Station, has sharp curves, limiting passenger trains to about 50 km/h today. The plan was a two-track passenger rail tunnel, called the Great Circle Tunnel since it would sweep a wide circular arc; see yellow line here. It would be about 3 kilometers and cost $750 million, on the high side for a tunnel with no stations, but nothing to get too outraged about. Since then, costs have mounted. In 2014, the plan, still for two tracks, was up to $1 billion to $1.5 billion. Since then, costs have exploded, and the new Final Environmental Impact Statement puts the project at $4 billion. This is worth getting outraged about; at this cost, even at half this cost, the tunnel should not be built. However, unlike in some other cases of high construction costs that I have criticized, here the problem is not high unit costs, but pure scope creep. The new scope should be deleted in order to reduce costs; as I will explain, the required capacity is well within the capability of two tracks.

First, some background, summarized from the original report from 2009, which I can no longer find: Baltimore was a bottleneck of US rail transportation in the mid-19th century. In the Civil War, there was no route through the city; Union troops had to lug supplies across the city, fighting off mobs of Confederate sympathizers. This in turn is because Baltimore’s terrain is quite hilly, with no coastal plain to speak of: the only flat land on which a railroad could be easily built was already developed and urbanized by the time the railroad was invented. It took until the 1870s to build routes across the city, by which time the US already had a transcontinental railroad. Moreover, intense competition between the Pennsylvania Railroad (PRR) and the Baltimore and Ohio (B&O) ensured that each company would built its own tunnel. The two-track B&P is the PRR tunnel; there’s also a single-track freight tunnel, originally built by the B&O, now owned by CSX, into which the B&O later merged.

Because of the duplication of routes and the difficult geography, the tunnels were not built to high standards. The ruling grade on the B&P is higher than freight railroads would like, 1.34% uphill departing the station, the steepest on the Northeast Corridor (NEC) south of Philadelphia. This grade also reduces initial acceleration for passenger trains. The tunnel also has multiple sharp curves, with the curve at the western portal limiting trains today to 30 mph (about 50 km/h). The CSX tunnel, called Howard Street Tunnel, has a grade as well. The B&P maintenance costs are high due to poor construction, but a shutdown for repairs is not possible as it is a key NEC link with no possible reroute.

In 2009, the FRA’s plan was to bypass the B&P Tunnel with a two-track passenger rail tunnel, the Great Circle Tunnel. The tunnel would be a little longer than the B&P, but permit much higher speeds, around 160 km/h, saving Acela trains around 1.5 minutes. Actually the impact would be even higher, since near-terminal speed limits are a worse constraint for trains with higher initial acceleration; for high-performance trains, the saving is about 2-2.5 minutes. No accommodation was made for freight in the original plan: CSX indicated lack of interest in a joint passenger and freight rail tunnel. Besides, the NEC’s loading gauge is incompatible with double-stacked freight; accommodating such trains would require many small infrastructure upgrades, raising bridges, in addition to building a new tunnel.

In contrast, the new plan accommodates freight. Thus, the plan is for four tracks, all built to support double-stacked freight. This is despite the fact that there is no service plan that requires such capacity. Nor can the rest of the NEC support double-stacked freight easily. Of note, Amtrak only plans on using this tunnel under scenarios of what it considers low or intermediate investment into high-speed rail. Under the high-investment scenario, the so-called Alternative 3 of NEC Future, the plan is to build a two-track tunnel under Downtown Baltimore, dedicated to high-speed trains. Thus, the ultimate plan is really for six tracks.

Moreover, as pointed out by Elizabeth Alexis of CARRD, a Californian advocacy group that has criticized California’s own high-speed rail cost overruns, the new tunnel is planned to accommodate diesel trains. This is because since 2009, the commuter rail line connecting Baltimore and Washington on the NEC, called the MARC Penn Line, has deelectrified. The route is entirely electrified, and MARC used to run electric trains on it. However, in the last few years MARC deelectrified. There are conflicting rumors as to why: MARC used the pool of Amtrak electric locomotives, and Amtrak is stopping maintaining them as it is getting new locomotives; Amtrak is overcharging MARC on electricity; MARC wants fleet compatibility with its two other lines, which are unelectrified (although the Penn Line has more ridership than both other lines combined). No matter what, MARC should immediately reverse course and buy new electric trains to use on the Penn Line.

Freight trains are more complicated – all US freight trains are dieselized, even under catenary, because of a combination of unelectrified yards and Amtrak’s overcharging on electric rates. However, if freight through the Great Circle Tunnel is desired, Amtrak should work with Norfolk Southern on setting up an electric district, or else Norfolk Southern should negotiate trackage rights on CSX’s existing tunnel. If more freight capacity is desired, private companies NS and CSX can spend their own money on freight tunnels.

In contrast, a realistic scenario would ignore freight entirely, and put intercity and regional trains in the same two-track tunnel. The maximum capacity of a two-track high-speed rail line is 12 trains per hour. Near Baltimore Penn the line would not be high-speed, so capacity is defined by the limit of a normal line, which is about 24 tph. If there is a service plan under which the MARC Penn Line could get more than 12 tph at the peak, I have not seen it. The plans I have seen call for 4 peak tph and 2 off-peak tph. There is a throwaway line about “transit-like” service on page 17, but it’s not clear what is meant in terms of frequency.

Regardless of what the state of Maryland thinks MARC could support, 12 peak regional tph through Baltimore is not a reasonable assumption in any scenario in which cars remain legal. The tunnels are not planned to have any stations, so the only city station west of Baltimore Penn is West Baltimore. Baltimore is not a very dense city, nor is West Baltimore, most famous for being the location of The Wire, a hot location for transit-oriented development. Most of Baltimore’s suburbs on the Penn Line are very low-density. In any scenario in which high-speed rail actually fills 12 tph, many would be long-range commuters, which means people who live in Baltimore and work in Washington would be commuting on high-speed trains and not on regional trains. About the upper limit of what I can see for the Penn Line in a realistic scenario is 6 tph peak, 3-4 tph off-peak.

Moreover, there is no real need to separate high-speed and regional trains for reasons of speed. High-speed trains take time to accelerate from a stop at Baltimore: by the portal, even high-acceleration sets could not go much faster than 200 km/h. An in-tunnel speed limit in the 160-180 km/h area only slows down high-speed trains by a few seconds. Nor does it lead to any noticeable speed difference with electrified regional trains, which would reduce capacity: modern regional trains like the FLIRT accelerate to 160 km/h as fast as the fastest-accelerating high-speed train, the N700-I, both having an acceleration penalty of about 25 seconds.

