I am only loosely following the news about the second phase of Second Avenue Subway. The project, running from 96th Street to 125th, with a short segment under 125th to Lexington, passing under the 4, 5, and 6 trains, is supposed to be cheap. In the 1970s, work began on Second Avenue Subway before the city went bankrupt, and there are extant tunnel segments built cut-and-cover in East Harlem between the station sites. The stations need to be dug, but the plan dating back to 2003 was to build them cut-and-cover as well, with local disruption for only a few blocks around 106th, 116th, and 125th Streets. Only one part would be difficult: going deep under 125th, under the preexisting subway. And yet, costs are very high, and the design seems to be taking a wrong turn.
In the early 2000s, the cost projections were $3.7 billion for phase 1 (actual cost: $5 billion, but much of the difference is inflation), and $3.3 billion for phase 2 (projected cost: at least $6 billion). Since then, there have been changes. For about a year I heard rumors that the preliminary engineering had been done wrong, and it was impossible to use the preexisting tunnel segments. Then I heard that no, it’s actually possible to use the existing tunnels. But a few days ago I heard that even though it’s possible, the MTA is now planning to demolish the existing tunnels and build the entire project deep underground using tunnel-boring machines.
With the information generally given out at community meetings, it’s hard to know what’s exactly going on. However, the fact that the MTA is talking about this suggests extreme disinterest in cost control. Cut-and-cover construction is cheaper than TBMs, per a 1994 paper looking at French urban rail costs since the 1970s. The tradeoff is that it forces rail lines to go underneath streets, which is disruptive to pedestrians and merchants, or demolish private property. Fortunately, Second Avenue is a wide, straight throughfare, and requires no such demolitions, while the disruption would be localized to areas that are scheduled to get subway stops as part of the project. Metro extensions here and in a number of other European cities are constructing stations cut-and-cover and the tunnels between them with TBMs; Metro Line 12’s online documents state that station construction involves just 18 months of digging.
It’s possible that the need to turn to 125th Street is messing up the plan to do everything cut-and-cover. While the turn itself can be done with minimal demolitions (the inside of the curve has a few small buildings, and there’s also an alignment slightly farther east that goes under vacant land while maintaining a 90-meter curve radius), going underneath the Lexington Avenue Line requires diving deep, and then there is no advantage to cut-and-cover. Building cut-and-cover under existing lines is difficult, and in that case, TBMs are warranted.
If the problem is 125th Street, then I would propose extending phase 2 and then breaking it apart into two subphases. Phase 2.0 would be cut-and-cover and open stations at 106th, 116th, and possibly 125th and 2nd temporarily. Phase 2.5 would involve driving TBMs under 125th Street all the way to Broadway; this could be done with a large-diameter TBM, with the platforms contained within the bore and vertical access dug so as to avoid the intersecting north-south subways. 125th Street has 30,000 crosstown bus boardings according to the MTA, which would make it the busiest bus corridor in the city per km: 10,000 per km, compared with 8,000 on the busiest single route, the M86. It is a priority for subway expansion, and if it’s for some reason not possible to easily build from 96th and 2nd to 125th and Lex in one go then the entire project should be extended to 125th and Broadway, at somewhat higher cost and far higher benefits.
The reason phase 1 was so expensive is that the stations were mined from small digs, rather than built cut-and-cover as is more usual. The idea was to limit street disruption; instead there was street disruption lasting 5 years rather than 1.5, just at small bore sites at 72nd and 86th rather than throughout the station boxes’ footprints. The TBM drive and systems cost together $260 million per kilometer, compared with $125 million on Paris’s Metro Line 1 extension, but the stations cost $750 million each, compared with $110 million.
It’s crucial that the MTA not repeat this mistake in phase 2, and it’s crucial that area transit activists hold the MTA’s feet to the fire and demand sharp cost control. Even taking the existing premiums as a given, cut-and-cover stations should not cost more than $200 million each, which means phase 2 as planned should cost $600 million for stations, about $330 million for systems, and another $350 million for overheads. At $1.3 billion this still represents high cost per kilometer, about $500 million, but it’s based on actual New York cost items, which means it’s plausible today. There is no excuse for $6 billion.
The Wall Street Journal is reporting a bombshell story about New York’s subway station renovation program. The MTA had a budget of $936 million for renovating 32 subway stations, but nearly the entire budget is exhausted after the MTA has spent it on only 19 stations. These renovations do not include accessibility, which New York is lagging on. I’m interviewing people in the disability rights community about New York’s problems in this area, but the smoking gun about Lhota is not that issue, on which he is no worse than anyone else. Rather, it’s that Lhota hid the fact of the cost overrun from the MTA board. Per the Journal:
On Monday, Carl Weisbrod, a commissioner who represents New York City, said the program was “ill-conceived,” and that he is glad it has come to an end.
“I don’t know when the MTA management realized that the program had run out of money but it would’ve been helpful to have informed the board when this matter was under discussion,” he said.
Mr. Lhota said he was aware of the increased costs last year, but he chose not to mention it until now. “I didn’t think it was relevant to the debate,” he said.
An alternative way to phrase Lhota’s own words is that he is concealing critical information from the public relevant to public spending priorities. In other words, he is defrauding the public when it comes to costs. Previously he had been merely making excuses for high construction costs (e.g. saying New York, founded in the 17th century, is old, and thus naturally has higher costs than cities founded in the Middle Ages or even in Antiquity). But now it turns out that he’s not only trying to deflect criticism, but is actively putting obstacles in front of board members, journalists, and ordinary citizens who want to discuss MTA capital expansion.
Absent democratic mechanisms for oversight of the state, the state will not engage in cost-effective projects. We know this, because the part of public policy most insulated from public criticism, the military and security in general, is the most bloated. The US is wasting a trillion and a half dollars on the F-35, and allies like Israel are wasting money buying this jet from the US military industry. It’s hard to question the costs when overconfident military commanders say “this is necessary for national security.” The intelligence community is even worse, with self-serving slogans like “our successes are private and our failures are public.”
Evidently, facing criticism over costs, domestic agencies portray their projects as necessary rather than useful, hence the weak claims that Gateway is required to avoid shutting down rail service across the Hudson. My specific criticism of the argument that Gateway is required is that the study recommending long-term shutdowns of the existing tunnels did not even attempt to provide a comparative cost of maintaining the tunnels on nights and weekends as is done today. An informed public can more easily demand an end to bad investments, and specific interest groups can highlight how they are harmed by bad spending: the Journal article mentions disability rights advocates demanding that the MTA instead spend money on putting elevators at stations to make them accessible to people in wheelchairs.
The station renovations are especially at risk of being canceled if an informed public finds their costs offensive. The benefits include better maintenance standards, but those are almost self-evidently useful but not necessary. Activists can complain about costs or demand that the money be spent elsewhere.
In Astoria, activists complain that the MTA is renovating stations at a cost of $40 million per station without even installing elevators for accessibility. In London, the cost of the Step-Free Access program is £200 million for 13 stations, or about $20 million per station, and in Paris, where only Metro Line 14 and the RER A and B are accessible, disability rights activists estimate the cost of making the remaining 300 stations accessible at €4-6 billion. This is profoundly different from the situation with tunneling costs, where London has a large premium over Paris and New York has a large premium over London. It is likely that New York can install elevators at the same cost of its top two European peers if it puts its mind to it.
However, such investments are not possible under the current leadership. If a hack like Lhota stays in charge of the MTA, there is not going to be transparency about contracting and about costs, which means that small overruns can blow out of proportion before anyone notices. In such an environment, high costs are not surprising. If New York State is interested in good, cost-effective transit, it will get rid of Lhota and replace him with an experienced transit manager with a good history regarding cost control and respect for the democratic process.
The most persistent criticism I have heard of my writings on construction costs, coming from YIMBY Princeton, is the importance of gradual expertise and experience. Against my claim that Americans build subways for higher costs than the rest of the world due to poor management practices, regulations, and procurement, and scope creep, YIMBY Princeton says that high costs are a result and not a cause of the rarity of American subway investment. I believe that high US costs are endogenous and therefore the US is reluctant to fund rail transit; he believes that disinterest in transit is endogenous and if the US were willing to build more rail lines, then construction costs would naturally go down through economies of scale and steady accumulation of project management expertise. I promised last year that I would go over his argument more carefully, and am going to do so in this post.
The obvious difficulty with this debate is that we agree there is negative correlation between construction costs and the extent of construction, and disagree on causation. Wikipedia lists 55 countries with metro systems, with a handful more with under-construction metros, but this is not enough of a dataset for large-n studies. There are too many control variables – for example, it’s easier to build the first subway line than the tenth, which reduces the proper comparisons for New York to a handful of large cities. Instead, the only real way to figure out what causes what is to rely on a handful of natural experiments.
I can come up with a number of natural experiments. One is ambiguous about causation: the role of poor project management in the high construction costs in Boston and Paris. The others all suggest that high costs are endogenous to the US, rather than unwillingness to build subway tunnels. These include the history of construction costs in New York, London, and Paris in the 1930s; the construction costs in London today; and the history of construction costs in Seoul from the 1970s to the present.
