Category: Construction Costs

Predictions

I have a lot of readers who come from a rationalist or Effective Altruism background, and some more who come from an economics background, and both communities put a lot of stock in the idea of correct predictions about current events. The idea is that scientists have to make testable predictions about the results of their experiments, and therefore social scientists must equally make predictions about the state of the world. It’s become relevant in the corona crisis and is also relevant to my and Eric Goldwyn’s construction cost project in a specific way, so I’d like to talk about the complexities of what it exactly means to get things right.

Recession

Consider the following prediction: the economy is overheated and a recession will come soon. It’s a vague prediction. One can fill in details to make it strictly testable – “the German economy will have >6% unemployment in 2 years” – but what exactly is the point of one detail or another?

The real answer is that different classes of people have different uses for the prediction of recession, and therefore depend on different details. The investor wants to sell stocks near the peak. The Nasdaq went from 2,200 at the beginning of 1999 to a peak of 5,100. To the investor, knowing that there was a bubble at the beginning of 1999 would not have been useful – cashing out then would have meant missing on a stock market doubling over the year. It would take until about the onset of the 2001 recession for the Nasdaq to fall below January 1999 levels. To the successful investor, it is critical to know the exact timing of the peak to maximize income, and in pursuit of that goal it’s fine to miss some recessions, let alone to miss other important details like the length of the recession and the unemployment rate.

In contrast with the investor, the skilled worker has different concerns, like unemployment. In that environment, knowing that there’s going to be a recession is useful even if the timing is vague – such a worker can save more money, delay major purchases, avoid quitting a stable salaried job to start a small business, and maybe shift to a more recession-proof job even if it means taking a pay cut. Knowing how deep the recession will be is important as well, and remains important knowledge even as the recession takes place – the worker needs to know how stressed to be about savings running out if there is prolonged unemployment. All of this is equally valuable to the prospective immigrant who needs to make a decision on whether to emigrate.

The investor-worker duality is especially important for economists, and to some extent to rationalists who try to follow popular economists. They have money to invest, and often work as advisors to finance firms that pay them for investor-relevant information. But they are also researchers, who can respond to an impending recession by acquiring recession-relevant skills, like studying the history of depressions and conducting empirical research about unemployment and anti-poverty interventions. These are such big research programs that the exact timing of the recession doesn’t really matter, whereas its depth and length matter. An economist who can answer questions like “what is the impact of unemployment programs on long-term welfare?” is useful in a general period of economic weakness even if the papers appear a year into the beginning of the recession.

Predictions and construction costs

Before we started our current project, I had been writing about construction costs here, in comments, and on social media going back to 2009-10. I had some theories over the years, of which some would be confirmed by additional data and others wouldn’t:

  • The theory that common law leads to higher costs, based on high costs across the US, Singapore, the UK, Australia, Canada, India, and Bangladesh. I no longer believe this theory holds up; in the developed world, important edge cases disagree with the theory, including Quebec (expensive) and Israel (about average), and moreover Canadian and Singaporean costs only exploded in the last 15 years.
  • The theory that costs are consistent across projects in the same country, especially the same city; I’m pretty sure I brought it up even in the early 2010s, when I was saying Chinese costs seemed pretty average to me, but the starkest formulation is from 2019. This has subsequently been confirmed when thanks to Yinan Yao our knowledge of Chinese costs grew from two lines in Shanghai to more than 5,000 kilometers’ worth of lines across all major Chinese cities.
  • The theory that costs in developing countries are higher in ex-colonies than in never-colonized countries (like China and Iran) and distantly-colonized ones (like all of Latin America). As stated, there are counterexamples: I will report on our ongoing research into Arab construction costs, thanks to Anan Maalouf, but so far this is indicating that costs in never-colonized Saudi Arabia are pretty high. Call it half a correct prediction because Saudi Arabia is atypical enough I would not lump it a priori with China, Turkey, Mexico, or Iran.

With all that said, I am not too worried if my theories aren’t all confirmed by finding additional data. The reason is that this is not an experimental science but an observational one with a small, finite amount of data, so it’s much more important to have coherent mechanisms that can lead to actionable changes than to be able to predict every country’s construction costs from partial data.

In this case, the mechanisms posited in the 1.5 theories that do not stand up to additional data seem useful. The colonial theory is that high cultural cringe levels and weak state capacity lead ex-colonies to privatize planning to first-world (or Chinese) consultants, who use methods that are not appropriate for local conditions. On account of that explanation, I kept saying ex ante that I refused to make a prediction regarding Thailand, because it was never colonized but also has much more cultural cringe than China and uses first-world consultants; Thai costs are higher than Chinese ones but lower than ex-colonial ones. Saudi Arabia is similar – for all its bluster about rejecting Western governance norms, it craves first-world acceptance and the trappings of modernity, and extensively uses contractors from more developed countries. So the upshot regarding the importance of domestic state capacity and methods tailored for local urban geography and wages remains useful.

Likewise, the high costs across the Anglosphere remain a useful fact. Even more useful is the history of Singapore and Canada, which only aligned with British and American costs starting in the 2000s. The cost explosion in Singapore, Montreal, Toronto, and to some extent Calgary and Vancouver is a recent event, in accessible English-speaking cities; Stephen Wickens just wrote a long report about the Canadian cost explosion, which is of value in teasing out what happened. Even better, the persistent low costs in Scandinavia, Southern Europe, and South Korea provide ready-made sanity checks in knowing what to look for.

Timing issues

In one sense, I made a critical error that poses a serious threat to the project: I got the timing of the recession wrong. When applying for this grant throughout 2019, my assumption was that the American economy was overheated and would soon experience a demand-side recession, leading to stimulus – but that the contraction would be slow enough that the stimulus would come in 2021. With a jobs program announced in 2021, preliminary versions of our report would already be out, the full report with detailed case studies would be out later that year in time for agencies to request funding, and there would be enough time for agencies to implement our recommendations by the time of actual construction.

This may still happen, but the timeline is much less certain. People are talking about stimulus with infrastructure money now. I can promise a report with some actionable recommendations in 2021, but I can’t promise what costs I can promise, nor can I promise what investment to focus on. Our report centers on metro tunnels, but if there’s another push for high-speed rail then we’ll need to be able to adapt metro-based recommendations to a somewhat different context, in which high American costs may have different roots.

What’s more, based on what everyone knows in the United States, costs are so high there’s no point in planning for more. Maybe New York thinks it can finagle $40 billion in stimulus money; this can do a lot at Nordic costs, but unless New York thinks right now that this is possible, it won’t even try to plan more than a few lines like Second Avenue Subway Phase 2 and Gateway, each costing more than a full order of magnitude more than it would in Scandinavia or Southern Europe.