The upshot is that there is no need for any of the new scope added since 2009. There is no need for four tracks; two will suffice. There is no need to design for double-stacked freight; the rest of the line only accommodates single-stacked freight, and the NEC has little freight traffic anyway. Under no circumstances should diesel passenger trains be allowed under the catenary, not when the Penn Line is entirely electrified.

The new tunnel has no reason to cost $4 billion. Slashing the number of tunnels from four to two should halve the cost, and reducing the tunnels’ size and ventilation needs should substantially reduce cost as well. With the potential time gained by intercity and regional trains and the reduced maintenance cost, the original budget of $750 million is acceptable, and even slightly higher costs can be justified. However, again because the existing two-track capacity can accommodate any passenger rail volume that can be reasonably expected, the new tunnel is not a must-have. $4 billion is too high a cost, and good transit activists should reject the current plan.

Excuses for High Construction Costs

I have written many posts about international differences in subway construction costs. They’ve gotten a lot of media attention, percolating even to politicians and to a team of academics. Against this positive attention, there have been criticisms. Three come to mind: the numbers are incorrect, costs do not matter, and the comparisons are apples-and-oranges. The first criticism depends entirely on whether one disbelieves figures given in high-quality trade publications, government websites, and mass media. The second criticism I addressed at the beginning of the year, comparing the extent of subway construction in Sweden and the US. Today, after hearing people invoke the third criticism on social media to defend Ed Glaeser’s remark that it’s possible to cut US construction costs by 10% but not 75%, I want to explain why the comparisons I make do in fact involve similar projects. Some of the specific criticisms that I’m comparing apples and oranges are pure excuses, borne out of ignorance of how difficult certain peer subway tunneling projects have been.

First, let us go back to my first post on the subject: I was comparing New York, where I was living at the time, with Tokyo, Seoul, Singapore, London, Paris, Berlin, Amsterdam, Copenhagen, Zurich, Madrid, Milan, Barcelona, and Naples – all well-known global cities. Going even farther back, before I started this blog in 2011, I first saw the difference between New York and Tokyo in 2008 or 2009, and then looked up figures for London, Paris, and Berlin in late 2009. I was focusing on infill projects in the biggest cities in the first world, specifically to preempt claims that New York is inherently more expensive because it’s bigger and richer than (say) Prague. Until I started looking at third-world construction costs, I thought they’d be lower; see for example what I wrote on the subject in 2009 here.

I bring this history up to point out that at first, I was exceptionally careful to pick projects that would pass any exceptionalist criticism portraying New York or the US in general as harder to build in. With a more complete dataset, it’s possible to rebut most of the big criticisms one could make under the apples-and-oranges umbrella.

Labor Costs

Labor costs are of course high in New York, but also in many of the other cities on my list. The best comparable sources I can find for income in the US and Europe cite income from work (or total income net of rent and interest): see here for US data and look under “net earnings,” and here for EU data. Ile-de-France is about as rich as metro New York, and London and Stockholm are only slightly poorer, all after PPP adjustment.

Moreover, within countries, there’s no obvious relationship between income and construction costs. The US is somewhat of an exception – Los Angeles appears to have the cheapest subways, and is also the poorest of the major cities – but elsewhere, this effect is muted or even reversed. The factor-of-2 difference in income between Lombardy and Campania has not led to any construction cost difference between Milan and Naples. In France, a comparative analysis of tramway costs, showing some but not all lines, fails to find significant differences between Paris and many provincial cities, with far lower regional incomes; moreover, this list omits Lyon, the richest provincial city, where the line for which I can find reliable cost data would be squarely in the middle of the national list in cost per km.

Finally, between countries, the correlation between construction cost and wealth seems weak when one excludes the US. My analysis of this is a subjective impression from looking at many case studies; David Schleicher and Tracy Gordon, formally analyzing a dataset with a large overlap with mine, find a positive but weak correlation. PPP-adjusted costs tend to be much more consistent across countries of varying income levels than GDP-adjusted costs; the latter statistic would exhibit a vast gap between the construction costs of much of Europe and those of high-cost poor countries like India and Bangladesh, the former statistic would show them to be not too different.

What is true is that New York specifically seems to have labor regulations that reduce productivity. Little of this is in citable, reputable sources, but comes from quotes given to me from people involved in the industry. One example given by Michael Horodniceanu, president of MTA Capital Construction, is of a certain task involving tunnel-boring machines, which is done by 9 people in Madrid and 24 in New York. However, there’s a chasm between the claim that the US is more expensive because it pays first-world wages and the claim that there are specific labor regulations in the US in general or New York in particular that raise construction costs. The latter claim is if anything optimistic, since it suggests it is possible to improve labor productivity with rule changes and automation.

Land Costs and NIMBYs

People whose only experience with major infrastructure projects outside the US is reading about China think that the US has a NIMBY-prone process, driving up land acquisition costs. Too many proponents of high-speed rail think that it should go in freeway medians to save on such costs; Hyperloop proponents even claim that the proposed system’s fully elevated nature is a plus since it reduces land footprint. The reality is the exact opposite.

In Japan, as Walter Hook explains in a Transportation Research Board paper from 1994, urban landowners enjoy strong property rights protections. This drives up the cost of construction: land acquisition is 75-80% of highway construction cost in Japan, compared with 25% in the US; for rail, both sets of numbers are lower, as it requires narrower rights-of-way than highways. In Japan, acquiring buildings for eminent domain is also quite difficult, unlike in the US. Tokyo is toward the upper end of rail construction costs outside the Anglosphere, and the smaller cities in Japan seem to be at best in the middle, whereas the Shinkansen’s construction cost seems relatively low for how much tunneling is required.

In the last twenty years, land prices have increased in the US cities that build the most subways, including New York, San Francisco, and Los Angeles. However, Second Avenue Subway had few demolitions, for ventilation rather than carving a right-of-way. New York and other North American cities benefit from having wide arterial streets to dig subways under; such streets aren’t always available in Europe and Japan.

Urban Density

Manhattan is dense. Thus one of the excuses for high construction costs is that there’s more development near under-construction subway routes than in other cities. I say excuse and not reason, because this explanation misses three key facts:

1. While New York is very dense, there exist other cities that are about equally dense. Paris has the same residential density as Manhattan, both around 26,000 people per km^2. The wards of Tokyo where infill subways are built are less dense, but not by much: Toshima, Shinjuku, and Shibuya, where the Fukutoshin Line passes, are collectively at 18,500/km^2. Athens proper has about 17,000/km^2, and most of the under-construction Line 4 is in the city proper, not the suburbs. Barcelona has 16,000/km^2. Paris, Athens, and Barcelona do not appear to have much higher construction costs than lower-density Continental cities like the cities of Germany or Scandinavia.