I know of two overpriced rail extensions blamed explicitly on poor project management: the Green Line Extension in Boston, and Grand Paris Express. As I explained in CityLab a few months ago, the GLX was budgeted at $3 billion for just 7.5 km of light rail trench in preexisting open cuts, but the MBTA cut this to $1.1 billion in actual construction plus $1.2 billion in rolling stock and sunk costs through hiring a more experienced project manager. In Paris, one of the reasons the Cour des Comptes cited in its report about the cost overrun is lack of experience in managing such a large project; as a result, the 200 km system, with 160 km underground, is now up to €35 billion.
The problem is that even with better cost control, Boston’s construction remains pricey. At $150 million per km, GLX is expensive for a line in a preexisting right-of-way, and not far behind GPX’s $220 million per km for an 80% underground network. While both Boston and Paris can expect future construction to be cheaper if they apply the lessons of GLX and GPX cost overruns, their absolute costs remain different, with Boston spending more per unit than Paris. At best this is neutral between my explanation and that of YIMBY Princeton.
Construction costs, dieselpunk edition
New York’s subway construction costs have risen since the start. In 1900-4, the First Subway cost $32 million for 22 km of subway and 1 km of viaduct (namely, the 125th Street viaduct on today’s 1 train), and another $3 million for 9 km. In today’s money, this is $39 million per km underground and $9 million per km elevated. JRTR has some statistics for the Dual Contracts, built in the 1910s and early 20s, and the IND, built in the 1930s. The Dual Contracts cost $366 million, equivalent to around $8 billion today; the total route-length added was about 180 km, of which 70 km was underground, consistent with a cost of about $80 million per underground km. Then the IND cost $815 million, equivalent to about $14 billion today, for 97 route-km, practically all underground, or about $140 million per km.
The projected cost of Second Avenue Subway kept rising. In 1929 the projection was $86 million, or about $1.2 billion in today’s money, or $90 million per km; this was before the IND cost overruns materialized (at a time of general deflation). In 1939 it was up to $249 million, or $4.2 billion today, about $320 million per km; by 1949, it had crept up to $500 million, or $5 billion today and $390 million per km. Put another way, WW2-era America, a country that had just built massive public works in the Depression as well as the war, including the IND and Chicago’s two subway lines through the Loop, was already projecting a higher per km cost than is routine in nearly the entire world today. Moreover, the plan was to build Second Avenue Subway cut-and-cover, a technique that is cheaper today than the deep boring typical of comparable infill subways in the first world.
I have less data than I’d like for other cities’ construction costs in the interwar era, but where they exist, they are a fraction of New York’s. The London Underground extension to Cockfosters in the Depression cost £4m for 12 km, 60% underground, per Wikipedia. In today’s money it’s $45 million per underground km. In Paris, there was little growth in real costs between 1913 and 1930: according to a presentation by Pascal Désabres, construction costs in today’s money in both 1913 and 1930 were about €23 million per km, or about $29 million per km.
London’s mounting costs
In the 1930s, London built an Underground extension for $45 million per km. After the war, it could no longer do so. According to numbers in the Financial Times, the Victoria line cost £4.5 million per km in the 1960s, all underground, which is about $110 million per km in today’s money, while the Jubilee line, built in the 1970s, cost about $250 million per km.
The Victoria and Jubilee lines were more complex projects than the Cockfosters extension, going under older Underground lines. The Jubilee line also included the construction of a transfer station with the Northern and Bakerloo lines at Charing Cross, whereas previously they only connected at the next two stations, Embankment and Waterloo. However, the construction technique, the tunnel-boring machine, is one that is supposed to have a much smaller city-center premium over outlying construction, since there is no surface disruption.
But whereas the Victoria and Jubilee lines had excuses for their high costs, more recent Underground extensions do not. In the 1990s, the Jubilee line extension cost around $500 million per km in today’s money, going under a few older Underground lines and crossing the Thames four times (in an environment with not much underwater premium) but mostly extending the system to the east, to previously underserved areas like Canary Wharf. The under-construction Battersea extension, crossing under one older line and serving a relatively undeveloped area at Battersea Power Station, is about $550 million per km. The next Underground extension under discussion today, that of the Bakerloo line to Lewisham, is budgeted at £3.1 billion over 7 km, or about $620 million per km, crossing under no Underground lines and largely following a wide road.
Under YIMBY Princeton’s theory, London’s construction costs should be decreasing as it obtains more experience tunneling in a constrained urban area with millennium-era sensitivity to environmental impact like noise. But on the contrary, costs keep growing.
Seoul’s low costs
If London is the expensive city that should under YIMBY Princeton’s theory get cheaper but isn’t, Seoul is the cheap city that should have been expensive in the 1980s but wasn’t. JRTR has data from the 1970s to the 1990s: after an increase at the beginning, Seoul’s construction costs stabilized in the 1980s and 90s at about $80 million per km in constant dollars in today’s money. These costs seem to persist today, judging by the Sin-Bundang Line, which cost 1,169 billion won for 18 km, converting to about $90 million per km in PPP dollars.
Seoul is consistent with the theory that costs are endogenous to a city or country. There is high correlation between the construction costs of different lines within the same city: having set non-US records with the Jubilee line extension, London keeps building very expensive Underground extension of the Northern and Bakerloo lines; Paris is spending around $250 million per underground km on a number of Metro extensions; Seoul keeps building subways at just under $100 million per km.
Amtrak’s Gateway project, spending $30 billion on new tunnels from New Jersey to Penn Station, just got its federal funding yanked. Previously the agreement was to split funding as 25% New York, 25% New Jersey, 50% federal; the states had committed to $5.5 billion, which with a federal match would build the bare tunnels but not some of the ancillary infrastructure (some useful, some not).
When Chris Christie canceled ARC in 2010, then estimated at $10-13 billion, I cheered. I linked to a YouTube video of the song Celebration in Aaron Renn‘s comments. ARC was a bad project, and at the beginning Gateway seemed better, in the sense that it connected the new tunnels to the existing station tracks and not to a deep cavern. But some elements (namely, Penn Station South) were questionable from the start, and the cost estimate was even then higher than that of ARC, which I attributed to both Amtrak’s incompetence and likely cost overruns on ARC independent of who managed it.
But I’m of two minds about to what extent good transit advocates should cheer Gateway’s impending demise. The argument for cheering is a straightforward cost-benefit calculation. The extra ridership coming from Gateway absent regional rail modernization is probably around 170,000 per weekday, a first-order estimate based on doubling current New Jersey Transit ridership into Penn Station. At $40,000 per weekday rider, this justifies $7 billion in construction costs, maybe a little more if Gateway makes it cheaper to do maintenance on the old tunnels. Gateway is $30 billion, so the cost is too high and the tunnel should not be built.
Moreover, it’s difficult to raise the benefits of Gateway using regional rail modernization. On the New Jersey side, population density thins fast, so the benefits of regional rail that do not rely on through-running (high frequency, fare integration, etc.) are limited. The main benefits require through-running, to improve access on Newark-Queens and other through-Manhattan origin-destination pairs. Gateway doesn’t include provisions for through-running – Penn Station South involves demolishing a Manhattan block to add terminal tracks. Even within the existing Penn Station footprint, constructing a new tunnel eastward to allow through-running becomes much harder if the New Jersey Transit tracks have heavy terminating traffic, which means Gateway would make future through-running tunnels more expensive.
But on the other hand, the bare tunnels are not a bad project in the sense of building along the wrong alignment or using the wrong techniques. They’re just extremely expensive: counting minor shoring up on the old tunnels, they cost $13 billion for 5 km of tunnel. Moreover, sequencing Gateway to start with the tunnels alone allows dropping Penn South, and might make it possible to add a new tunnel for through-running mid-project. So it’s really a question of how to reduce costs.
The underground tunneling portion of Second Avenue Subway is $150 million per km, and that of East Side Access is $200 million (link, PDF-p. 7). Both figures exclude systems, which add $110 million per km on Second Avenue Subway, and overheads, which add 37%. These are all high figures – in Paris tunneling is $90 million per km, systems $35 million, and overhead a premium of 18% – but added up they remain affordable. A station-free tunnel should cost $350 million per km, which has implications to the cost of connecting Penn Station with Grand Central. Gateway is instead around $2 billion per km.
Is Gateway expensive because it’s underwater? The answer is probably negative. Gateway is only one third underwater. If its underwater character alone justifies a factor of six cost premium over Second Avenue Subway, then other underwater tunnels should also exhibit very high costs by local standards. There aren’t a lot of examples of urban rail tunnels going under a body of water as wide as the Hudson, but there are enough to know that there is not such a large cost premium.
In the 1960s, one source, giving construction costs per track-foot, finds that the Transbay Tube cost 40% more than the bored segments of BART; including systems and overheads, which the source excludes, BART’s history gives a cost of $180 million, equivalent to $1.38 billion today, or $230 million per km. The Transbay Tube is an immersed tube and not a bored tunnel, and immersed tubes are overall cheaper, but a report by Transport Scotland says on p. 12 that immersed tubes actually cost more per linear meter and are only overall cheaper because they require shorter approaches, which suggests their overall cost advantage is small.