I am not that worried in the long run. There is ongoing investment in enough of the US for whatever we come up with to be relevant to at least some extent. And here too, a cost comparison with the cheaper parts of Europe would be instructive to many a German rail advocate or civil servant. I don’t expect to be in the situation of an investor who bet everything on a company that went bankrupt, just perhaps in that of one who missed a big stock market rally. Ultimately, don’t worry about me, worry about the virus this year and the unemployment rate of potentially the entire world in the next few years.

Construction Costs in China: Preliminary Notes

Eric and I are in the process of building up our database of construction costs and starting to select case studies for in-depth study. Most of the world was already in my original database from late 2019, but there are big gaps, most notably China, which has built more subways in the last 20 years than in my entire database combined. For this, we work with students; I mentioned Min-Jae Park in a previous post, but we have others. A Chinese master’s student of public administration at NYU named Yinan Yao is working with us on this, and has used Chinese sources, mainly official (what I call “plan” in my dataset), to construct a dataset that so far has 5,700 km, of which around two-thirds is underground.

I’m not putting the database out yet – this is still preliminary and subject to some edits, and we’ll publish a merged database of everything when it’s done (probably in the summer of this year, but don’t yell at me if it takes longer). However, I want to point out some observations that come from the data:

Chinese costs are fairly consistent: most recent subways cluster somewhat below 1 billion yuan per kilometer, or around $250 million per kilometer in PPP terms. This is consistent across the entire PRC. Costs are slightly higher in Beijing and Shenzhen than in the rest of China, and are even higher in Shanghai, where they approach 1.5 billion yuan per km. This is in accordance with what I’ve found in the rest of the world: costs are remarkably consistent within countries, especially within cities, to the point that variations, like New York’s higher-than-US-average costs or the difference between Milan and Rome, require separate explanation.

More difficult lines cost more: this is again not surprising, but it’s useful to check this on the largest national database of costs. Yinan points out that certain lines that cost more are more central, in that sense of passing under older lines with many transfer stations. See for example the Shanghai plan for 2018-23, with a map, a list of lines, and their costs (in hundreds of millions of yuan, not billions) on the last page: the highest cost per kilometer is actually a short elevated extension of Line 1, which has to be done while keeping the line’s current Xinzhuang terminal open for service as it is a critical transfer point to Line 5. The same map also shows the cost difference between the more central Lines 19 and 20 and the more suburban Airport Line, which goes around city center as the center is already connected to Pudong Airport via Line 2.

Why is Shanghai more expensive? Shanghai has a more built-out metro system than any other city in China save Beijing. That could explain its cost premium, but then again, relatively suburban lines like the Airport Line have similar costs to rest-of-China lines, including city center tunneling. Yinan suggests that the reason is geological: Shanghai is in the alluvial plain at the mouth of the Yangtze. This theory would suggest that tunneling in other parts of the world at the mouths of big rivers is expensive as well – and this is in fact true in Europe, as construction costs in the Netherlands are high. It is worth investigating, not just because of the implications for China but also for the implications for Europe: if Dutch costs are high for geological reasons, then there is nothing to explain regarding the quality of Dutch institutions, and thus if certain institutions (such as consensus democracy) occur in low-cost countries like Switzerland and the Nordic countries but also in the Netherlands, then the retort “but the Netherlands has this too and is expensive” loses impact.

There is very little regional rail in China. The definition of regional rail in a Chinese context is dicey – China did not inherit big legacy commuter rail networks, unlike India or most developed countries. Suburban rail lines are greenfield metros, rather like the Tsukuba Express or some of the more speculative parts of Grand Paris Express. In our dataset, regional rail is broken out from other urban rail because the concept of regional rail means only tunneling the hardest parts, and doing the rest on the surface using legacy railroads, which cuts overall costs but raises the costs per km of tunneling. China doesn’t do this, so all lines have the tunnel composition of a metro.

Having a lot of quantitative data makes things easier. Chinese costs are in the context of a consistent set of national institutions, and involve a lot of different subway lines. Even income differences are not so huge as to render analysis impossible – there is a lot of geographic inequality in China, but less than between (say) China and the developed world, and for the most part the bigger cities are on the richer side. This makes it easier to formulate hypotheses, for example regarding what exactly it means for a line to be more or less central. Eric, Yinan, and I are trying to come up with a coherent definition, which we can then try to test on other countries that build a lot of subways, like France, Russia, India, South Korea, and Spain.

All data is valuable. I started looking at costs in 2009-10 in order to figure out how to affordably build more subways in New York, and thus focused on the largest and richest world cities, like London and Paris. But really, all data is valuable. Comparing various developing countries is important because of issues like cultural cringe, and likewise figuring out if Shanghai is more expensive due to geology is important because of the implications regarding Dutch institutions. It is ignorant and harmful when New Yorkers reject knowledge that comes from outside their comfort zone of the city and perhaps the few rich global cities it deigns to compare itself with. On the contrary, Chinese data should be of immense value to both richer countries like the US and poorer ones like India, and likewise data from the rest of the world (for example, some Japanese and Korean best practices) should be of immense value in China.

There is a lot of knowledge out there. The point of comparative research is to access knowledge that people in one reference group (in our case, New York) do not have. Eric and I don’t speak Chinese; our language coverage, plus some non-English Google searches, is pretty useful, but far from panglossian. Yinan is so far tremendously helpful to this project. (The other students are helpful too in what they cover – they’ll get posts too, just this one focuses on China.)

Mixing and Matching

In public transportation as in many other aspects, an important fact of improvement is being able to mix-and-match things that work from different sources. It’s rare to have a situation in which exact importation of one way of doing things is the best in every circumstance (and the Covid-19 crisis appears to be one of these rare situations, Korea being the best). More commonly, different comparison cases, whether they’re companies in private-sector consulting or countries in public-sector policy research, will do different things better. Knowing how to mix-and-match is an important skill in competently learning from the best.

Non-transport examples

I put this up first, but want to emphasize that this is outside my skill set so I am less certain about the examples here than in transport; I bring them up because some of the sanity checks are cleaner here.

Secondary education: high-income Asia consistently outperforms the West in international math and science tests. However, two important caveats complicate “just be like Asia” reform ideas, like the popularity of Singapore math textbooks in some segments of the American middle class. The first is that Japan, South Korea, and Taiwan are a lot more monolingual than European countries like Germany and France, let alone smaller European countries like the Netherlands. And the second is that many things that are common to East Asia (and Singapore and Vietnam), like high social distance between hierarchs and subordinates or teachers and students, are completely absent from Finland, which is nearly the only Western country with math scores matching those of Asia. So the actual thing to learn from Asia is likely to be more technical and less about big cultural cleaves like making students wear uniforms and be more obsequious toward teachers.