2. Suburban subway extensions in the US are quite expensive as well. The projected cost of BART to San Jose is around $500 million per underground km; Boston’s Green Line Extension, in a trench next to a mainline railroad, is currently around $400 million, so expensive it was mistakenly classified as a subway in a Spanish analysis (PDF p. 34) even before the latest cost overrun; Washington’s Silver Line, predominantly in a suburban freeway median, with little tunneling, is around $180 million per km. It is to be expected that a suburban subway, let alone a suburban light rail line, should be cheaper than city-center infill; what is not to be expected is that an American suburban light rail line should cost more than most infill subways in Europe.

3. Density by itself does not raise construction costs, except through its effects on the built form and on land costs. Land costs, as described in the previous section, are not a major factor in US construction costs. Built form is, but Second Avenue Subway passes under a wide arterial street, limiting not only takings but also the quantity of older infrastructure to cross. Tunnels that cross under entire older subway networks, such as Tokyo’s Fukutoshin and Oedo Lines, Paris Metro Line 14 and the extension of the RER E to the west, Barcelona Lines 9 and 10, and London’s Crossrail and Jubilee Line Extension, naturally have higher construction costs; in some cases, it required careful design to thread these lines between older tunnels, with only a few centimeters’ worth of clearance. The 7 extension has no more difficult construction than those lines, and Second Avenue Subway is if anything easier. Even the future phase 3, crossing many east-west subways in Midtown, mostly involves overcrossings, as those east-west subways are quite deep at Second Avenue to go under the East River.

General Construction Difficulties

People who defend New York’s high construction costs as reasonable or necessary like to point out geological difficulties; I recall seeing a few years ago a reference to an archeological site in Harlem as evidence that New York has unique difficulties. As with the other excuses, these problems are far less unique than New Yorkers think, and in this case, New York is actually much easier than certain other cases.

The point here is that the presence of urban archeology is indeed a massive cost raiser. In cities with significant preindustrial cores, lines passing through old sites have had to be built delicately to avoid destroying artifacts. For examples, consider Marmaray in Istanbul, Rome Metro Line C, and multiple lines in Athens and Mexico City. While Turkish construction costs are generally low, Marmaray was about $400 million per km, and a project manager overseeing construction said, “I can’t think of any challenge this project lacks.” Rome Metro Line C has been plagued with delays and is around twice as expensive per km as recent lines in Milan and Naples. In Paris, Metro 14 ran into medieval mines at its southern extremity during construction, leading to a cave-in at a kindergarten; a suburban extension of Metro 4 required some work on the mines as well.

Such artifacts exist in New York, but generally only at its southern end, which was settled first. The Upper East Side urbanized in the late 19th century. It does not have the layers of fragile artifacts that cities that were already large in the Middle Ages were, let alone cities from Antiquity like Rome and Byzantium.

Against this, there is the real fact that Manhattan’s rock is schist, which is hard to tunnel through since its quality is inconsistent (see e.g. brief explanation in a New York Times article from 2012). The rock itself is not too different from the granite and gneiss of Stockholm, but is at times more brittle, requiring more reinforcement; contrary to what appears to be popular belief, the problem isn’t that schist is hard (gneiss is even harder), but that it is at times brittle. That said, by the standards of medieval Parisian mines and Roman ruins, this does not seem like an unusual imposition. What’s more, phase 2 of Second Avenue Subway appears to be in Inwood marble rather than Manhattan schist, and yet the projected construction costs per km appear to be even higher; the rumors I have seen on social media peg it at $5 billion for about 2.7 km, of which about 1 km preexists.

There is Always an Excuse

The sharp-eyed reader will notice that with the possible exception of Paris Metro 14, the projects I am positively comparing to American subways are only discussed in one or two of the four above items – labor costs, land costs, density, and geology and archeology. It’s always possible to excuse a particular high-cost line by finding some item on which it differs from other lines. There aren’t a lot of subway lines under construction in the world right now, complicating any attempt at a large-N study. David Schleicher and Tracy Gordon have looked at a few possible correlates, including GDP per capita, corruption perception, and whether the country uses English common law, but there aren’t enough datapoints for a robust multivariate analysis, only for univariate analyses one correlate at a time.

Were the cost difference smaller, I might even be inclined to believe these excuses. Perhaps New York really does have a unique combination of high density, high wages, difficult rock, and so on. If Second Avenue Subway cost $500 million per km, and if above-ground rail lines elsewhere in the US cost like above-ground rail lines in the rest of the developed world, I would at most hesitantly suggest that there might be a problem in forums with plenty of experts who could give plausible explanations. But the actual cost of subways in New York is $1.5 billion per km, and proposed future lines go even higher; meanwhile, multiple at-grade and elevated US lines cost 5-10 times as high as European counterparts. That New York specifically has a factor-of-10 difference with cities that share most of its construction difficulties suggests that there really is a large problem of waste.

New Yorkers tend to think that New York is special. This is not true of the denizens of every city, though London and Paris both seem to share New York’s pathology. The result is that many New Yorkers tend to discount such cross-city comparisons; who am I to put New York on the same list as lesser cities like Stockholm and Barcelona? I was affected by this mentality enough to begin my comparisons with the few cities New York could not denigrate so well. But with further investigation of what makes some subway tunnels more difficult than others, we can dispense with this chauvinism and directly discuss commonalities and differences between various cities. That is, those of us who care about good transit can have this discussion; the rest can keep their excuses.

The Northern Branch Extension is a Waste

As I mentioned in yesterday’s post, negotiations in New Jersey between Governor Chris Christie and the state legislature have resulted in a significant increase in the state fuel tax. The money will raise $16 billion for funding the eight-year Transportation Trust Fund plan, and be matched with federal funds to bring the amount up to $32 billion. Unfortunately, the money is being wasted. Details of most of the plan remain vague, but it appears most of the money will go to road repair; for all I know, $4 billion a year is a reasonable amount for this. But one component of the plan is extension of the Hudson-Bergen Light Rail system north into Bergen County, along the Northern Branch. This is at best a marginal project, and in the long run would make regional rail modernization in Northern New Jersey more difficult.

Despite its name, the HBLR only operates in Hudson County. Plans for extension into Bergen County along the Northern Branch still play an outsized political role due to the name of the line, but have not been realized yet. Right now, the line is partly the light rail system of Jersey City, and partly a circumferential line linking dense areas west of the Hudson, as somewhat of a circumferential. As such, it is a combination of a radial and circumferential. The Northern Branch would send it 13 km farther north into suburbia, terminating in Englewood, a town center with a fraction of the job density of the Jersey City CBD. Projected weekday ridership is 21,000, a little more than 1,500 per km, weak for an urban light rail line. (The HBLR’s existing ridership is 54,000 per weekday on 55 km of route.)