Today, Stockholm is extending the T-bana outward in three direction. A cost breakdown per line extension is available: excluding the depot and rolling stock, the suburban tunnel to Barkarby is $100 million per km, the outer-urban tunnel to Arenastaden in Solna is $138 million per km, and the part-inner urban, part-suburban tunnel to Nacka is $150 million per km. The tunnel to Nacka is a total of 11.5 km, of which about 1 is underwater, broken down into chunks using Skeppsholmen, with the longest continuous underwater segment about 650 meters long. A 9% underwater line with 9% cost premium over an underground line is not by itself proof of much, but it does indicate that the underwater premium is most likely low.
Based on the suggestive evidence of BART and the T-bana, proposing that bare Hudson tunnels should cost about $2-2.5 billion is not preposterous. With an onward connection to Grand Central, the total cost should be $2.5-3 billion. Note that this cost figure does not assume that New York can build anything as cheaply as Stockholm, only that it can build Gateway for the same unit cost as Second Avenue Subway. The project management does not have to be good – it merely has to be as bad as that of Second Avenue Subway, rather than far worse, most likely due to the influence of Amtrak.
The best scenario coming out of canceling Gateway is to attempt a third tunnel project, this time under a government agency that is not poisoned by the existing problems of either Amtrak or Port Authority. The MTA could potentially do it; among the agencies building things in the New York area it seems by far the least incompetent.
If Gateway stays as is, just without federal funding, then the solution is for Amtrak to invest in its own project management capacity. The cost of the Green Line Extension in Boston was reduced from $3 billion to $2.3 billion, of which only $1.1 billion is actual construction and the rest is a combination of equipment and sunk cost on the botched start of the project; MBTA insiders attribute this to the hiring of a new, more experienced project manager. If Gateway can be built for even the same unit cost as Second Avenue Subway, then the existing state commitments are enough to build it to Grand Central and still have about half the budget left for additional tunnels.
A much-awaited Regional Plan Association report about construction costs in New York has come out, as a supplement to the Fourth Regional Plan, and I’m unimpressed. I thought that I would either enjoy reading the RPA’s analysis, or else be disappointed by it. Instead, I’ve found myself feeling tepid toward most of the analysis; my objections to the report are that its numbers have serious mistakes, that the recommendations at the end conflict with the analysis, and that it seems to overvalue other English-speaking countries, even when their construction costs are the highest in the world outside the US.
The big contrast is with Brian Rosenthal’s expose in the New York Times. The main comparison city to New York there is Paris, where the extension of Metro Line 14 resembles New York’s subway extensions; for the article, Brian talked to construction managers here, and either visited the site himself or talked to people who did, to compare the situation with that of New York. As a result, I learned things from Brian’s article that I did not know before (namely, that the excavation per station for the Line 14 extension wasn’t less voluminous than for Second Avenue Subway). The RPA report gives a few details I wasn’t familiar with, such as escalators’ share of construction costs, but nothing that seems big.
I feel like I slag on the RPA a lot nowadays – it started with their report from three years ago about Outer Borough transit and continued with their wrong approach to Triboro, but more recently I didn’t think much of their take on suburban TOD, or the Gateway project, or the Fourth Regional Plan in general. This isn’t out of malice or jealousy; when I talked to Tom Wright six months ago I sympathized with the political constraints he was operating under. The problem is that sometimes these constraints lead either to unforced errors, or to errors that, while I understand where they come from, are big enough that the organization should have pushed and made sure to avoid them. In the case of the construction cost report, the errors start small, but compound to produce recommendations that are at times counterproductive; agency officials reading this would have no way of reducing costs.
Mistakes in the Numbers
The RPA is comparing New York’s costs unfavorably with those of other cities around the world, as well as one American city (Los Angeles). However, at several points, the numbers appear different from the ones I have seen in the news media. Three places come to mind – the first is a nitpick, the second is more serious but still doesn’t change the conclusions, the third is the most egregious in its implications.
The first place is right at the beginning of the report. In the executive summary, on page 2, the RPA gives its first example of high New York costs:
The Second Avenue Subway (SAS), for example, has the distinction of being the world’s most expensive subway extension at a cost of $807 million per track mile for construction costs alone. This is over 650% more per mile than London’s Northern Line extension to Battersea — estimated at $124 million per track mile.
Both sets of numbers are incorrect – in fact, contradicted by the rest of the document. SAS is $1.7 billion per route-km, which is $850 million per track-km. The Northern line extension to Battersea is also much more expensive. I can’t tell whether these figures are missing something, such as stations or overheads, but as headline numbers, they’re both lowballed.
The second place is when the report discusses station construction costs. Not having seen any advance copy, I wrote about this issue two weeks ago, just before the report came out: the three new SAS stations cost $821, $649, and $802 million, according to the Capital Program Dashboard. In contrast, on pp. 16-17, the RPA gives lower figures for these stations: just $386 million, $244 million, and $322 million. The RPA’s source is “Capital Construction Committee reports,” but my post on station costs looked at some of those and found costs that are not much lower than those reported in the Dashboard. The RPA figures for the last two stations, 86th and 72nd, seem close to the costs of finishes alone, and it’s possible that the organization made a mistake and confused the cost of just finishes (or perhaps just excavation) with the total cost, combining both excavation and finishes.
With the correct costs, the difference from what Paris spends on a station (about $110 million on average) seems so stark that the recommendations must center station construction specifically, and yet they don’t.
The third and most problematic mistake is table 10 on page 50, which lists a number of subway projects and their costs. The list is pretty short, with just 11 items, of which 3 are in New York, another is in Los Angeles, one is in Toronto, and 2 are in London. The Toronto project, the Spadina subway extension to Vaughan, and one of the London projects, the Northern line extension, are both lowballed. The RPA says that the Northern line extension’s cost is $1.065 billion, but the most recent number I’ve seen is £1.2 billion, which in PPP terms is $1.7 billion. And the Vaughan extension, listed as $1.961 billion in the report, is now up to C$3.2 billion, about $2.55 billion in PPP terms. Perhaps the RPA used old numbers, before cost escalations, but in such a crucial report it’s important to update cost estimates even late in the process.
But most worryingly, the costs on table 10 also include mistakes in the other direction, in Paris and Tokyo. The cost estimate listed for Line 14 South in Grand Paris Express is $4.39 billion. But the Cour des Comptes’ report attacking Grand Paris Express’s cost overruns lists the line’s cost as only €2.678 billion, or about $3.3 billion; this is in 2012 euros, but French inflation rates are very low, well below 1% a year, and at any rate, even applying American inflation rates wouldn’t get the cost anywhere near $4 billion. In Tokyo, the RPA similarly inflates the cost of the Fukutoshin Line: it gives it as $3.578 billion, but a media report after opening says the cost was ¥250 billion, or about $2.5 billion in today’s PPP conversion, with even less inflation than in France.
I can understand why there would be downward mistakes. Reports like this take a long time to produce, and then they take even longer to revise even after they are supposedly closed to further edits; I am working on a regional rail report for TransitMatters that has been in this situation for three months, with last-minute changes, reviews by stakeholders, and printing delays. However, the upward mistakes in Paris and Tokyo are puzzling. It’s hard to explain why, since the RPA’s numbers are unsourced; it’s possible they heard them from experts, but didn’t bother to write down who those experts were or to check their numbers.
The Synthesis Doesn’t Follow the Analysis
Manuel Melis Maynar’s writeup in Tunnelbuilder about how as CEO of Madrid Metro he delivered subway construction for, in today’s money, around $60 million per km, includes a number of recommendations. The RPA report cites his writeup on several occasions, as well as his appearance at the Irish Parliament. It also cites secondary sources about Madrid’s low construction costs, which appear to rely on Melis’s analysis or at least come to the same conclusions independently. However, the RPA’s set of recommendations seems to ignore Melis’s advice entirely.
The most glaring example of this is design-build. Melis is adamant that transit agencies separate design from construction. His explanation is psychological: there are always some changes that need to be made during construction (one New York-based construction manager, cited on p. 38 of the RPA study, says “there is no 100% design”), and contractors that were involved in the design are more likely to be wedded to their original plans and less flexible about making little changes. This recommendation of Melis’s is absent from the report, and on the contrary, the list of final recommendations includes expansion of design-build, a popular technique among reformers in New York and in a number of English-speaking cities.
Another example is procurement. I have heard the same explanation for high New York costs several times since I first brought up the issue in comments on Second Avenue Sagas: the bidding process in New York picks the lowest-cost proposal regardless of technical merit (Madrid, in contrasts, scores proposals 50% on technical merit, 30% on cost, and 20% on speed), and to avoid being screwed by dishonest contractors, the state writes byzantine, overexacting specs. As a result, nobody wants to do business with public works in New York, which means that in practice very few companies bid, leading to one-bid contracts. Brian’s article in the New York Times goes into how contractors have an MTA premium since doing business with the MTA is so difficult, and there’s also less competition, so they charge monopoly rates.
The RPA report’s analysis mentions this (pp. 3-4):
In addition, the MTA’s practice of selecting the lowest qualified bidder, even though they are permitted to issue Requests-for-Proposals, has resulted in excessive rebidding and the selection of teams that cannot deliver, resulting in millions of dollars in emergency repairs.
However, the list of recommendations at the end does not include any change to procurement practices to consider technical merit. The recommendations include post-project review for future construction, faster environmental review, reforms to labor rules, and value capture, but nothing about reforming the procurement process to consider technical merit.