Public health: whereas the Covid-19 crisis specifically still looks like a clean Asia vs. West cleave, overall public health outcomes do not. Japan has the world’s highest life expectancy, but then Mediterranean Europe follows it closely. The United States, which overall has poor health outcomes, near-ties Singapore and Sweden for lowest first-world smoking rate – and even though Singapore and Sweden both have good outcomes, they both have rather unhealthy diets by (for example) Levantine standards. Public health is a more complex issue than transportation, one that unfortunately low-life expectancy developed countries like Germany and Britain, let alone the US, aren’t meaningfully trying to learn in – and it’s not even clear how easy it is to import foreign ideas into such a complex mostly-working system, in contrast with the near-tabula rasa that is American public transportation.

Transportation in cities of different sizes

Alexander Rapp’s excellent list of metro areas ranked by what he calls frequent rapid transit ridership – that is, trains and buses that run every 20 minutes or better and are either grade separated or have absolute crossing priority with gates – showcases patterns that vary by population.

On the one hand, Tokyo is far and away the highest-ridership city in the world, even per capita. It has around 400 annual rail trips per capita. My recollection, for which I don’t really have a reliable source, is that 60% of work trips in the Tokyo region are done by rail (this data may be here but copy-paste for translation doesn’t work), a higher share than in major European capitals, which mostly top in the 40s.

On the other hand, this situation flips for smaller cities, in the 2-5 million metro population range. Sapporo appears to have maybe 120 annual trips per capita, and Fukuoka probably even less. In Korea, likewise, Seoul has high ridership per capita, though not as high as Paris, let alone Tokyo, but Busan has 100 trips per capita and Daegu 65. In contrast, Stockholm approaches 200 trips per capita (more including light rail), Vienna maybe 180 (growing to 220 with a much wider definition including trams), Hamburg 170, Prague 200 (more like 300 with trams), Munich maybe 230.

This doesn’t seem to be quite a West vs. Asia cleave. There is probably a shadow-of-giants effect in Japan leading smaller cities to use methods optimized for Tokyo; it’s visible in Britain and France, where Stockholm- and Munich-size cities like Birmingham, Manchester, and Lyon have far weaker transit systems. The US has this effect too – New York underperforms peer megacities somewhat, but smaller cities, imitating New York in many ways, are absolutely horrendous by the standards of similar-size European or East Asian cities. Nonetheless, the shadow of giants is not an immutable fact making it impossible for a Sapporo or Birmingham or Lyon to have the rail usage of a Stockholm – what is necessary is to recognize this effect and learn more from similar-size success stories than from the far larger national capital.

Construction costs and benefits

Construction costs are not a clean cleave across cultural regions. The distinction between the West and Asia is invisible: the worst country in the world is the United States, but the second worst appears to be Singapore. Excluding the English-speaking countries, there is a good mix on both sides: Korea, Spain, Italy, and the Nordic countries all have low costs, while Taiwan and the Netherlands have particularly high ones.

Moreover, countries that are good at construction are not always good at operations. As far as I can tell from deanonymizing CoMET data, Madrid has slightly higher metro operating costs than London, Paris, and Berlin, PPP$7/car-km vs. PPP$6, with generally high-construction cost Tokyo appearing to hit $5.

This is not even just costs, but also the ability to build lines that people ride. Tokyo is pretty good at that. Spain is not: the construction costs of the high-speed rail network are consistently lower than anywhere else in the world, but ridership is disappointing. There is no real integration between the AVE network and legacy trains, and there is a dazzling array of different trains each with separate fares, going up to seven incompatible categories, a far cry from the national integration one sees in Switzerland.

There is likely to be a clear answer to “who is best at optimizing construction costs, operating costs, and ridership?”: the Nordic countries. However, even there, we see one worrying issue: for one, Citybanan is expensive by the standards of the Eje Transversal (though not by those of the RER E or especially the second Munich S-Bahn tunnel), which may indicate difficulty in building the kind of multistory tunneling that bigger cities than Stockholm must contend with. Thus, while “be like Sweden” is a good guideline to costs, it is not a perfect one.

Optimizing frequency

The world leader in high-frequency public transportation is Paris. Its driverless Métro lines, M1 and M14 and soon to be M4, run a train every 85 seconds in actual service at rush hour. This is an artifact of its large size: M1 has such high ridership, especially in comparison with its length, that it needs to squeeze every last train out of the signaling system, unlike Berlin or Milan or Madrid or Stockholm. London and Moscow run at very high frequency as well for the same reason, reaching a train every 100 seconds in London and one every 92 in Moscow.

Tokyo, sadly, is not running so frequently. Its trains are packed, but limited to at best one every 120 seconds, many lines even 150, like New York. One possible explanation is that trains in Tokyo are so crowded that peak dwell times must be long, limiting throughput; long dwell times have led to reductions in RER A frequency recently. However, trains and platforms in Tokyo have good interior design for rapid boarding and alighting. Moreover, one can compare peak crowding levels in Tokyo by line with what we know is compatible with a train every 100 seconds in London, and a bunch of Tokyo subway lines aren’t more crowded than London’s worst. More likely, the issue is that Japanese signaling underperforms European systems and is the process of catching up; another aspect of signaling, automation, is also more advanced in France than in Japan (although Seoul, Taipei, and Singapore all have driverless metros).

This way, cities that are either extremely expensive to build in, like London and Moscow, or about average, like Paris, show the way forward in ways that cities that do other things better do not. It’s important to thus simultaneously learn the insights of small cities in reducing operating and construction costs and maintaining high-ridership systems, like the Nordic capitals, and those of megacities in automation and increasing throughput.

Can mixing and matching work?

Why not? In small cities with successful systems, it can’t be due to some deeply-ingrained culture – what do Stockholm, Zurich, Prague, Munich, and Budapest even have in common, other than being European? They’re not all national capitals or even all national primate cities, a common excuse New Yorkers give for why New York cannot have what London and Paris have.

Likewise, what exactly about French culture works to equip Métro lines with signals allowing 42 trains per hour per direction that cannot be adopted without also adopting real problems France has with small-city regional rail, fare integration, or national rail scheduling?

These are, ultimately, technical details. Some are directly about engineering, like Parisian train frequency. Some involve state institutions that lead to low construction costs in Spain, Korea, and the Nordic countries – but on other metrics, it’s unclear these three places have state capacity that is lacking in high-cost Taiwan, Germany, and the Netherlands. So even things that aren’t exactly about engineering are likely to boil down to fairly technical issues with how contracts are written up, how much transit agencies invest in in-house engineering, and so on.