The original cost estimate of the Northern Branch extension was $150 million, low for the length of the line. While reactivating a closed commuter rail like the Northern Branch should be cheaper, the line is single-track still hosts some freight service, so light rail would have to build new tracks in the same right-of-way, raising the cost range to that of urban light rail. Unfortunately, the cost rapidly escalated: by 2009 it was up to $800-900 million, and in 2015, after the proposal was shortened to its current length from an 18 km proposal going deeper into the Bergen County suburbs, the cost was up to $1 billion. The cost per rider is still much better than that of the Gateway Tunnel, but it makes the project marginal at best.

While the high cost may be surprising, at least to the reader who is unused to the expense of building in or near New York, the limited ridership is not. The original plan, going beyond Englewood, would have terminated the line in Tenafly, a wealthy suburb where my advisor at Columbia used to live. Many people in Tenafly objected to that plan, not so much on the usual NIMBY grounds of traffic and noise as on the grounds that the line would not be of much use to them. They were interested in taking public transit to go to Manhattan, and the HBLR system would not be of any use. Of course, Columbia professors would not be using a rail network that went directly to Midtown or Lower Manhattan, but most of the suburb’s Manhattan-bound residents work in the CBD and not at Columbia.

I would probably not be this adamantly against the Northern Branch project if it were just one more over-budget light rail line at $45,000 per projected rider. The US has no shortage of these. Rather, it’s the long-term effect on regional rail.

The Northern Branch would make a good commuter rail line, going from Pavonia (or possibly Hoboken) north to Nyack, connecting to the HBLR at its present-day northern terminus, with about the same stop spacing as the proposed HBLR extension. Potentially it could even get a loop similar to the proposed Secaucus loop of the Gateway project allowing it to enter Penn Station directly. An even better connection would involve a second tunnel between Pavonia, Lower Manhattan, and Atlantic Terminal on the LIRR, with a new transfer station at the junction of the Northern Branch and the Northeast Corridor. Consult this map, depicting the inner segments of various potential commuter lines: the Northern Branch is the easternmost yellow line, the Northeast Corridor is in red and green.

The importance of the Northern Branch for regional rail is threefold. First, the easternmost line in North Jersey today, the Pascack Valley Line, misses a large swath of territory farther east, which is covered by the Northern Branch and by the West Shore Line. The West Shore Line actually passes through somewhat denser suburbs, with more Manhattan-bound commuters, but is a major freight route, whereas the Northern Branch has little freight traffic, which can be scheduled around passenger trains or even kicked out. Second, again shared with the West Shore Line, the Northern Branch provides a north-south line in Hudson County west of Bergen Hill, where there is suitable land for transit-oriented development. And third, the terminus, Nyack, is a town center with a walkable core.

I wouldn’t really object to making the Northern Branch light rail if it were cheap. At the original cost estimate of $150 million, I would be mildly annoyed by the lack of long-term thinking, but I’d also recognize that the cost per rider was low, and at worst the state would have to redo a $150 million project. At $1 billion, the calculus changes considerably; it’s a significant fraction of what a tunnel under the Hudson should cost (though not what it does cost given the extreme amount of scope creep).

High costs, as I said in 2011, should not be an excuse to downgrade transit projects to a cheaper, less useful category (such as from a subway to light rail). In this case we see the opposite happen: high costs are a reason to reject a downgraded project, since the cost per rider is no longer low enough to justify shrugging off the long-term effect on regional rail restoration.

Why Costs Matter

Stockholm is currently expanding its transit system, with about 19 kilometers of subway extension, and another 6 kilometers of a commuter rail tunnel taking regional traffic off the at-capacity mainline. The subway extension, excluding rolling stock acquisition, costs about $2.1 billion, and the commuter rail extension $1.8 billion.

The US is currently building five subways: Second Avenue Subway Phase 1 (2.8 km, $4.6 billion), East Side Access (2.2 km, $10 billion), the first phase of the Wilshire subway (6.3 km, $2.8 billion), the Regional Connector (3.1 km, $1.4 billion), U-Link (5 km, $1.8 billion). Two more projects are partially underground: the Crenshaw/LAX Line, a total of 13.7 km of which 4.7 are underground, at a total cost of $2.1 billion, and the Warm Springs BART extension, a total of 8.6 km of which 1.6 are underground, at a total cost of $900 million. (Update 2/1: the Central Subway is $1.6 billion for 2.8 km. Thanks to Joel for pointing out that I forgot about it.)

The first observation is that Sweden has just 700 meters 3.5 km of subway under construction less than the US under construction, despite a vast gap in not only population but also current transit usage. Stockholm may have twice the per capita rail ridership of New York, but it’s still a small city, the size of Indianapolis, Baltimore, Portland, or Charlotte; 450 million annual rail trips is impressive for a city of its size, but the US combined has more than 3 billion. This relates to differences in costs: the amount of money Sweden is putting into heavy rail infrastructure is $3.9 billion, vs. $23.6 billion $25.2 billion among the seven eight US projects, which approaches the ratio of national subway and commuter rail ridership levels.

The second observation is that the US spending is not really proportional to current rail ridership. Two thirds of the spending is in New York, as is two thirds of US rail ridership, but nearly everything else is in Los Angeles, which takes in a majority of current subway construction route-length. Los Angeles is a progressive city and wants better public transit, but the same is true in many of the six major US transit cities – New York, Washington, San Francisco, Chicago, Boston, and Philadelphia. And yet, of those six, only New York and San Francisco are building urban subways (BART’s one mile of tunnel is in a suburb, under a park).

The difference is that Los Angeles builds subways at $400-450 million per km in the city core (less in future phases of the Wilshire subway), whereas in most of the US, lines are either more expensive or more peripheral. Boston, the Bay Area, and Washington are expanding their rapid transit networks, but largely above-ground or in a trench, and only outside the core. Boston’s Green Line Extension is in a trench, but has had major budget overruns and is currently on the high side for a full subway ($3 billion for 6.9 km), and the MBTA is even putting canceling the project on the table due to the cost. Washington’s Silver Line Phase 2 is 18.5 km and $2.7 billion, in a highway median through the Northern Virginia suburbs. BART’s Warm Springs extension is about $100 million per km, which is not outrageously high, but the next extension of the line south, to Berryessa, is $2.3 billion for 16 km, all above ground.

Let us now stay on the North American West Coast, but go north, to Vancouver. Vancouver’s construction costs are reasonable: the cost projections for the Broadway subway (C$2.7 billion ex-vehicles, PDF-p. 95) are acceptable relative to route-length (12.4 km, PDF-p. 62) and very good relative to projected ridership (320,000 per weekday, PDF-p. 168). Judging by the costs of the Evergreen and Canada Lines, and the ridership evolution of the Canada Line, these projections seem realistic. And yet, in a May 2015 referendum about funding half the line as well as many other transit projects, 62% of the region’s voters, including a bare majority in Vancouver proper, voted no.