Finally, the report talks about the problem of change orders repeatedly, on pp. 3, 15-16, and 38-39, blaming the proliferation of change orders for part of the cost escalation on SAS. Melis addresses this question in his writeup, saying that contracts should not be awarded for a lump sum but rather be itemized, so that change orders come with pre-agreed costs per item. None of this made it to the final recommendations.
There’s a World Outside the Anglosphere
If the report’s recommendations are not based on its own analysis, or on correct construction cost figures, then what are they based on? It seems that, like all failed reform ideas around the US, the RPA is shopping for ideas from other American cities or at least English-speaking ones that look good. Its recommendations include “adopt London’s project delivery model” and “expand project insurance and liability models,” the latter of which is sourced to the UK and Australia. Only one recommendation so much as mentions a non-English-speaking city: “develop lessons learned and best-practice guidance as part of a post-project review” mentions Madrid in passing, but focuses on Denver and Los Angeles.
This relates to the pattern of mistakes in the cost figures. Were the numbers on table 10 right, the implication would be that London, Paris, and Tokyo all have similar construction costs, at $330, $350, and $400 million per km, and Toronto is cheaper, at $230 million per km. In this situation, London would offer valuable lessons. Unfortunately, the RPA’s numbers are wrong. Using correct numbers, London’s costs rise to $550 million per km, while those of Paris and Tokyo fall to $260 and $280 million. Toronto’s costs rise to $300 million per km, which would be reasonable for an infill subway in a dense area (like the Fukutoshin Line and to some extent the Metro Line 14 extension), but are an outrage for a suburban extension to partly-undeveloped areas.
Using correct numbers, the RPA should have known to talk to people in countries that don’t speak English. Many of the planners and engineers in those countries speak English well as a second language. Many don’t, but New York is a large cosmopolitan city with immigrants with the required language skills, especially Spanish.
Nonetheless, the RPA report, which I am told cost $250,000 to produce, does not talk to experts in non-English-speaking countries. The citations of Melis are the same two English-language ones I have been citing for years now; there is no engagement with his writings on the subject in Spanish or his more recent English-language work (there’s a paper he coauthored in 2015 that I can’t manage to get past the paywall update: kind souls with academic access sent me a copy and it’s not as useful as I’d hoped from the abstract), nor does the RPA seem to have talked to managers in Madrid (or Barcelona) today. Across more than 200 footnotes, 30-something are sourced to “expert interviews,” and of those all but a handful are interviews with New York-based experts and the rest are interviews with London-based ones.
As a result, while the report is equipped to explain New York’s internal problems, it fails as a comparative piece. The recommendations themselves are primarily internal, based on things Americans have been discussing among themselves for years: streamlining environmental review, simplifying labor rules, expanding design-build.
The labor reforms mentioned include exactly one specific case of excessive staffing, reported in the New York Times (and, beforehand, on an off-hand remark by then-MTA Capital Construction chief Michael Horodniceanu), about the number of workers it takes to staff a tunnel-boring machine. The New York Times article goes into more detail about the entire process, but the RPA report ignores that in favor of the one comparison that had been going around Transit Twitter for years. Instead of proposing specifics for reducing headcounts, the report talks about changing the way workers are paid for each day, relying on internal reforms proposed by people dissatisfied with the unions rather than on any external analysis.
The Cycle of Failure
I’ve been reading policy papers for maybe a decade – mostly American, a few Israeli or Canadian or British or French. There’s a consistent pattern in that they often treat the practices of what they view as a peer city or country as obvious examples of what to do. For example, an American policy paper on Social Security privatization might explain the Chilean system, and recommend its implementation, without much consideration of whether it’s really best industry practice. Such papers end up at best moving sideways, and at worst perpetuate the cycle of failure, by giving governments the appearance of reform while they in fact cycle between bad options, or occasionally stumble upon a good idea but then don’t understand how to implement it correctly.
If New York wants to study whether design-build is a good idea, it’s not enough to put it in the list of recommendations. It needs to do the legwork and read what the best experts say (e.g. Melis is opposed to it) and look at many cities at once to see what they do. I would feel embarrassed writing a long report like this with only 7 case studies from outside the US. I’d want to examine many more: on the cheap side, Stockholm, Milan, Seoul, Barcelona, Madrid, Athens, Naples, Helsinki; on the expensive side, London, Singapore, Hong Kong, Toronto, Melbourne, Munich, Amsterdam; in between, Paris, Tokyo, Brussels, Zurich, Copenhagen, Vienna. On anything approaching the RPA’s budget for the paper, I’d connect with as many people in these places as I could in order to do proper comparative analysis.
Instead, the RPA put out a paper that acknowledges the cost difference, but does not make a real effort to learn and improve. It has a lot of reform ideas, but most come from the same process that led to the high construction costs New York faces today, and the rest come from London, whose construction costs would astound nearly everyone in the world outside the US.
One of the things I learned working with TransitMatters is that some outside stakeholders, I haven’t been told who, react poorly to non-American comparison cases, especially non-English-speaking ones. Ignorant of the world beyond their borders, they make up excuses for why knowledge that they don’t have is less valuable. Even within the group I once had to push back against the cycle of failure when someone suggested a nifty-looking but bad idea borrowed from a low-transit-use American city. The group’s internal structure is such that it’s easy for bad ideas to get rejected, but this isn’t true of outside stakeholders, and from my conversation with Tom Wright about Gateway I believe the RPA feels much more beholden to the same stakeholders.
The cycle of failure that the RPA participates in is not the RPA’s fault, or at least not entirely. The entire United States in general and New York in particular is resistant to outside ideas. The political system in New York as well as the big nonprofits forms an ecosystem of Americans who only talk to other Americans, or to the occasional Canadian or Brit, and let bad ideas germinate while never even hearing of what best industry practices are. In this respect the RPA isn’t any worse than the average monolingual American exceptionalist, but neither is it any better.
I ran a Patreon poll about theory-oriented posts, and this option won over the concepts of skin in the game and of cities and assimilation. It came to me when I tried understanding why on several distinct measures of good governance related to urbanism and public transportation, the US is unusually weak by developed-country standards. I was reminded of something regular commenter Max Wyss once said: in French and in German, there’s a word that means “the state” and has positive connotation, whereas in native English use it usually refers to a sinister external imposition.
My main theory is that the US has problems with governance that ultimately stem from its racist history, and these have unrelated implications today that lead to poor urban governance and low transit usage. This is not a straightforward claim about white flight leading to high car use, or even a general claim about racism-poor transit correlation. (I don’t think the US is currently more racist than the average Western European country, and the costs in Europe don’t seem to correlate with my perception of racism levels.) In particular, fixing racism is not by itself going to lead to better transit or better urbanism, only to improvements in quality of government that in the future could prevent similar problems with other aspects of public policy that are yet unforeseen today.
This is a three-step argument. First, I am going to go over the weakness of US civil service and its consequences. Second, I am going to step back and describe the political mentality that leads to weak civil service, which centers the local community at the expense of the state. And third, I am going to relate this and similar examples of excessive localism in the US to the country’s unique history of racism. In effect, I am going to go backward, describing the effect and then looking at its causes.
Effect: Weak State Capacity
The argument is as follows: the US has a weak civil service. There’s relatively little in-house expertise, and weak planning departments. The rapid transit extensions of London and Paris are driven mostly by professional planning departments (Transport for London is especially powerful), with the budgets debated within their respective national parliaments. In contrast, in New York, while Second Avenue Subway was similarly driven by an internal process, other rail extensions were not: the 7 extension is Bloomberg’s project, the ongoing plans for BQX and the LaGuardia AirTrain are de Blasio and Cuomo’s projects respectively, and Gateway in its various incarnations is political football among several agencies and governments. Similarly, while the TGV was developed internally at SNCF with political approval of the overall budget, American plans for high-speed rail involve a melange of players, including consultants.
The more obvious effect of the weakness of the American civil service is that, with political control of planning and not just of the budget, it’s easy to build low-performance infrastructure such as the 7 extension. However, there are three ways in which this problem can increase costs, rather than just lead to poor priorities.
First, it is easier to have agency turf battles. The US has no transport association coordinating planning like STIF in Ile-de-France or any number of German-speaking Verkehrsverbünde (Berlin’s VBB, Zurich’s ZVV, etc.). Even when one agency controls all transit in an area, like SEPTA in Philadelphia or the MBTA in Boston, powerful internal cultures inhibit reforms aiming at treating mainline rail like regular public transit. An instructive example of better civil service is Canada: while Canadian civil service is also weak by Continental European or Japanese standards, it is strong enough that Metrolinx plans to raise off-peak frequency and at least in theory aims at fare integration, over the objections of the traditional railroaders who, like their American counterparts, like the situation as it is today.
Without any structure that gets different agencies to coordinate plans, overbuilding is routine. I blogged about it a few months ago, giving the examples of Gateway and East Side Access in New York and San Jose Diridon Station. A second Bay Area example, not mentioned in the post, concerns Millbrae, where BART holds on to turf it does not need, leading California High-Speed Rail to propose a gratuitous $1.9 billion tunnel: see posts on Caltrain-HSR Compatibility here and here.