There’s a huge world out there. And an underperforming transit agency – say, any in the United States – had better acquire all the knowledge it can possibly lay its hands on, because so many problems have already been solved elsewhere. The role of the locals is not to innovate; it’s to figure out how to imitate different things at once and make them work together. It’s not a trivial task, but every pattern suggests to me it’s doable given reasonable effort.

Our Project

Eric Goldwyn and I have just signed a two-year grant contract for our big construction cost project; we’re working via NYU, him on-site in New York and me remotely in Berlin (at least for now).

We’re hiring!

Our budget includes extensive spending on people who are not Eric or me. For now, we are looking for part-time grad student work to help with data collection. We have an ad circulating internally around NYU, but it’s also open to outsiders:

We are looking to hire up to three students from around the university to help us compile data on infrastructure costs from around the world, especially those of urban subway lines. Specifically, we are looking to understand the drivers of costs—why do public transportation infrastructure projects in one city cost more than in another city? We have already begun collecting this data on projects from around the world and would like to extend these efforts.

We are particularly looking to extend our coverage outside countries where information is readily available in English, such as the English-speaking world or Western Europe. The information we need consists first of all of headline costs of public transportation infrastructure costs, but then of more detailed breakdowns, such as construction techniques, ancillary projects, financing mechanism, the environmental review process, the legal situation, labor size, etc.

The ideal candidate will thus have the following skills:

  • Reading fluency in a foreign language used in a country or countries with major ongoing urban rail construction, such as Chinese, Korean, Spanish, Russian, or Arabic.
  • Either preexisting familiarity with engineering terms (such as “cut-and-cover”) or the ability to learn them quickly.
  • Database software, such as Excel or more advanced statistical analysis software.
  • Data analysis or data science techniques useful for small N.
  • Self-motivation and independence, for example in finding relevant information to add to the database.
  • Good oral and written communication skills.
  • Punctuality and promptness – deadlines are written in stone.

Drs. Alon Levy and Eric Goldwyn will supervise all students and work side by side with them to extract the most value from the data. There will also be opportunities to collaborate on writing projects related to the data collection efforts.

If you’re interested, please email both me at alon@pedestrianobservations.com and Eric at elg229@nyu.edu. If you only have half the listed skills, you should probably still apply, especially if these skills include a foreign language that other applicants won’t know.

We will also hire more people as time goes by. We have a budget for a postdoc-level research scholar, so if you’re graduating this year please keep in touch – I’ll post updates when we know our exact timeline, since the grant period isn’t neatly in line with academic years, but it’s a minimum one-year full-time position at NYU, one that for visa purposes is treated as an academic job (thus exempt from the work visa cap).

The goal

The ultimate deliverable in the project is a long report – I’m guessing mid-3 figures number of pages – detailing why American costs are high and what can be done about it. The report should include the following:

  • The database of construction costs, broken down to include not just headline costs but also details about construction methods, construction costs by component (stations, tunnels, systems, etc.), rock type, procurement methods, and other relevant variables.
  • A highlight of what the important variables are for explaining differences in construction costs, including hopefully a few sentences about the situation in each major city in the database (or if not each then many, on the order of 30+).
  • Potentially related databases of construction costs if we get them in sufficient detail and judge them to be comparable, such as for road tunnels, high-speed rail, rail electrification, surface tramways, and urban rail accessibility retrofits.
  • A brief how-we-got-here historical overview covering institutional and engineering background to how American infrastructure construction differs from that of most other countries.
  • Six (at least) detailed city-level case studies. New York may or may not end up as one of them; Boston almost certainly will, for work we have been doing about the Green Line Extension. The case study selection needs to happen early – this calendar year, and not near its end – and this means we need to identify solid sources who will speak to us about the historical, institutional, legal, and social factors at play.
  • A conclusion synthesizing everything to give a coherent recipe for how American (and really English-speaking in general) cities can reduce their construction costs to rest-of-world levels, and ideally even further to match the costs in cheaper countries like Spain, Switzerland, Italy, South Korea, Romania, and the Nordic countries.
  • A higher level of synthesis suggesting what a rail network for New York could look like at the lower costs we are proposing.

If you know sources who can talk to us – for example, people at agencies that are building urban rail outside the English-speaking world – then please reach out to us.

The test

I feel good about this – about the recognition, and about the ability to study comparative costs without the stress of looking for temporary gigs. I’m reaching out to various contacts and contacts-of-contacts in a number of cities that are building urban subways, and if anyone has suggestions for who I should talk to, please shoot me an email or mention what you know in comments, as this is a field with a huge base of knowledge.

But at the same time I feel terrified, because I can fail. The project is not going to completely flop, because the database already exists and there’s even more data out there that we already got but just haven’t published. But from getting even an exhaustive database to being able to make actionable recommendations the route is long, and involves case studies and qualitative research and emailing people who have no reason to have heard of me or Eric and often just don’t respond. I think it’s very likely we’ll be able to come up with a useful writeup, and decently likely that this writeup will include a recipe for building subways in New York for $200-300 million per kilometer rather than $2 billion ($100 million/km, as in Madrid and such, is aspirational).

But it’s not guaranteed. We can fail at any number of places: managing the students, finding detailed enough cost breakdowns to identify where the US fails, having broad enough coverage to write multiple case studies, getting enough experts who’ve built cheap subways to talk to us, and so on. The report I mentioned above will get written and published, but whether there is an actionable conclusion remains to be seen, and even if the conclusion is actionable, I don’t know how politically realistic it will be.

Doing this research without really knowing what we’ll find is frustrating this way. The conclusion may well be “the US needs to bust the construction unions.” I don’t think such a conclusion is likely from what we’ve seen so far, but I cannot 100% rule out that it is a significant factor. Or it may be “the US needs to get rid of common law,” which is even less likely to happen; I thought this was an important factor until 2018 or 2019. What is likelier is that a lot of local notables and small-time bureaucrats may need to be cut out of the loop entirely through more streamlined project reviews with fewer veto points, which is politically plausible but requires a governor or a federal government with a modicum of political courage to execute.

What it means for this blog

I’m going to keep posting, at the usual rate of twice a week averaged over time. If I find interesting snippets, I may post them before releasing the report; to some extent I’ve already been doing that with smaller projects. I am still going to think a lot about issues of network design and urbanist politics and will keep writing about those topics.

My Patreon is still around if people want to give me money even though I’m not lacking for it at this point. I’ve been slouching on some of the rewards as I spent months not freelancing (thus, not getting ideas to mine for extra backers-only posts and polls) but finalizing this contract, and now that I have the contract at hand and the project is starting I can go back to it as promised.