The referendum’s result was not a shock. In the few months before the vote, the polls predicted a large, growing no vote. Already in February, the Tyee was already comparing Vancouver negatively with Stockholm, and noting that TransLink’s regional governance structure was unusual, saying the referendum was designed to fail. This is not 100% accurate: in 2014, polls were giving the yes side a majority. The deterioration began around the end of 2014 or beginning of 2015: from 52-39 in December to 46-42 in January, to 27-61 in March. The top reason cited by no voters was that they didn’t trust TransLink to spend the money well.

This cannot be divorced from Vancouver’s Compass Card debacle: plans to replace paper tickets and SkyTrain’s proof-of-payment system with a regionwide smartcard, called Compass, and faregates on SkyTrain, were delayed and run over budget. The faregates aren’t even saving money, since TransLink has to pay an operating fee to vendor Cubic that’s higher than the estimated savings from reduced fare evasion. The height of the scandal was in 2014, but it exploded in early 2015, when TransLink replaced its manager amidst growing criticism. The referendum would probably have been a success a year earlier; it was scheduled in what turned out to be a bad period for TransLink.

The importance of the Vancouver example is that construction costs are not everything. Transit agencies need to get a lot of things right, and in some cases, the effects are quite random. (Los Angeles, too, had a difficult rollout of a Cubic-run faregate system.) The three key principles here are, then:

1. Absolute costs matter. They may not directly affect people’s perceptions of whether construction is too expensive. But when legislators have to find money for a new public transit project, they have some intuitive idea of its benefits, give or take a factor of perhaps 2. Gateway is being funded, even though with the latest cost overrun (to $23.9 billion) the benefit-cost ratio in my estimation is about 1/3, but this involved extensive lobbying by Amtrak, lying both to Congress and to itself that it is a necessary component of high-speed rail. Ordinary subways do not have the luxury of benefiting from agency imperialism the way the Gateway project did; if they’re too expensive, they’re at risk of cancellation.

2. Averaged across cities and a number of years of construction, cities and countries with lower construction costs will build more public transit. We see this in the US vs. Sweden. Of course, there are periods of more construction, such as now, and periods of less, such as around 2000, but this affects both countries right now.

3. Variations from the average are often about other issues of competence – in Vancouver’s case, the failure of the faregates and the delayed Compass rollout. Political causes are less important: Vancouver’s business community opposed the transit referendum and organized against it, but it’s telling that it did so and succeeded, whereas business communities in cities with more popular transit authorities support additional construction.

In a post from 2011, Yonah Freemark argued that California HSR’s projected cost’s upper end was just 0.18% of the projected GDP of California over a 20-year construction period. The implication: the cost of high-speed rail (and public transit in general) is small relative to the ability of the economy to pay. This must be paired with the sobering observation that the benefits of public transit are similarly small, or at most of the same order of magnitude.

New York’s survived decades without Second Avenue Subway. It’s a good project to have, provided the costs are commensurate with the benefits, but without cost containment, phase 2 is probably too expensive, and phases 3 and 4 almost certainly. What’s more, the people funding such projects – the politicians, the voters, even the community organizations – consider them nice-to-haves. The US has no formal mechanism of estimating benefit-cost ratios, and a lot of local political dysfunction, and this can distort the funding, to the point that Gateway is being funded even though at this cost it shouldn’t. But, first, even a factor of 3 distortion is unusual, and second, on average, these distortions cancel out. Democrats and Republicans shouldn’t plan on controlling either Congress or the White House more than about half the time, in the long run, and transit activists shouldn’t plan on political dysfunction persistently working in their favor.

The only route forward is to improve the benefit-cost ratio. On the benefit side, this means aggressive upzoning around subway stations, probably the biggest lacuna in Los Angeles’s transit construction program. But in New York, and even in the next five transit cities in the US, this is not the main problem: population density on many corridors is sufficient by the standards of such European transit cities as Stockholm, Berlin, London, and Munich, none of which is extraordinarily dense like Paris.

No: the main problem in most big US cities is costs, and almost only costs. Operating costs, to some extent, but mainly capital construction costs. Congress and the affected states apparently have enough political will to build a 5-km tunnel for $20 billion going on $24 billion; if this system could be built for $15 billion, they’d jump at the opportunity to take credit. The US already has the will to spend reasonable amounts of money on public transit. The difference is that its $24 billion $25 billion of spending on subways buys 26 km 28.5 km of subway and 16 km of a mix of light rail and el, where it could be buying 120 km 125 km of subway. Work out where you’d build the extra 94 km 96.5 km and ask yourself if ignoring costs is such a good idea for transit activists.

Hyperloop Costs

Two years ago, when Elon Musk first proposed Hyperloop as a faster, cheaper, and more entrepreneurial alternative to California High-Speed Rail, I explained in depth what was wrong with the proposal. The curve radii were too tight for passenger comfort, and any attempt to fix them would require more expensive civil infrastructure. In general, the cost estimates in the plan were laughably low. Musk has moved on, but another team has been trying to build the system. It is planning to build a test track in the next three years, a distance of 8 km, for $150 million.

Let us analyze these costs. The per-km cost of this scheme is about $19 million, which if costs don’t run over is reasonable for HSR flat terrain, if anything a bit low. California HSR’s Central Valley segments, in more urbanized areas, are about $24-27 million/km, ex-electrification and systems (which don’t add much). This, in principle, suggests the system could be built for about the same cost as conventional HSR. Of course, it’s already far more expensive than Musk’s original estimate of $6 billion for about 650 km (including tunnels), but it still sounds like a good deal – in theory.

In practice, I’d like to go back to my often-quoted sentence in my post from two years ago, that Hyperloop would be a barf ride. The plan is to run capsules at their full speed, but only when empty. Tests with passengers would be restricted to 160 mph, or about 260 km/h. If the picture in the article describing the test track is accurate, the turn looks like its radius is perhaps 800 meters. Passengers can’t ride through this at very high speed. Even at 260 km/h, it requires full canting, and will make passengers feel noticeable extra gravitational push, about 0.2 g.

The importance of this is that any attempt to build tracks at higher speed will run into problems with both horizontal and vertical curves very quickly. The picture depicts sleek viaducts in empty land; imagine much taller viaducts, to allow the track to curve more gently than the terrain. Once the terrain becomes problematic, as it does on the approaches to the mountain crossings from the Central Valley to both the Los Angeles Basin and the San Francisco Bay Area, costs go up. This is true for any mode of transportation, up to and including mountain roads with hairpin turns, but the higher the speed, the larger the cost differential. In this situation, 4 km horizontal curve radii and 20 km vertical curve radii (about absolute minimum for conventional HSR) are expensive; 20 km horizontal curves and 230 km vertical curves are far more so. And within the urban areas, the inability of the system to leverage legacy rail tracks forces expensive urban viaducts.