Second, there is less in-house supervision of contracting. Brian Rosenthal’s article about Second Avenue Subway’s construction costs talks, among other things, about the lack of internal expertise at the MTA about running large projects. This is consistent with Manuel Melis Maynar’s admonition that project management should be done in-house rather than by consultants; Melis managed to build subways in Madrid for around $60 million per km. It’s also consistent with what I’ve heard from MBTA insiders as an explanation for the cost blowout for Boston’s Green Line Extension, an open-cut light rail so expensive it was misclassified as a subway in a Spanish comparison; as I mention in CityLab, once the MBTA found a good project manager it managed to substantially reduce costs.
Weaker in-house supervision has knock-on effects on procurement practices. An agency that can’t easily oversee the work it pays for has difficulty weeding out dishonest or incompetent contractors. One way around it is strict lowest-bid rules, but these offer dishonest contractors an opportunity to lowball costs; California has a particular problem with change orders. In New York, I’ve heard from several second-hand sources that to prevent contractors from doing shoddy work, the specs micromanage the contractors, leading to more expensive work and discouraging good builders, who can get private-sector work, from bidding. If fewer contractors bid, then there is less competition, increasing cost further. In contrast, Melis Maynar’s prescription is to offer contracts based primarily on the technical score and only secondarily on cost, to ensure quality work. But this requires objective judgment of technical merit, which American bureaucrats are not good at.
And third, the US’s weaker state capacity leads to problems with NIMBY opposition to infrastructure. This does not means the US can’t engage in eminent domain (on the contrary, its eminent domain laws favor the state). But it means that agencies feel like they’re politically at the mercy of powerful local interests, and can’t propose projects with high community impact that they can negotiate with local landowners. The impetus for the SECoast’s hiring me to analyze high-speed rail in Fairfield County is that the NEC Future plan was vague about that area; an insider at one of the NEC Future consultants told me that this was specifically because the consultant was worried about NIMBYism in that part of the state, so an “unspoken assumption” was that the area should not be disturbed.
This kind of preemptive surrender to NIMBYism leads to inferior projects, like agency turf battles: cost-effective solutions are not pursued if consultants are worried about political pushback. But, like agency turf battles, it also leads to higher costs, if the reports propose expensive remediation such as tunnels.
Any attempt to build a strong bureaucracy in the United States runs into entrenched interests, most of which are local. These interests are empowered politically rather than legally. The NIMBYism example is the cleanest case study. The United States does not have a legal regime that empowers NIMBY opposition in eminent domain cases. On the contrary, the state can condemn property with relative ease, and the arguments are over price. Under Kelo, the state can even expropriate land and to give to a private developer.
In contrast, in Japan the process is more difficult: in a 1994 Transportation Research Board paper, Walter Hook says that urban landowners in Japan enjoy strong legal protections, which requires the state to pay a high price for property takings. About 75-80% of the cost of urban highway construction in Japan is land acquisition, versus only 25% in the US (both figures are lower for rail, which is more space-efficient; the paper argues that Japan’s difficult land acquisition led it to favor the more space-efficient mode for its urban transportation network).
Moreover, in Japan as well as in France, property owners have extralegal means of fighting infrastructure: they can take to the streets. The construction of Narita Airport faced riots by landowners, encouraged by leftists who opposed the airport’s use by the US military; and in France, blocking roads is a standard way of protesting, and there is little the state can do against it. SNCF resolves this issue in building high-speed lines for TGVs by spending years negotiating with landowners and coming up with win-wins in which it pays extra to make the owners go away quietly.
With a legally stronger state, the US needs to come up with different ways to protect powerful property owners from arbitrary expropriation. The mechanism the country settled on is political empowerment of local interests. If rich individuals in Fairfield County or on the San Francisco Peninsula can interfere with the construction process, then they can rest assured the state will not be able to build a rail alignment that wrecks their real or imagined quality of life. The point I made repeatedly in my writeup about high-speed rail in Fairfield County (funded by those rich individuals) is that there is some real visual and noise impact, but it’s possible to mitigate it in most cities using noise barriers and trees, and as compensation use the faster tracks to offer faster commuter rail service; only Darien has unmitigable impact.
The same localism encourages agency turf battles. The LIRR, Metro-North, and New Jersey Transit could provide much better rail service in their respective service areas by integrating planning, but this would compel local interests to give up control. Long Islanders would have to interact directly with the Tri-State Area’s transport association, in which they’d be only 12% of the population and 5% of transit ridership; today they interact with planning via their powerful elected representatives, who can block any change that is unfavorable to incumbent riders.
The main losers here are potential riders. It is possible to come up with a win-win (there’s so much schedule padding a local train could be as fast as today’s super-express trains), but it is not possible for any coordinated planning department to credibly promise that the suburbs would retain the priority they have today. For the same reason, even vertically integrated SEPTA and the MBTA find it difficult to engage in integration – the suburbs would lose their special status.
In contrast, planning in France and Britain is more centralized, and the local communities were never so empowered. The two main players in STIF are RATP and SNCF. RATP serves Paris, and SNCF is the national railroad and does not view itself as catering to the suburbs even if those suburbs are the overwhelming majority of SNCF’s ridership. The rich can exercise direct political influence: thus, the state just committed to building the entire Grand Paris Express, despite cost overruns, without pruning the unnecessary airport connector that is Line 17 or the low-ridership favored-quarter suburban circumferential that is Line 18. But they can’t block projects as easily as in the US.
The US achieves democratic checks and balances by having many veto points on every law. In Congress, a law needs majorities in both houses and a presidential signature, or supermajorities in both houses. Moreover, achieving a majority in each house requires not only the support of the majority of legislators, but also the support of the majority of legislators in the majority party (the Hastert Rule). In each state legislature, the process is largely similar. In nonpartisan or effectively single-party legislatures, such as the New York City Council, votes on such local issues as rezoning informally require the approval of the legislator representing the district in question; David Schleicher, who has elsewhere investigated high US subway construction costs, has a paper on this local representative privilege explaining why upzoning is difficult in large cities.
This localism is absent from other democracies. Westminster systems just don’t have checks and balances, only traditions, occasionally supplemented by narrow civil liberties-oriented constitutions like the Canadian Charter of Rights and Freedoms. As a result, Ontario could pass a rent control law overnight; with this regulatory uncertainty, it’s no wonder that for years, even before the law, fearful developers built mostly condos rather than rental units.
In most other democracies, checks and balances instead rely on proportional representation and a multiparty system: laws in Germany or Scandinavia require a parliamentary majority, and restrictions on the government’s ability to pass big changes overnight with no debate come from the ability of class-based and ideological interests to activate entire political parties. Coalition agreements still specify the agenda, roughly equivalent to the Hastert Rule, but parties can freely campaign for changes in elections, reducing the ability of a minority to block change. In some systems, most notably Switzerland, it’s also possible to use referendums to direct spending. This way, local magnates opposed to the expansion of civil service are disempowered, while at the same time the civil service cannot easily use its powers to create internal slush funds, because it is still overseen by a political majority that cares little for corruption.
Ultimate Cause: Democratic Deficit and Racism
The superficial reason why the US prefers localism to civil service is that it is historically localist. New England had powerful town halls from early white settlement, and Americans like to tell themselves that they have a lively tradition of self-government and individualism. But this is incorrect. Israelis in the United States often comment that far from individualist or self-governing, Americans are unusually rule-bound and obedient, compared with not just Israelis but also Europeans.
More to the point, traditions of localism exist in much of Europe. Switzerland is famous for this, and yet it’s managed to develop civil service planning transportation; referendums exert a powerful check on the ability of the state to spend money, but do not micromanage planning, and as a result the state makes cost-effective plans rather than retreating and letting local suburbs decide what to build.
Moreover, most European countries have undergone rounds of municipal consolidation, converting formerly independent suburbs or villages into parts of larger cities or townships. France has uniquely not done so, and is therefore extremely fractionalized, with 30,000 communes, about the same as the number of municipalities in five times more populous America; but in France the communes are for the most part weak, and most subnational government is done by departments and regions. The US, in contrast, maintained its suburbs’ autonomy.
The answer to the question of why the US has done so is simple: racism. Suburban consolidation came to a hard stop once the cities became more diverse than the suburbs. Relying on prior town lines could offer suburban whites something they craved: protection from integration, especially school integration.
It would be difficult to consolidate education policy, even at the state level, and maintain the white middle and working classes’ desired segregation levels. Thus, the US prefers the second-best policy of maintaining localism. The same principle also underlies much election disenfranchisement (giving white poll workers authority to reject black voters’ credentials), today and even more so before the Voting Rights Act.
Transit faces the same issue. The traditional American transit cities’ suburbs have fast expensive trains for middle-class, mostly white suburban commuters to city center, and slow, cheap suburban buses for poor minorities working service jobs in the suburbs. Stephen Smith, who spent some time on the NICE buses on Long Island and compared their demographics with those of the LIRR, calls this “separate and unequal.” This segregation would not survive any coordinated planning; even ignoring racial equality, it’s inefficient.
The underlying cause is that it is very difficult to have a clean herrenvolk democracy. Neither of the two main examples of herrenvolk democracies, the American South in the eras of slavery and Jim Crow and South Africa in the apartheid era, had good government. On the contrary, the antebellum South opposed public infrastructure investment (“internal improvements” in the era’s language), and the Jim Crow South was a single-party state ruled by corrupt political machines. Apartheid South Africa, too, was effectively a single-party state with totalitarian characteristics trying to stamp out communism. The ability of the state to respond to even the white population’s economic and social needs was constrained by the overwhelming need to credibly promise to maintain apartheid. Ta-Nehisi Coates notes this of George Wallace:
I frequently reference the story of George Wallace’s evolution. Wallace was once a sensible politician who generally was seen as fair-minded by black leaders in Alabama. But he lost the gubernatorial election after being tarred by John Patterson as too friendly to black people. Wallace subsequently vowed to never be “out-niggered” again and thus began his long dark march into history.