In parallel with the costs project, I am going to keep thinking about network design and come up with proposals like this one for New York and New England or this one for Germany; I’ve been thinking about an integrated America-takt or a Europe-takt, at vastly larger scale than any national plan so far, even China’s (which only covers high-speed rail and has no regional rail worth mentioning). Subject to upcoming election results, the scope of what budget is realistic may be narrow enough that I can think in terms of what a specific dollar or euro figure could do.

This of course relates to construction costs – the lower the costs, the more stuff can be built for the same amount of money. Moreover, at high enough level, absolute costs do matter: a Green Deal with €150 billion investment Germany-wide or a Green New Deal with $600 billion US-wide is a big enough proportion of GDP so as to hit real limits to tax capacity and deficit spending, so reductions in unit costs are in 1-to-1 correspondence with building more green infrastructure.

This is why costs ultimately matter. A single subway project may look like a drop in the bucket of the national budget, but when it’s bundled with the costs of an entire public transportation network, and those costs in turn are bundled with those of other major government priorities, the drop becomes a bucket and then a river and then an ocean. The biggest successes in public transportation are plans that look at everything simultaneously and integrate every aspect of operations and infrastructure, and the more cost-efficient these plans are, the further they can reach. There is no way around it.

China Won’t Save You

The construction costs of Britain’s just-approved domestic high-speed rail network, High Speed 2, are extreme. The headline costs are, in 2019 figures, £80.7-88.7 billion per the Oakervee review, with one estimate going up to £106.6 billion, all for a system only 530 km in length in mostly flat terrain. This includes rolling stock, but that is less than 10% of the projected cost. At the end of the day, Britain has decided to spend around $200 million per kilometer, a cost comparable to that of base tunnels and mostly-tunneled high-speed lines.

And now the People’s Republic of China has offered to build the entire thing for cheaper with a 5-year timeline, and everyone acts as if it’s a serious offer. So let me dust off my construction costs database and tell you: the PRC won’t save you. There is no alternative to developing good internal cost control. This requires learning from lower-cost countries, but Chinese high-speed rail construction costs are not really low.

Vietnam

Ho Chi Minh City and Hanoi are both building metros. Hanoi uses Chinese financing, HCMC uses Japanese financing. Both have very high construction costs – my database has HCMC’s 13% underground Line 1 at $320 million/km, 82% underground Line 2 phase 1 at $535 million/km, and 84% underground Line 5 phase 1 at $590 million/km, whereas Hanoi’s 74% underground Line 2A is $215 million/km and 32% underground Line 3 is $365 million/km.

The system in Hanoi has been plagued with delays. Line 2A was supposed to be operational by 2016. Construction was only completed in 2018, but the line is yet to open. Testing is ongoing, but Chinese experts couldn’t return to Vietnam after the Chinese New Year holiday because of the coronavirus quarantine. The South China Morning Post has compared the Hanoi project negatively with that of HCMC, which is for the most part on time, if expensive.

Like many developing-world cities, HCMC is paying more for a subway tunnel than Japan pays at home; to get to the cost range of HCMC in Japan, one needs to go to complex regional rail tunnels in Tokyo dipping under multiple older tunnels in city center. In that it is no different from Dhaka or Jakarta. The primary explanation must be that importing Japanese technology means using techniques optimized for a high-skill, high-wage labor force and cheap domestic capital, rather than ones optimized for a low-skill, low-wage labor force and expensive imported capital.

But that does not explain why the Hanoi Metro is so expensive. Chinese metros cost less (though not universally – Shanghai’s construction costs are rising fast): I want to say about $250 million/km on average, about the same as the non-Chinese global median, but the actually big set of data is unpublished so you guys can’t nitpick my sources yet. So what’s going on here? Vietnam is poorer than China, but the difference is not so big. It’s about half as rich as the PRC. It’s comparable to Europe, where Romania and Bulgaria are about half as rich as Western Europe, and they have low construction costs, lower than parts of Eastern Europe closer to Western incomes.

Chinese high-speed rail

The construction costs of high-speed rail in the PRC are fairly high, especially in its richer parts. The costs remain lower than those of tunnel-heavy lines like those of Italy, Japan, and South Korea, but by low-tunnel standards, they are high.

There is a perception that Chinese costs are low, but it comes from using the wrong currency conversion. Here, for example, is a World Bank report on the subject:

[P. 39] Figure 4.1 shows the construction cost of 60 projects. The average cost of a double-track HSR line (including signaling, electrification, and facilities) is about Y 139 million/km (US$20.6 million/km) for a 350 kph HSR line, about Y 114 million (US$16.9 million) for a 250 kph HSR line, and about Y 104 million (US$15.4 million) for a 200 kph HSR line. These costs are at least 40 percent cheaper than construction costs in Europe (European Court of Auditors 2018, 35).

The problem is, the exchange rate of $1 = ¥6.75 is incorrect. The OECD’s PPP conversion factor today is much higher, $1 = ¥3.5; for high-speed lines built a decade ago, it would be even higher, about $1 = ¥3.3, with ten years of American inflation since. Using the correct modern rate, the cost is about $40 million per kilometer, which is not lower than in Europe but rather higher. Beijing-Shanghai, as far as I can tell a ¥220 billion project for 1,318 km of which just 16 km are in tunnel, rises to $50 million per km, and more like $60 million per km in today’s money. It’s still cheaper than High Speed 2, but more expensive than every Continental Europe high-speed line that isn’t predominantly in tunnel, like Bologna-Florence.

There are all these longwinded explanations for why the PRC does things cheaper and faster than the first world, and they are completely false. China is not cheap to build in, especially not high-speed rail. The only reason Chinese costs aren’t even higher is that Eastern China is pretty flat. Even then, China has not taken advantage of this flatness to build tracks at-grade to minimize costs. Instead, it has built long viaducts at high cost, in contrast with the at-grade approach that has kept French LGV costs reasonable.

The PRC doesn’t even build things particularly quickly. Total actual construction time from start to finish per line segment is 4-6 years per Wikipedia’s list, which is comparable to recent LGVs. What is true is that China has been building many lines at once, and each line is long, but this is a matter of throughput, not latency. The limit to throughput is money; the PRC made a political decision to spend a lot of it at once as stimulus in the late 2000s and early 2010s, and by the same token, the UK has just made a political decision to spend just less than £100 billion on High Speed 2, in a trickle so that the system will take 15+ years to complete.

Why are they like this?

The myth of hyper-efficient Chinese construction seems never to die; I’ve seen it from the first days of this blog, e.g. then-US Secretary of Transportation Ray LaHood in 2012. It relates to a mythology that I think is mostly part of Anglo-American culture, of the tension between freedom and efficiency. The English-speaking world in this mythology is the epitome of freedom, with a gradation of less free, more efficient paces: Germany, then Japan, then finally China. It’s a world in which people’s ideas of what totalitarianism looks like come from reading George Orwell and not from hearing about the real-life Soviet Union’s comic incompetence – the gerontocracy, the court politics, the drunk officials, the technologically reactionary party apparatchiks – all of which was happening in real time in Nazi Germany too, which was fighting less efficiently than the UK and US did.