When There’s Nothing Left To Burn, You Have To Set Money On Fire

Two recent news items have driven home the point that American construction costs are out of control. The first is the agreement between the federal government and the states of New York and New Jersey to fund the Gateway project, at a cost of $20 billion. The second is the release of more detailed environmental impact studies for high-speed rail on the Northeast Corridor; I previously expressed tepidly positive sentiment toward the NEC Future concept, but now there are concrete cost projections: the only full HSR option, Alternative 3, is projected to cost $290 billion. As Stephen Smith noted on Twitter, Alternative 3 is twice as expensive per km as the mostly underground Chuo Shinkansen maglev. As such, I am going to ignore other issues in this post, such as whether to serve Hartford on the mainline or not: they are real issues, but are secondary concerns to the outrageous cost figures.

Although both Gateway and NEC Future have extreme costs – too high for me to be able to support either project – the causes of those high costs are different. Gateway includes not just a new tunnel across the Hudson but also substantial unnecessary scope in Penn Station South; however, I suspect that even if the scope is pared down to the minimum required to provide four tracks from Newark to New York, the budget would still be very high. The bare Gateway tunnel (including Penn South) is to my understanding $14-16 billion; the maximum cost that can be justified by the extra ridership, unless additional operating improvements (which can be done today) are in place, is about $7 billion. As with Second Avenue Subway, there is a real problem of high unit costs. I emphasize that there is too much scope in Gateway, but the scope alone cannot explain why 5 km of tunnel cost many billions, when expensive non-US projects such as Crossrail top at a billion dollars per km and the geologically more complex Marmaray tunnel cost (in PPP terms) about $400 million per km.

The situation with NEC Future is different, in two ways. First, if Gateway cuts a zero from the budget, I will consider it a solid project, perhaps even an inexpensive one given the wide river crossing. (For reference, in 2003 the projected cost was $3 billion). In contrast, if NEC Future cuts a zero from its budget, I will still consider it too expensive – perhaps worth it because of the benefits of HSR, but certainly too high to be built without further inquiry. $29 billion for 720 km is justified for a line with a fair amount of tunneling and entirely greenfield construction, whereas the NEC has long segments that are already nearly ready for HSR and requires very little tunneling.

But second, and more importantly, NEC Future’s unit costs are not high. Read appendix B.06, which discusses cost: on PDF-p. 28 it breaks down cost by item, and other than the tunnels, which at $400-500 million per km are several times as expensive as intercity rail tunnels usually are, the infrastructure items’ per-km costs are reasonable. And the NEC doesn’t require much tunneling in the first place: Connecticut may be hilly, but HSR can climb 3.5% grades and ride on top of the hills, and only in Bridgeport is tunneling really necessary. Make it perhaps 5 km of required tunneling, all around Bridgeport. When I said $10 billion would build full-fat HSR on the NEC, I assumed $200-250 million per km for the Bridgeport tunnel. I also assumed $750 million for new tunnels in Baltimore, whose cost has since risen to $4 billion in part due to extra scope (4 tracks rather than 2). So 2 extra billions come from more expensive tunneling, and 278 extra billions come from bloated scope. Perhaps a subset of the 278 comes from high unit costs for systems and electrification, but these are not the main cost drivers, and are also quite easy to copy from peer developed countries. In the rest of this post, I will document some of the unnecessary scope. I emphasize that while Alternative 3 is the worst, the cost projection for Alternative 1, at $50 billion, is still several times the defensible cost of improvements.

Let us turn to chapter 4, the alternatives analysis, and start on PDF-p. 54. Right away, we see the following wasteful scope in Alternative 2:

  • Full four-tracking on the Providence Line, instead of strategic overtakes as detailed here.
  • A bypass of the Canton Viaduct, which at a radius of 1,746 meters imposes only a mild speed restriction on trains with E5 and Talgo tilt capability, 237 km/h.
  • An entirely new tunnel from Penn Station to Sunnyside, adding a third East River tunnel even though the LIRR is not at capacity now, let alone after East Side Access opens.
  • A tunnel under Philadelphia, so as to serve the city at Market East rather than 30th Street Station.
  • Two new HSR-dedicated tracks in New Jersey parallel to the NEC, rather than scheduling commuter trains on existing local tracks as detailed here.
  • Two new HSR-dedicated tracks alongside much of the New Haven Line, even in areas where the existing alignment is too too curvy.
  • Extensive tunneling between New Haven and Providence (see PDF-pp. 69-70 and 75), even in Alternative 1, even though HSR trains can climb the grades on the terrain without any tunnels outside the Providence built-up area if the tracks go west.

Alternative 2 also assumes service connecting New Haven, Hartford, and Providence, which I do not think is the optimal alignment (it’s slightly more expensive and slower), but is defensible, unlike the long proposed tunnels under Philadelphia, totaling around 30 km. The overall concept is also far more defensible than the tunnel-heavy implementation.

Alternative 3 adds the following unnecessary scope (see PDF-pp. 58 and 76-83):

  • Full six-tracking between New York and Philadelphia and between Baltimore and Washington.
  • Tunnel-heavy alignment options bypassing the New Haven Line, including inland options via Danbury or a tunnel across the Long Island Sound.
  • The new Baltimore tunnels are longer and include a new Baltimore CBD station, where the existing station is at the CBD’s periphery.
  • If I understand correctly, new platforms at New York Penn Station under the existing station.
  • Tunnels under the built-up area of Boston.

According to the cost breakdown, at-grade track costs $20 million per km, embankments cost $25 million per km, elevated track costs about $80 million per km, and tunnels cost $400 million per km. When I draw my preferred alignments, I assume the same cost elements, except tunnels are cheaper, at $200 million per km. (I also add 20% for overheads on top of these base costs, whereas these documents add contingency on top of that.) This should bias the NEC Future toward above-ground options.

Instead, look at the maps in appendix A. Alternative 3 is PDF-pp. 76-81. The options for getting out of the New York urban area include an almost entirely tunneled inland alignment, and a tunnel under the Long Island Sound; making small compromises on trip time by using the New Haven Line, and making up time elsewhere by using better rolling stock, is simply not an option to the planners.