You know, I tried to talk about good roads and good schools and all these things that have been part of my career, and nobody listened. And then I began talking about niggers, and they stomped the floor.
The only way to maintain racism is to weaken institutions. It’s hard to have a clean system of apartheid justice, because then the oppressed minority can simply demand the state treat it the way it treats the herrenvolk. A state that attempted to impose apartheid with clean government would not be able to credibly promise to the racists that the system would stay as is. Instead, it would need to engage in arbitrary justice, giving individual cops, judges, and juries broad latitude to make decisions, which could survive the end of formal apartheid to some extent.
The Impact of Racism on Property Rights
The US built roads in the 1950s and 60s by running them through low-income black urban neighborhoods. The book The Big Roads says that road planners figured that those areas were already declining and had low property values, so it was cheap to build there; in one tone-deaf example, planners in Washington tried surveying roads after a race riot, figuring that it was the best time to demolish buildings, until outraged civil rights groups put a stop to the process. The problem is that black neighborhoods were cheap because of redlining. The federal government spent 30 years wrecking the property values of black neighborhoods and then acquired property for cheap to build infrastructure for then-white suburban drivers.
For the same reason, there is much less tolerance toward protest in the US than in other democracies. If Americans tried reacting to adverse changes the way the French react, the police would shoot them. If the US engaged in a process to reduce its police brutality rates to levels that Europeans tolerate, black people would be able to free to roam the streets and make racist whites uncomfortable.
Thus, the US refrains from giving property owners any formal legal or extralegal protections from expropriation. Instead, it promises security of property to the middle class by underinvesting in institutions that could come up with bureaucratic rules for expropriation. Legally excluding minorities is difficult; politically excluding them is easy. The natural end of this system is to ensure the locus of protection from expropriation is political rather than legal.
When the US protects individuals from the predations of the state, it does so by letting people sue the government; this contrasts with regulatory protections, such as the Nordic ombudsman system. While suing the government is in theory a legal protection, in practice it depends on familiarity with the court system, which privileges people with connections and legal knowledge. When the state does spend political capital on getting what it wants, some rich individuals can sue indefinitely to delay projects; the poor have no such recourse. While this is partly a legacy of the common law system, indefinite delay by lawsuit is rare in the rest of the common law world, leading to British stereotypes that Americans are overly litigious.
The US is not uniquely racist. Its levels of economic discrimination against minorities seem fairly average to me by developed-country standards. Moreover, the extent of political exclusion of black Americans is arguably the smallest among all large groups of nonwhite minorities in white-majority countries. Barack Obama faced considerably racism as president, but he did win by a fair margin, and for years beforehand the media normalized the idea of a black president (as in the TV show 24 or the film Deep Impact). In contrast, a Muslim French president would be unthinkable. Even the Trump cabinet is more diverse than the Macron cabinet, which has one black member (the minister of sport) and one part-Algerian member (the minister of public accounts); the Clinton, Bush, and Obama cabinets all had minorities in far more senior positions.
However, the US is unique in that it was racially diverse early, requiring its political system to adapt to a state of slavery and subsequently apartheid. Europe, in contrast, formally applies the rules of liberal democratic participation, developed when there were few minorities, to an increasingly diverse electorate. To the extent that European racists are dissatisfied with this arrangement, they try to push for localism as well: British xenophobia borrows rhetoric from American local racism, substituting neo-Confederate dislike for the US federal government for anti-EU sentiments. Similarly, Swiss racists push for rules putting every naturalization to a referendum, ensuring that long-settled white Germans and Italians could naturalize while nonwhites could not.
Conclusion: the Origins and Future of Poor Governance
With the need to maintain apartheid embedded into the American legal and political systems, it had to underinvest in state capacity. A uniform civil service with clear rules would have to treat everyone equally, and if it didn’t, it would be so obvious that civil rights advocates would be able to easily push for change.
For the same reason, the US didn’t design rules that would guarantee security of property to all citizens while allowing the government to function in those cases where expropriation was required. Such rules would equally protect whites and blacks, and allow the black middle class to build wealth on the same terms as whites. Instead, its legal system empowers the state in eminent domain cases and requires individuals to either use their political pull to protect themselves or to attempt to sue the government for just compensation, neither of which option protects unorganized or disempowered communities.
With planning done by ad hoc arrangements and excessive empowerment of local interests, it is difficult to engage in any regional coordination. Even when none of the actors is a racist, or when all relevant communities are white, parochial local interests are stronger than the civil service and have many levers with which they can block change. With a change-averse political system, planning is run by autopilot, keeping traditional arrangements as they are.
Aversion to change, poor coordination, and ad hoc planning all lead to bad government, but are especially deleterious for public transit. Two road agencies that work independently in neighboring jurisdiction could build a single continuous road. Two public transit agencies in the same situation could build a railroad but not operate it. Moreover, with the bulk of spending on roads coming from individual consumers buying cars and fuel, a car-based transportation system is more resilient to bad government than a transit-based one, in which all spending is directed by a transit agency.
It’s hard to have an organization-before-electronics-before-concrete mentality when organization is stymied by the overarching need to maintain white middle-class local autocephaly. The end result is that transit planning departments are too weak to prioritize projects the right way and even to control costs of spending that benefits the white middle class.
None of this was intentional. Racism was of course intentional, but the political compromises between racist and nonracist whites that created American governance as it is today were not intended to wreck American state capacity. They just did so as a side product of guaranteeing the desired levels of political and economic exclusion.
The importance of intent is that reducing the extent of racism in the US in the future, while obviously desirable, is independent of fixing public transit. Some individual bad decisions today, such as Larry Hogan’s cancellation of the Red Line in Baltimore, are directly racist, but a lot of agency turf (such as between different commuter rail agencies) is not, and neither are high construction costs. Fixing the problems of US transit planning requires improving the relevant planning departments, but this is so narrowly-focused as to neither require nor be a natural consequence of fighting racism.
However, there is an entire world out there beyond public transit. When the US built its current racist system, during the midcentury transition period from apartheid to more-or-less equal democracy, probably the most obvious racially charged issue was school integration; the effect on transportation policy was a byproduct. Likewise, if the US makes a concerted effort to move toward racial equality, or if any European country with high immigration rates makes a concerted effort to avoid falling into an American racist trap, the improvements in governance will have far-reaching unforeseen benefits in the future.
It is relatively easy to come up with a database of urban rail lines and their construction costs per kilometer. Construction costs are public numbers, reported in the mass media to inform citizens and taxpayers of the costs of public projects. However, the next step in understanding what makes American construction costs (and to a lesser extent common law construction costs) so high is breaking down the numbers. The New York Times published an excellent investigative piece by Brian Rosenthal looking at why Second Avenue Subway specifically is so expensive, looking at redundant labor and difficulties with contractors. But the labor examples given, while suggestive, concern several hundred workers, not enough for a multibillion dollar cost difference. More granularity is needed.
After giving examples of high US construction costs outside New York, I was asked on social media whether I have a breakdown of costs by item. This motivated me to look at station construction costs. I have long suspected that Second Avenue Subway splurged on stations, in two ways: first, the stations have full-length mezzanines, increasing the required amount of excavation; and second, the stations were mostly excavated from inside the tunnel, with only a narrow vertical access shaft, whereas most subway lines not crossing under older lines have cut-and-cover stations. The data I’m going to present seems to bear this out.
However, it is critical to note that this data is much sparser than even my original post about construction costs. I only have data for three cities: New York, London, and Paris.
In New York, Second Avenue Subway consisted of three new stations: 96th Street, 86th Street, and 72nd Street. Their costs, per MTA newsletters: 72nd Street cost $740 million, 86th Street cost $531 million, 96th Street cost $347 million for the finishes alone (which were 40% of the costs of 72nd and 86th). MTA Capital Construction also provides final numbers, all somewhat higher: 72nd Street cost $793 million, 86th Street cost $644 million, 96th Street cost $812 million. The 96th Street cost includes the launch box for the tunnel-boring machine, but the other stations are just station construction. The actual tunneling from 96th to 63rd Street, a little less than 3 km, cost $415 million, and systems cost another $332 million. Not counting design, engineering, and management costs, stations were about 75% of the cost of this project.
In Paris, Metro stations are almost a full order of magnitude cheaper. PDF-p. 10 of a report about Grand Paris Express gives three examples, all from the Metro rather than GPX or the RER, and says that costs range from €80 million to €120 million per station. Moreover, the total amount of excavation, 120,000 m^3, is comparable to that involved in the construction of 72nd Street, around 130,000 m^3, and not much less than that of 86th Street, around 160,000 m^3 (both New York figures are from an article published in the Gothamist).