It’s equally a world in which people think rights Germans and Japanese take for granted, like various privacy protections, do not even register as important civil liberties. I dare any reader to try explaining to a British or American transit manager that really, no, you do not need our data, Central Europe manages to plan better than you without smartcards tracking users’ every move and storing the data in servers with infosec that screams “steal me.” Nor do Americans make much of an effort to import policing regimes from democracies with one twentieth their rate of police shootings per capita.

China’s incompetence is now visible to the entire world, in the form of a virus outbreak that local officials flailed about for a month, too afraid to acknowledge mistakes lest they take the fall for them. And yet it’s easier for American and British business leaders and politicians to point to China as an example to emulate than to Pareto-better France or Germany.

If anything, High Speed 2 is low-key overlearning some French lessons, leading to inferior infrastructure planning – but it’s messing up key details leading to cost explosion, such as “don’t build new signature urban train stations.” But my suspicion is that French and German rail experts will point out all those details. To us, if Britain changes some detail in a way that isn’t truly justified by local conditions, we will point it out – and push back when British blowhards try to explain to use that they do things differently because they’re morally superior to us. British people know this – they know they can’t pull rank. Americans are the same, except even less capable of dealing with other nations as equals than the British are.

The way forward

High Speed 2 is a mess, largely because of the cost. To move forward, talking to China about how it’s built high-speed rail may be useful, but it can’t be the primary comparison, not when Continental Europe is right here and does things better and cheaper. For Asian help, Japan has some important lessons about good operations and squeezing maximum use out of limited urban space. A lot of scope can be removed. A lot more can be modified slightly to connect to regional lines better.

More conceptually, Britain has a problem with costs and benefits chasing each other. If benefits are too high, the political system responds with sloppy cost control, for example by lading the project with ancillary side projects that someone wants or by giving in to NIMBY opposition. If the costs are too high, the political system responds with scrounging extra benefits, for example counting the consumer surplus of high-speed rail travelers as a benefit, by which standard every government subsidy to anyone has a benefit-cost ratio of at least 1.

Bringing in the PRC won’t help. It’s value-engineering theater, rather than the hard work required to coordinate infrastructure and timetable planning or to tell Home Counties NIMBYs that the state is not in the business of guaranteeing their views; there is so much tunneling on the proposed line that isn’t really necessary. None of the countries that builds trains cheaply did so by selling its civil service for spare parts; why would Britain be any different?

On Envying Canada

In England and Wales, 15.9% of workers get to work on public transport, and in France, 14.9% do. In Canada, the figure is close: 12.4%, and this is without a London or Paris to run up the score in. Vancouver is a metro region of 2.5 million people and 1.2 million workers, comparable in size to the metropolitan counties in England and to the metro area of Lyon; at 20.4%, it has a higher public transport modal share than all of them, though it is barely higher than Lyon with its 19.9% share. Calgary, Ottawa, Edmonton, and Winnipeg are likewise collectively respectable by the standards of similar-size French regions, such as the departments of Bouches-du-Rhône (Marseille), Alpes-Maritimes (Nice), Gironde (Bordeaux), Haute-Garonne (Toulouse), and Bas-Rhin (Strasbourg).

As a result, Jarrett Walker likes telling American cities and transit agencies to stop envying Europe and start envying Canada instead. Canada is nearby, speaks the same language, and has similar street layout, all of which contribute to its familiarity to Americans. If Europe has the exotic mystique of the foreign, let alone East Asia, Canada is familiar enough to Americans that the noticeable differences are a cultural uncanny valley.

And yet, I am of two minds on this. The most consistent transit revival in Canada has been in Vancouver, whose modal share went from 14.3% in 1996 to 20.4% in 2016 – and the 2016 census was taken before the Evergreen extension of the Millennium Line opened. TransLink has certainly been doing a lot of good things to get to this point. And yet, there’s a serious risk to Canadian public transport in the future: construction costs have exploded, going from Continental European 15 years ago to American today.

The five legs of good transit

I was asked earlier today what a good political agenda for public transportation would be. I gave four answers, like the four legs of a chair, and later realized that I missed a fifth point.

  1. Fuel taxes and other traffic suppression measures (such as Singapore and Israel’s car taxes). Petrol costs about €1.40/liter in Germany and France; diesel is cheaper but being phased out because of its outsize impact on pollution.
  2. Investment in new urban and intercity lines, such as the Madrid Metro expansion program since the 1990s or Grand Paris Express. This is measured in kilometers and not euros, so lower construction costs generally translate to more investment, hence Madrid’s huge metro network.
  3. Interagency cooperation within metropolitan regions and on intercity rail lines where appropriate. This includes fare integration, schedule integration, and timetable-infrastructure integration.
  4. Urban upzoning, including both residential densification in urban neighborhoods and commercialization in and around city center.
  5. Street space reallocation from cars toward pedestrians, bikes, and buses.

We can rate how Canada (by which I really mean Vancouver) does on this rubric:

  1. The fuel tax in Canada is much lower than in Europe, contributing to high driving rates. In Toronto, gasoline currently costs $1.19/liter, which is about €0.85/l. But Vancouver fuel taxes are higher, raising the price to about $1.53/l, around €1.06/l.
  2. Canadian construction costs are so high that investment in new lines is limited. Vancouver has been procrastinating building the Broadway subway to UBC until costs rose to the point that the budget is only enough to build the line halfway there.
  3. Vancouver and Toronto both have good bus-rapid transit integration, but there is no integration with commuter rail; Montreal even severed a key commuter line to build a private driverless rapid transit line. In Vancouver, bus and SkyTrain fares have decoupled due to political fallout from the botched smartcard implementation.
  4. Vancouver is arguably the YIMBYest Western city, building around 10 housing units per 1,000 people every year in the last few years. Toronto’s housing construction rate is lower but still respectable by European standards, let alone American ones.
  5. There are bike lanes but not on the major streets. If there are bus lanes, I didn’t see any of them when I lived in Vancouver, and I traveled a lot in the city as well as the suburbs.

Vancouver’s transit past and future

Looking at the above legs of what makes for good public transport, there is only one thing about Canada that truly shines: urban redevelopment. Toronto, a metro area of 6 million people, has two subway mainlines, and Montreal, with 4 million people, has 2.5. Vancouver has 1.5 lines – its three SkyTrain mainlines are one-tailed. By the same calculation, Berlin has 6.5 U- and 3 S-Bahn mainlines, and Madrid has 2 Cercanías lines and 7 metro lines. Moreover, high construction costs and political resistance from various GO Transit interests make it difficult for Canadian cities to add more rapid transit.