Let’s go back to Gateway now. Although the cost premium there is not as outrageous as for NEC Future, it is a good case study in what the US will fund when it thinks the project is necessary and when there is sufficient lobbying. Paris has the political will to spend about $35 billion on Grand Paris Express, and London is spending $22 billion on Crossrail and is planning to spend much more on Crossrail 2. Between Second Avenue Subway, the 7 Extension, Fulton Street Transit Center, the PATH terminal, East Side Access, and now Gateway, New York is planning to have spent $43 billion on public transit by the middle of next decade. And now people are talking about Second Avenue Subway Phase 2. The political will to build both rapid transit and HSR in the US exists; the government spends tens of billions on it. But due to poor cost effectiveness, what the US gets for its money is almost nothing.

The $20 billion that the federal government and both states are willing to set on fire for Gateway prove that, were there a plan to build HSR so that trains would go between Boston and Washington in three and a half hours on a budget of $10-15 billion, it would be funded. This is not a marginal case, where the best plan still elicits groans from anti-tax conservatives: those conservatives ride trains between New York and Washington and want them to be faster. Instead, it is purely about excessive costs. Gateway’s $20 billion could build the tunnel and also full HSR on the NEC, and the $290 billion that NEC Future wants to burn on HSR could build nearly a complete national HSR network, serving most metro areas above 1 million people. It’s no longer a question of political will; it’s purely a question of cost control. 95% cost savings are possible here, and this is the only thing advocates for better intercity rail in the US should be focusing on.

Amtrak Pays More Than Double for High-Speed Trains

Update 2016/8/16: the deal is on, per sources at Amtrak; the cost is $2.5 billion, as reported originally.

Update 9/24: as Alex Block notes in comments, sources at Amtrak deny the story, saying that Schumer spoke too soon, and there are still two bidders and Amtrak has not yet made its choice. If the cost turns out to be $1-1.25 billion rather than $2.5 billion, I will withdraw any and all criticism of the procurement process.

A press release from Senator Charles Schumer’s office is abuzz: Amtrak chose Alstom’s bid for its next order of high-speed trainsets, the Next-Generation Acelas. The press release mentions the size of the contract, $2.5 billion, and the number of jobs it would create, 750; it did not include any information relevant to passengers, such as the number of trains, the expected schedule of delivery, the expected frequency, and the expected travel time. Various media outlets have reprinted Schumer’s press release without such additional information, or indeed any analysis. Let me rectify this and provide some background as to why this order is a fleece.

The order is for 28 trainsets with 425 seats each. This can be seen here and here. Of those 28 sets, 25 should be available for maximum service, well below the 98% peak availability achieved by the TGV, but an improvement over the Acela’s current 16 trains available out of 20. There is no mention of the number of cars, which is how orders are usually priced. However, on page 30 of the technical specs, it is mentioned that the maximum length is 200 meters, equivalent to 8 cars. The capacity is equivalent to about six cars’ worth of seating at the normal seat density of economy-class HSR (including the Amtrak Regional coach), or about seven cars’ worth averaged over all occupied Acela cars. The RFP mentions half a bistro car with an option for a full car (page 21 of instructions to offerors), so eight cars per train is a reasonable assumption. I have seen references to ten cars per set, which I believe come from the option for two additional cars per train (the instructions phrase this as “an extra 33.33% capacity”). From Schumer’s press release it’s difficult to know whether the $2.5 billion figure is the base order or also the option.

Eight cars per train times 28 trains equals 224 cars. $2.5 billion divided by 224 equals $11.2 million per car; if I am wrong and these are ten-car trains, then it is $8.9 million per car. In China, a very high-speed train, capable of 350-380 km/h, costs $4 million per car; this is $900 million at the size of Amtrak’s order. In Europe, the new Eurostar order cost a total of €600-700 million for ten 16-car Velaro trainsets, about $4.7-5.5 million per car in PPP terms (see here and here); the uncertainty comes from euro:pound conversion rates and from the fact that a portion of the order is for refurbishment of the older trainsets. Siemens also sold 8-car Velaros to Deutsche Bahn for $5.2 million per car, again in PPP terms. Japanese trains are even cheaper, about $3 million per car in a recent N700 order, but only last 20 years, whereas European HSR trainsets last 40 and Amtrak specified a 30-year shelf life. The only non-US trainset order that I’ve seen that approaches the $10 million per car mark is the Velaro RUS, which is €600 million for eight 10-car trains, and this includes substantial modifications, such as winterization.

There is no excuse for such high costs. The technical specs are not particularly innovative: on page 22 of the document linked above, it is mentioned that cant deficiency should be 127 mm if the trains don’t tilt and 229 if they do, both of which figures are unimpressive by the respective standards of non-tilting and tilting trains. There is no explicit requirement for tilt. There is a requirement that trains be capable of traveling between New York and Washington in 2:21 (current trip time is 2:48) and between New Haven and Boston in 1:51 (current trip time is about 2 hours, skipping New London, which the specs require trains to stop at); there is no mention of which track upgrades are forthcoming, but given Amtrak’s heavy schedule padding, it is not difficult for a good train to meet the requirements. I do not bring these specs up to attack Amtrak for not demanding more of the trains, but to note that what Amtrak is asking is standard, so there is no reason for trains to be unusually expensive.

I will note that due to Buy America provisions, the trains will be manufactured in the US, at Alstom’s factory in Hornell. This has not caused cost blowouts for the large orders made by the New York subway, the LIRR, and Metro-North, but perhaps this order is small enough that requiring Alstom to build it at a new factory leads to major cost increases. It is also possible that due to difficulties in the bidding process, there are fewer bidders than is normal – Bombardier dropped out of the process last year, and in general, some US contracts have just one bid, with correspondingly elevated prices. But regardless of the reason, Amtrak’s order comes at a factor-of-two cost premium, and Schumer just expressed pride at the few hundred jobs that this waste would create.

What’s Going on with Hudson Tunnel Cost Overruns?

Twenty-five billion dollars. The New York region’s political heavyweights – Andrew Cuomo, Chris Christie, Chuck Schumer, Cory Booker, Bill de Blasio – all want new Hudson tunnels, without any state funding for them; Schumer is proposing federal funding and a new interstate agency, parallel to the existing Port Authority, and a total budget of $25 billion. This is the highest figure I have seen so far; Amtrak still says $16 billion and Cuomo says $14 billion, and it’s likely the Gateway tunnels are indeed about $16 billion, while the remainder is for associated projects, such as fully four-tracking the line from Newark to the tunnel portal, a distance of about 11 kilometers. It is not my intention to criticize the cost; I’ve done that before.

Instead, I would like to point out that each time Gateway is the news, there usually seems to be a fresh cost escalation. Is it a $10 billion project? A $14 billion project? A $16 billion project? Or a $25 billion project? And what is included exactly? Amtrak does not make it clear what the various items are and how much they cost; I have not seen a single cost estimate that attempts to establish a baseline for new Hudson tunnels without the Penn Station South component, which would provide a moderate short-term boost to capacity but is not necessary for the project. The articles I’ve seen do not explain the origin of the $25 billion figure, either; it may include the tunnel and full four-tracking of Newark-New York, or it may include additional scope, for example Amtrak’s planned vertical circulation for a future (unnecessary) deep cavern for high-speed rail (see picture here).