A factsheet about the extension of Metro Line 1 to the east breaks down construction costs as 40% tunneling, 30% stations, 15% systems, and 15% overheads. With three stations and a total cost of €910 million over 5 km, this is within the range given by the report for GPX. The tunneling itself is according to this breakdown €364 million. An extension of Line 12 to the north points toward similar numbers: it has two stations and costs €175 million, with all tunneling having already been built in a previous extension. Piecing everything together, we get the following New York premiums over Paris:
Tunneling: about $150 million per km vs. $90 million, a factor of 1.7
Stations: about $750 million per station vs. $110 million, a factor of 6.5
Systems: about $110 million per km vs. $35 million, a factor of 3.2
Overheads and design: 27% of total cost vs. 15%, which works out to a factor of about 11 per km or a factor of 7 per station
Rosenthal’s article documents immense featherbedding in staffing the TBMs in New York, explaining much more than a factor of 1.7 cost difference. This is not by itself surprising: Parisian construction costs are far from Europe’s lowest, and there is considerable featherbedding in operations (for example, train driver productivity is even lower than in New York). It suggests that Paris, too, could reduce headcounts to make tunnel construction cheaper, to counteract the rising construction costs of Grand Paris Express.
But the situation with the stations is not just featherbedding: the construction technique New York chose is more expensive. The intent was to reduce street disruption by avoiding surface construction. Having lived on East 72nd Street for a year during construction, I can give an eyewitness account of what reducing disruption meant: there was a giant shaft covering about half the width of Second Avenue, reducing sidewalk width to 7 feet, between 72nd and 73rd Streets. This lasted for years after I’d moved away, since this method is so expensive and time-consuming. Under cut-and-cover, this disruption would cover several blocks, over the entire length of the station, but it would be finished quickly: the extension of Line 12 is currently in the station digging phase, estimated to take 18 months.
London provides a useful sanity check. Crossrail stations are not cut-and-cover, since the line goes underneath the entirety of the Underground network in Central London. Canary Wharf is built underwater, with 200,000 m^3 of excavation and 100,000 m^3 of water pumped; it’s technically cut from the top, but is nothing like terrestrial cut-and-cover techniques. The cost is £500 million. It’s a more complex project than the comparably expensive stations of Second Avenue Subway, but helps showcase what it takes to build stations in areas where cut-and-cover is not possible.
Another useful sanity check comes from comparing subway lines that could use cut-and-cover stations and subway lines that could not. Crossrail is one example of the latter. The RER A’s central segment, from Nation to Auber, is another: Gare de Lyon and Chatelet-Les Halles were built cut-and-cover, but in the case of Les Halles this meant demolishing the old Les Halles food market, excavating a massive station, and moving the Metro Line 4 tunnel to be closer to the newly-built station. The total excavated volume for Les Halles was about 560,000 m^3, and photos show the massive disruption, contributing to the line’s cost of about $750 million per km in today’s money, three times what Paris spends on Metro extensions. In London, all costs are higher than in Paris, but without such difficult construction, the extension of the Underground to Battersea is much cheaper than Crossrail, around $550 million per km after cost overruns and mid-project redesigns.
The good news is that future subway extensions in the United States can be built for maybe $500-600 million per km rather than $1.5-2 billion if stations are dug cut-and-cover. This is especially useful for Second Avenue Subway’s phase 2, where the segments between the station boxes already exist thanks to the aborted attempt to build the line in the 1970s, and thus cut-and-cover stations could simply connect to already-dug tunnels. It could also work for phases 3 and 4, which cross over rather than under the east-west lines connecting Manhattan with Queens and Brooklyn. The same technique could be used to build outer extensions under Utica and Nostrand in Brooklyn. Among the top priorities for New York, only a crosstown subway under 125th Street, crossing under the north-south line, would need the more expensive station construction technique; for this line, a large-diameter TBM would be ideal, since there would be plenty of space for vertical circulation away from the crossing subway lines.
There would still be a large construction cost premium. Changing the construction method is not enough to give New York what most non-English-speaking first-world cities have: getting down to $200 million per kilometer would require changes to procurement and labor arrangements, to encourage competition between the contractors and more efficient use of workers. Evidently, overheads are a larger share of Second Avenue Subway cost than of Parisian costs. But saving money on stations could easily halve construction costs, and aspirationally reduce them by a factor of three or four.
Four years ago, I broke my comment section by declaring that Elon Musk’s Hyperloop proposal had no merit, combining technical criticism with expressions like “barf ride” and “loopy.” Since then, Musk seems to have quietly abandoned Hyperloop, while the companies attempting to build the technology, run by more serious people, are doing away with the promise of reducing construction costs to one tenth those of conventional high-speed rail. Instead, Musk has moved to a new shiny target in his quest to sell cars and compete with public transit: The Boring Company. I criticized some of what he was saying in Urbanize.LA last summer, but I’d like to go into more detail here, in light of a new fawning interview in Wired and an ensuing Twitter flamewar with Jarrett Walker. In short, Musk,
a) has little understanding of the drivers of tunneling costs,
b) promises reducing tunneling costs by a factor of 10, a feat that he himself has no chance to achieve, and
c) is unaware that the cost reduction he promises, relative to American construction costs, has already been achieved in a number of countries.
The Boring Company’s Ideas of How to Cut Costs
There is much less technical information available publicly than there was for Hyperloop. However, The Boring Company has an FAQ including an outline of how it aims to cut construction costs:
First, reduce the tunnel diameter. The current standard for a one-lane tunnel is approximately 28 feet. By placing vehicles on a stabilized electric skate, the diameter can be reduced to less than 14 feet. Reducing the diameter in half reduces tunneling costs by 3-4 times. Second, increase the speed of the Tunnel Boring Machine (TBM). TBMs are super slow. A snail is effectively 14 times faster than a soft-soil TBM. Our goal is to defeat the snail in a race. Ways to increase TBM speed:
- Increase TBM power. The machine’s power output can be tripled (while coupled with the appropriate upgrades in cooling systems).
- Continuously tunnel. When building a tunnel, current soft-soil machines tunnel for 50% of the time and erect tunnel support structures the other 50%. This is inefficient. Existing technology can be modified to support continuous tunneling activity.
- Automate the TBM. While smaller diameter tunneling machines are automated, larger ones currently require multiple human operators. By automating the larger TBMs, both safety and efficiency are increased.
- Go electric. Current tunnel operations often include diesel locomotives. These can be replaced by electric vehicles.
- Tunneling R&D. In the United States, there is virtually no investment in tunneling Research and Development (and in many other forms of construction). Thus, the construction industry is one of the only sectors in our economy that has not improved its productivity in the last 50 years.
This is not the first time that Musk thinks he can save a lot of money by reducing tunnel diameter; he said the same thing in the Hyperloop paper. Unfortunately for him, there is literature on the subject, which directly contradicts what he says. In my Urbanize piece, I mention a study done for the Very Large Hadron Collider, which compares different tunnel diameters across various soil types, on PDF-p. 5. Two tunnel diameters are compared, 4.9 m (16′) and 3.9 (12′). Depending on soil type and tunnel boring machine (TBM) drive, the larger tunnel, with 1/3 larger diameter, costs 15-32% more.
Subsequent pages in the study break down the costs per item. The TBM itself has a cost that scales with cross-sectional area, but is only a small minority of the overall cost. The study assumes five drives per TBM, with the first drive accounting for 75% of the TBM’s capital cost; in the first drive the larger-diameter tunnel is 32% more expensive, since the TBM accounts for 25-40% of total cost depending on diameter and rock, but in subsequent drives the TBM accounts for about 5% of total cost. Another 6% is muck cars (item 2.05, PDF-pp. 7 and 46), whose cost rises less than linearly in tunnel diameter. The rest is dominated by labor and materials that are insensitive to tunnel width, such as interior lighting and cables.
But the actual cost is even less sensitive to tunnel width. The VLHC study only looks at the cost of tunneling itself. In addition, there must be substantial engineering. This is especially true in the places where transportation tunnels are most likely to arise: mountain crossings (for intercity rail), and urban areas (for urban rail and road tunnels). This is why there’s a trend toward bigger tunnels, as a cost saving mechanism: BART’s San Jose extension is studying different tunnel approaches, one with a large-diameter tunnel and one with twin small-diameter tunnels, and the cost turns out to be similar. In Barcelona, the large-diameter TBM actually saved money and reduced disruption in construction.
The Boring Company’s various bullet points after its point about tunnel diameter are irrelevant, too. For example, labor is a substantial portion of TBM costs, but in the VLHC study it’s about one third of the cost in easier rock and 15% in harder rock. There appears to be a lot of union featherbedding in some American cities, but this is a political rather than technological problem; without such featherbedding, labor costs are not onerous.
Tunneling Costs Aren’t Just Boring
At $10 billion for just 2.2 km of new tunnel, East Side Access is the most expensive urban rail tunnel I am aware of. The second most expensive, Second Avenue Subway’s first phase, costs $1.7 billion per km, not much more than a third as much. Is New York really spending $10 billion on just boring 2.2 km of tunnel? Of course not. The 2 km in Manhattan cost a little more than $400 million, per an MTA status report from 2012 (PDF-p. 7). The few hundred meters in Queens actually cost more, in an unnecessary tunnel under a railyard. The cavern under Grand Central cost much more, as do ancillary structures such as ventilation.