To the extent Vancouver has a sizable SkyTrain network, it’s that it was able to build elevated and cut-and-cover lines in the past. This is no longer possible for future expansion, except possibly toward Langley. The merchant lawsuits over the Canada Line’s construction impacts have ensured that the Broadway subway will be bored. Furthermore, the region’s politics make it impossible to just build Broadway all the way to the end: Surrey has insisted on some construction within its municipal area, so the region has had to pair half the Broadway subway with a SkyTrain extension to the Langley sprawl.

Put in other words, the growth in Vancouver transit ridership is not so much about building more of a network, but about adding housing and jobs around the network that has been around since the 1980s. The ridership on the Millennium and Canada Lines is growing but remains far below that on the Expo Line. There is potential for further increase in ridership as the neighborhoods along the Canada Line have finally been rezoned, but even that will hit a limit pretty quickly – the Canada Line was built with low capacity, and the Millennium Line doesn’t enter Downtown and will only serve near-Downtown job centers.

Potemkin bus networks

When Jarrett tells American cities to envy Canada, he generally talks about the urban bus networks. Toronto and Vancouver have strong bus grids, with buses coming at worst every 8 minutes during the daytime off-peak. Both cities have grids of major streets, as is normal for so many North American cities, and copying the apparent features of these grids is attractive to American transit managers.

And yet, trying to just set up a bus grid in your average American city yields Potemkin buses. Vancouver and Toronto have bus grids that rely on connections to rapid transit lines. In both cities, transit usage is disproportionately about commutes either to or from a city core defined by a 5 kilometer radius from city hall. Moreover, the growth in public transport commuting in both cities since 1996 has been almost exclusively about such commutes, and not about everywhere-to-everywhere commutes from outside this radius. Within this radius, public transportation is dominated by rail, not buses.

The buses in Toronto and Vancouver have several key roles to play. First, as noted above, they connect to rapid transit nodes or to SeaBus in North Vancouver. Second, they connect to job centers that exist because of rapid transit, for example Metrotown at the eastern end of Vancouver’s 49. And third, there is the sui generis case of UBC. All of these roles create strong ridership, supporting high enough frequency that people make untimed transfers.

But even then, there are problems common to all North American buses. The stop spacing is too tight – 200 meters rather than 400-500, with frequency-splitting rapid buses on a handful of very strong routes like 4th Avenue and Broadway. There is no all-door boarding except on a handful of specially-branded B-line buses. There are no bus lanes.

One American city has similar characteristics to Toronto and Vancouver when it comes to buses: Chicago. Elsewhere, just copying the bus grid of Vancouver will yield nothing, because ultimately nobody is going to connect between two mixed-traffic buses that run every 15 minutes, untimed, if they can afford any better. In Chicago, the situation is different, but what the city most needs is integration between Metra and CTA services, which requires looking at European rather than Canadian models.

Is Canada hopeless?

I don’t know. The meteoric rise in Canadian subway construction costs in the last 15 years has ensured expansion will soon grind to a halt. Much of this rise comes from reforms that the Anglosphere has convinced itself improve outcomes, like design-build and reliance on outside consultants; in that sense, the US hasn’t been copying Canada, but instead Canada has been copying the US and getting American results.

That said, two positive aspects are notable. The first is very high housing and commercial growth in the most desirable cities, if not in their most exclusive neighborhoods. Vancouver probably has another 10-20 years before its developable housing reserves near existing SkyTrain run out and it is forced to figure out how to affordably expand the network. Nowhere in Europe is housing growth as fast as in Metro Vancouver; among the cities for which I have data, only Stockholm comes close, growing at 7-8 net units per 1,000 people annually.

Moreover, with Downtown Vancouver increasingly built out, Vancouver seems to be successfully expanding the CBD outward: Central Broadway already has many jobs and will most likely have further commercial growth as the Millennium Line is extended there. Thus, employers that don’t fit into the Downtown Vancouver peninsula should find a home close enough for SkyTrain, rather than hopping to suburban office parks as in the US. Right now, the central blob of 100 km^2 – a metric I use purely because of limitations on French and Canadian data granularity – has a little more than 30% of area jobs in Vancouver, comparable to Paris, Lyon, New York, Boston, and San Francisco, and ahead of other American cities.

The second aspect is that Canadians are collectively a somewhat more internationally curious nation than Americans. They are more American than European, but the experience of living in a different country from the United States makes it easier for them to absorb foreign knowledge. The reaction to my and Jonathan English’s August article about Canadian costs has been sympathetic, with serious people with some power in Toronto contacting Jonathan to figure out how Canada can improve. The reaction I have received within the United States runs the gamut – some agencies are genuinely helpful and realize that they’ll be better off if we can come up with a recipe for reducing costs, others prefer to obstruct and stonewall.

My perception of Canadian politics is that even right-populists like Doug Ford are more serious about this than most American electeds. In that sense, Ford is much like Boris Johnson, who could move to Massachusetts to be viceroy and far improve governance in both Britain and Massachusetts. My suspicion is that this is linked to Canada’s relatively transit-oriented past and present: broad swaths of the Ontarian middle class ride trains, as is the case in Outer London and the suburbs of Paris. A large bloc of present-day swing voters who use public transport is a good political guarantee of positive attention to public transport in the future. American cities don’t have that – there are no competitive partisan elections anywhere with some semblance of public transportation.

These two points of hope are solid but still run against powerful currents. Toronto really is botching the RER project because of insider obstruction and timidity, and without a strong RER project there is no way to extend public transportation to the suburbs. Vancouver is incapable of concentrating resources where they do the most good. And all Canadian cities have seen an explosion in costs. Canadians increasingly understand the cost problem, but it remains to be seen whether they can fix it.

Quick Note: What is Culture, Anyway?

Six weeks ago, I talked about the Anglosphere in context of its high construction costs, especially recently. In comes Bella Wang, and in a much greater generality, asserts,

In the context of transportation, there are some empirical observations from construction cost and mode share data:

  • American transit usage underperforms any other first-world standard
  • Anglosphere construction costs are very high
  • Ex-colonies in the third world have very high construction costs

We can take all three observations to be matters of culture, but really culture is a measure of ignorance. It’s easy to list so many US-rest-of-world cultural differences, and still possible to list Anglosphere-rest-of-world differences that cover Singapore. But the question, which of them are relevant and which aren’t?, is still critical.