The main issue here, the way I see it, is the interaction between public trust and political self-aggrandizement. It is common in all aspects of Israeli governance for new ministers to announce sweeping changes and reorganizations, just to remind the country that they exist and are doing something; this generally makes it harder to implement gradual reforms, and makes it completely impossible to do anything by consensus. Implementing a plan that was developed by consensus over many years makes one a bureaucrat; leaders change everything. In the US, this is the case not everywhere in government, but at least within public transportation infrastructure.

As we see in the case of Schumer’s call for a new interstate authority, the changes a heavyweight politician makes in order to appear as a leader have nothing to do with real problems that the project may have. Solving those problems requires detailed knowledge of the project at hand, which is the domain of bureaucrats and technocrats, and not of heavyweight politicians. Even a heavyweight who understands that there is a problem may not know or care about how to fix it: for example, Christie used the expression “tunnel to Macy’s basement,” invoking the deep cavern, to explain why ARC was wasteful, but chose to cancel the project rather than to remove the cavern and restore a track connection from the tunnel to Penn Station, which was in the official ARC Alt P plan until it was cut to limit the cost overruns. Managing a project is hard, and is, again, the domain of technocrats. The heavyweight will grandstand instead, regardless of whether it means canceling the project, or proposing an entirely new layer of government to build it.

As for trust, let us look at the benefits of new Hudson tunnels. The traditional, and least objectionable, is added capacity: the existing tunnels are currently at capacity during rush hour, and there’s much more demand for rail travel from New Jersey to Manhattan than they can accommodate. We can measure this benefit in terms of the combination of increased ridership from more service from more suburban areas, reduced crowding, and possibly slightly higher speeds. As a crude estimate of this benefit, current New Jersey Transit ridership at Penn Station is 87,000 per weekday in each direction. Doubling capacity means roughly doubling ridership, which would come from a combination of induced demand and diversion of traffic from cars, Port Authority buses, and commuter rail-PATH connections. This means the new tunnel can expect about 175,000 new commuter rail trips per weekday. At $10,000 per weekday trip, which is about average for very large non-US cities’ subway extensions, this justifies $1.75 billion. At $20,000, about the same as the projection for Grand Paris Express, Crossrail, and Second Avenue Subway Phase 1, all of which are justified on grounds of ridership and capacity on parallel lines, this is $3.5 billion. At $40,000, about the same as old projections for Second Avenue Subway Phase 2, which I used to analyze de Blasio’s Utica subway proposal, this is $7 billion. A $25 billion budget corresponds to a cost per rider well into the range of airport connectors.

Now, I’d like to think that informed citizens can look at these costs and benefits. At least, the fact that public transit projects only cost as much per rider as Gateway if they’re airport connectors (thus, of especial interest to the elites) or if something very wrong happened with the ridership projections, suggests that there is, normally, a ceiling to what the political system will fund. Even at $14-16 billion, the two states involved and the federal government groaned at funding Gateway, speaking to the fact that it’s not, in fact, worth this much money. In contrast, a bigger project, with bigger benefits, would be funded enthusiastically if it cost this much – for example, California already has almost this much money for high-speed rail, counting Prop 1A funds that are yet inaccessible due to the requirement of a 50/50 match from other sources.

Against this background, we see scare stories that Gateway must be built for reasons other than capacity and ridership. The old tunnels are falling apart, and Amtrak would like to shut them down one track at the time for long-term repairs. The more mundane reality is that the tunnels have higher maintenance costs than Amtrak would like since each track can only be shut down for short periods, on weekends and at night. This is buried in technical documents that don’t give the full picture, and don’t give differential costs for continuing the present regime of weekend single-tracking versus the recommended long-term closures. The given cost for Sandy-related North River Tunnel repairs is $350 million, assuming long-term closures, and it’s unlikely the present regime is billions of dollars more expensive.

I am reminded of the Tappan Zee Bridge replacement: the existing bridge has high maintenance costs due to its age and poor state, but the net present value of the maintenance cost is $2.5 billion and that of the excess maintenance cost is less, both figures well below the replacement cost. The bridge itself is structurally sound, but in popular media it is portrayed as structurally deficient. This relates to the problem of heavyweight politicians, for the Tappan Zee Bridge replacement is Cuomo’s pet project.

More fundamentally, who can trust any claim Amtrak makes about the structural soundness of tunnels? It says a lot that, when I asked on Twitter why transportation authorities do not immediately shut down unsafe pieces of infrastructure, various commenters answered “politics,” and on one (I believe James Sinclair) suggested that Amtrak order an emergency closure of one of the Hudson tunnel tracks just to drive home the point that new tunnels are necessary. I would like to stress that this is not Amtrak or a heavyweight proposing that, but the mere fact that commenters can seriously talk about it is telling. Most of the writers and commenters on the US transit blogosphere are very progressive and hate the Republicans; I have not seen a single comment recommending that the Democrats steal elections, fudge official statistics to make the party look more successful, or arrest Republican politicians on trumped-up charges, because in the US (and other first-world democracies), this is simply not done, and everyone except conspiracy theorists recognizes it. But politicizing the process of deciding which infrastructure projects are necessary for safety purposes and which are simply service expansions is normal enough that people can propose it half-seriously.

This brings me back to the issue of what I want the politicians to do, and what I expect them to do. What I want them to do is to be honest about costs and benefits, mediate between opposing interests (including different agencies that fight turf battles), and make decisions based on the best available information. This would necessarily limit costs, since, from the point of view of a member of Congress, if they get $25 billion for a piece of infrastructure then they cannot get $25 billion for another priority of theirs. They don’t do that, not in the US, and I’ve learned not to expect any better, as have the voters. Instead of working to make $25 billion go a longer way (to put things in perspective, I expect my regional rail tunnel proposal to cost $15-20 billion, at Crossrail 2 costs), Schumer is working to make $25 billion to sound like it’s going to a bigger deal than the new Hudson tunnels actually are.

None of this is a secret. American voters have learned to expect some kind of machine-greasing and politicking, to the point of losing the ability to trust either the politicians or the agencies, even in those cases when they are right. The result is that it’s possible to stretch the truth about how necessary a piece of infrastructure is, since people would believe or disbelieve it based on prior political beliefs anyway, and there is no expectation that the politicians or public authorities making those claims will have to justify them to the public in any detail. Lying to the public becomes trivially easy in this circumstance, and thus, costs can rise indefinitely, since everyone involved can pretend the benefits will rise to match them.