Separately, there’s the question, how deep is a specific cultural attribute? The example I want to zoom in on is the issue of hyperlocalism and too many stakeholders. In Brooks-Liscow, it’s identified as a key contributing factor to rising highway construction costs in the US since the 1960s (“citizen voice”) alongside rising incomes. In addition, one expert Eric and I talked to mentioned the multiplicity of stakeholders, as well as many other issues, not all of which I think are relevant.

From one angle, hyperlocalism goes very deep in American culture. Some of it is relatively recent, coming from the white middle class’s desire to maintain local control as the only way to legally prevent integration. Some of it is older – New England had a lot of local empowerment in the 18th and 19th centuries, and unlike in Europe, local elites were viewed as leaders who brought freedom rather than as the main obstacles to freedom.

But from another angle, the specific mechanism through which hyperlocalism acts is not that deep. The local gadfly who launches nuisance lawsuits against everything is a figure of derision; the politician who cuts through the red tape and knocks some heads together and gets things done is a figure of worship and a prime candidate for higher office. If anything, the reason things do not get done in the United States is that politicians prefer to play it safe and knock heads together on low-risk, low-reward projects, hence for example Andrew Cuomo’s proposal for a LaGuardia air train that goes the wrong way but avoids a NIMBY fight from 20 years ago.

The example of Cuomo’s air train, in turn, introduces another attribute: do-nothing politicians. That’s a fairly American problem – other high-cost countries, like Britain and Canada, have politicians that build extravagant projects at high cost, but those projects (HS2, Ontario Line, etc.) are actually useful. Is it a result of an American legal regime that favors the state against the individual and therefore cannot guarantee security of property unless the government credibly pledges to be slow and stupid? Or is it a contingent effect of a handful of governors being slow and stupid in 2019, which may change if someone more competent is elected in the future?

The ultimate question is “can anything get better?”. There’s a lot of evidence in both directions when it comes to American construction costs; when it comes to transit usage in the vast majority of the United States where there is no public transit, the same is true but right now I believe the evidence is stronger on the “no” side.

I’m Giving a Talk About Construction Costs Tomorrow

By popular demand, I’m giving the talk I gave 2 weeks ago at NYU, again. The database will be revised slightly to include more examples (like Ukraine, which I added between when I gave the talk and when I blogged about it), and I may switch around a few things, but it should be similar to what I already said.

Where? Halyards in Brooklyn at 3rd Avenue and 6th Street, near the 4th Avenue/9th Street subway stop where the F/G and R intersect.

When? Monday December 2nd at 9 pm, for an hour.

Do I need to RSVP? No.

Will there be food? To some extent – the bar has minimal selection, although what it does have on the menu seems better for the price than most American bar food (which, to be fair, is like saying “better public transportation than Los Angeles”).

I Gave a Talk About Transportation in Connecticut

I gave a second talk this week about transportation, this time at Hartford Station, concerning the plans for Connecticut transportation. The starting point is Governor Lamont’s $21 billion plan for investment, including both expansion and repairs (read: the State of Good Repair black hole), of which $14 billion is highways, $6.2 billion is rail, and $450 million is buses. But most of the talk concerns what Connecticut should be doing, rather than the specifics of Lamont’s plan.

Here are my slides. The talk itself took around 40-45 minutes out of a nearly 2-hour meeting, so it was designed around taking many questions, and around further explanations. Something I didn’t put in the slides but explained verbally is how easy the modern track renewal process is. Nowadays, there are machines that use no infrastructure except the tracks themselves, running on the tracks at very low speed (slower than walking) and systematically replacing the rails, ties, and ballast. They can also regrade the tracks’ superelevation angle independently of the drainage angle, changing the tracks’ cant as they go. The upshot is that increasing the cant on tracks is almost cost-free, and would enable large increases in train speed on both regional and intercity trains.

Other technology that has negative cost in the future is getting higher-performance EMUs than the current equipment. The current trains are obsolete technology, built around superseded federal regulations. There’s no point in getting more of the same. They’re okay to run until end of life, but new purchases should involve electrification and modern European EMUs. Whereas infrastructure costs are rising (see here and here), technology costs are falling in real terms. The fall in train costs is not so quick as that of computer costs, but still the rolling stock factories are designed around making products for the 2020s, not the 1990s, and retooling them for older technology costs extra.

Hence my slogan from the talk: better things are possible, on a budget.

One question I was asked at the talk that I didn’t have an answer to was, why is construction in Connecticut so expensive? Plans for infill stations are budgeted extravagantly, ranging between $50 million and $100 million without any special construction difficulties. Boston builds infill stations (counting high-platform upgrades as infill since the preexisting stations have no facilities) for $20-30 million counting various hidden costs (e.g. regular MBTA employees, like project managers, count as operating and not capital costs even if they only work on capital costs); Berlin does for €10-20 million.

After the talk, Roger Senserrich explained to me (and a planner at the MBTA confirmed to me) that in Connecticut there’s no in-house design at all. Massachusetts has a mix of in-house design review, with the team stymied by uncompetitive wages making hiring and retention difficult, and outsourcing work to consultants. CDOT exclusively outsources to consultants, and has no in-house expertise to evaluate whether the contracts are fair or whether it’s being overcharged.

I Gave a Talk About Construction Costs

Two years ago, I gave a talk at NYU about regional rail, and as promised, uploaded slides the next day for discussion. Yesterday I gave another such talk, about construction costs.

But here there are two things to upload: the slides, and the data table. I’ve been intermittently adding cities to a spreadsheet of various urban rapid transit lines and their construction costs, and by now there is a total of 207 distinct items, ranging from 1 km extensions to 3-figure packages like 200-km GPX and 160-km Delhi Metro phases. The total length of the lines in this database right now is 3610 km, of which 2090 are underground. These are almost exclusively new lines – most of them aren’t even open, and most of the rest opened this decade, so be cautious since much of the cost estimation is ex ante and a number of the soon-to-open line on the list have had serious cost overruns.

I hope people make use of this dataset and the preliminary analysis contained in the slides, and I ask that people look at both, since the slides do have some interpretive notes about confounding variables. One note that I did not include in the slides and explained verbally is what source means in the table: media means I’m drawing costs from popular media, trade means trade media like Railway Gazette, plan means official plans (either ex ante or ex post), wiki means Wikipedia (as always, a reliable source for line length and station count, never cost), measured means I measured line length on Google Earth lacking any alternative. One item, Crossrail, has its tunnel cost coming from a freedom of information request submitted by an alert reader who I will credit upon request; the headline budget is somewhat higher as it includes surface improvements, a common confounder for regional rail projects (the RER E extension, for example, splits its budget about 50/50 between the tunnel and above-ground works).

More detailed analysis is forthcoming, either here or in print.