The TBM is probably the most technologically advanced portion of urban tunneling today. Even in New York, in the most expensive project ever built, the TBM itself is only responsible for about $200 million per km; more typical costs, cited in a consultant’s report for Rocky Mountain tunneling, are somewhat less than $100 million per km. This is why large-diameter TBMs are so appealing: they increase the cost of the tunneling itself, but save money everywhere else by allowing stations to be constructed within the bore.
Of course, The Boring Company is not building conventional subways. Subways already exist, and Musk likes reinventing everything from the wheel onward. Instead, the plan is to build tunnels carrying cars. This means several things. First, the capacity would be very low, especially at the proposed speed (Musk wants the cars to travel at 200 km/h – excessive speed is another of his hallmarks).
Second and more importantly, instead of having to deal with expensive subway stations, the infrastructure would have to deal with expensive ramps. Musk wants cars to be lowered into the tunnels with elevators. Underground elevators are cheap (vertical TBMs are easy), but in the proposed application they just move the problem of ramps deeper underground: the elevator (“skate” in Musk’s terminology) would carry the cars down, but then they’d need to accelerate from a standstill to line speed, in new tunnels, separate from the mainline tunnels so as to avoid slowing down through-traffic. Trains solve this problem by making the entire train stop in the tunnel and taking the hit to capacity, and compensating by running a long train with many more people than cars could possibly hold. But roads would need the same infrastructure of urban freeways, underground.
Switching between tunnel trunks poses the same problem. Flying junctions are expensive, especially underground. In New York, they were common on the IND subway, built in the late 1920s and 1930s; the IND was expensive for its time, around $150 million per route-km in today’s money, whereas the Dual Contracts from the 1910s and early 20s (with fewer junctions) were about $80 million per underground route-km. Most subway systems don’t do what the IND did, and instead of complex junctions they build independent lines, switching between them using transfer stations. With cars, this solution is impossible, forcing underground four-level interchanges; even above ground, those interchanges cost well into the 9 figures, each.
There is So Much Musk Doesn’t Know
The starting point of The Boring Company is that Los Angeles’s tunnel construction costs, which the company pegs at a billion dollars per mile, need to be reduced by a factor of ten. This means cutting them from about $600 million per km to $60 million. While there is nothing that Musk or his company has said in public that suggests he is capable of reducing construction costs, other parts of the world have substantially done so already.
In my construction costs posts, there are a few projects in the $60 million/km area. Manuel Melis Maynar, the former CEO of Madrid Metro, wrote a brief report on how he built subways cheaply; in today’s money, the underground parts of Madrid’s 1999-2003 subway expansion cost around $70 million per km, but this includes rolling stock, and without it, actual cost is likely to be where Musk wants it to be. Recent subway lines in Seoul have also been in that area, including Metro Line 9 and the Sin-Bundang Line. Going up to $100 million per km, there are more lines in Stockholm.
Melis Maynar’s writeup ignores any of the technological pizzazz Musk thinks of. Instead of trying to squeeze more power out of TBM, he emphasizes good contracting practices, and separation of design and construction. Like Musk, he believes that faster construction is cheaper, but he is aware that the limiting factor is not boring speed: even at a conservative rate of 15 meters per day, a TBM could excavate several kilometers a year, so it’s better instead to begin construction at several points along the line and work in parallel rather than in sequence. Adding TBMs does not make projects substantially more expensive: one TBM used for East Side Access cost $6-8 million, and other estimates I’ve seen only reach into the 8 figures, for multibillion dollar projects. Nor does adding staging areas raise cost underground, where there are many potential sites; underwater it’s a bigger problem, and there costs are indeed much higher, but nothing that Musk does seems designed around underwater tunnels, and his proposed map for LA road tunnels is underground.
Musk’s Ideas: Loopy and Boring
Americans hate being behind. The form of right-wing populism that succeeded in the United States made that explicit: Make America Great Again. Culturally, this exists outside populism as well, for example in Gordon Gekko’s greed is good speech, which begins, “America has become a second-rate power.” In the late 2000s, Americans interested in transportation had to embarrassingly admit that public transit was better in Europe and East Asia, especially in its sexiest form, the high-speed trains. Musk came in and offered something Americans craved: an American way to do better, without having to learn anything about what the Europeans and Asians do. Musk himself is from South Africa, but Americans have always been more tolerant of long-settled immigrants than of foreigners.
In the era of Trump, this kind of nationalism is often characterized as the domain of the uneducated: Trump did the best among non-college-educated whites, and cut into Democratic margins with low-income whites (regardless of education). But software engineers making $120,000 a year in San Francisco or Boston are no less nationalistic – their nationalism just takes a less vulgar form. Among the tech workers themselves, technical discussions are possible; some close-mindedly respond to every criticism with “they also laughed at SpaceX,” others try to engage (e.g. Hyperloop One). But in the tech press, the response is uniformly sycophantic: Musk is a genius, offering salvation to the monolingual American, steeped in the cultural idea of the outside inventor who doesn’t need to know anything about existing technology and can substitute personal intelligence and bravery.
In reality, The Boring Company offers nothing of this sort. It is in the awkward position of being both wrong and unoriginal: unoriginal because its mission of reducing construction costs from American levels has already been achieved, and wrong because its own ideas of how to do so range from trivial to counterproductive. It has good marketing, buoyed by the tech world’s desire to believe that its internal methods and culture can solve every problem, but it has no product to speak of. What it’s selling is not just wrong, but boringly so, without any potential for salvaging its ideas for something more useful.
This is a touched-up version of an article I tried publishing earlier this year, changed to be more relevant to regular blog readers, who know e.g. what Gateway is.
I’ve talked a lot about high rail construction costs in the US, especially in New York: see here for a master list of posts giving cost figures, and here and here for posts about things that I do not think are major reasons. In this post, I’d like to talk about one thing that I do think is relevant, but not for every project: agency turf battles.
The German/Swiss planning slogan, organization before electronics before concrete, means that transit agencies should first make sure all modes of public transit are coordinated to work together (organization) before engaging in expensive capital construction. In the US, most urban transit agencies do this reasonably well, with integrated planning between buses and trains (light rail or subway); there’s a lot of room for improvement, but basics like “don’t run buses that duplicate a subway line” and “let people take both buses and subways on one ticket” are for the most part done. Readers from the San Francisco Bay Area will object to this characterization, but you guys are the exception; New York in contrast is pretty good; Chicago, Boston, and Philadelphia are decent; and newer cities run the gamut, with Seattle’s bus reorganization for its light rail being especially good.
But then there’s mainline rail, with too many conflicting agencies and traditions. There is no place in the US that has commuter rail and successfully avoids agency turf battles, even regions where the integration of all other modes is quite good, such as New York and Boston. I have complained about this in Philadelphia, and more recently criticized the RPA’s Fourth Regional Plan for letting Long Island claim the East River Tunnels as its own fief.
But all of this pales compared with what is actually going on with the Gateway tunnel. The New York region’s political leaders have demanded funding for a $25 billion rail tunnel between New York Penn Station and New Jersey. When Donald Trump had just won the election, Schumer proposed Gateway as a project on which he could cooperate with the new president; Booker got some federal money earlier, in the Obama administration.
The circumstances leading to the Gateway announcement are themselves steeped in inter-agency intrigue. Gateway is the successor to an older scheme to build a rail tunnel under the Hudson, called ARC. In 2010, Chris Christie acquired some notoriety for canceling it as construction started.
Earlier, in 2003, Port Authority studied three ARC alternatives. Alt P would just serve Penn Station with a new cavern adding more terminal tracks; Alt G would serve Penn Station and build a new tunnel connecting to Grand Central; Alt S would serve Penn Station and build a new tunnel to Long Island, at Sunnyside. The three options each cost about $3 billion, but Alt G had the highest projected ridership. Alt G had the opportunity to unite New Jersey Transit’s operations with those of Metro-North. Instead, Alt P was chosen, and the cavern was involved in the cost escalations that led Christie to cancel the project, saying the then-current budget of $9 billion would run over to $12.5 billion.
It is hard to say why Port Authority originally chose Alt P over Alt G. Stephen Smith spent years sending freedom of information requests to the relevant agencies, but never received the full study. Agency turf battles between New Jersey Transit and Metro-North are not certain, but likely to be the reason.
I talked to Foster Nichols a few months ago, while researching my Streetsblog piece criticizing the RPA plan for kowtowing to Long Island’s political demands too much. Nichols oversaw the reconstruction of Penn Station’s LIRR turf in the 1990s, which added corridors for passenger circulation and access points to the tracks used by the LIRR; he subsequently consulted on the RPA plan for Penn Station. Nichols himself supports the current Gateway plan, which includes the $7 billion Penn Station South complex, but he admitted to me that it is not necessary, just useful for simplifying planning. The Pennsylvania Railroad designed Penn Station with provisions for a third tunnel going east under 31st Street, which Alts S and G would leverage; Alts S and G are still possible. The one caveat is that the construction of Sixth Avenue Subway, decades after Penn Station opened, may constrain the tunnel profile – the ARC documents assumed locomotive-friendly 2% grades, but with EMU-friendly 4% grades it’s certainly possible.
With this background, I believe Alt G was certainly feasible in the mid-2000s, and is still feasible today. This is why I keep pushing it in all of my plans. It’s also why I suspect that the reason Port Authority decided not to build Alt G was political: the hard numbers in the study, and the background that I got from Nichols, portray Alt G as superior to Alt P. The one complaint Nichols had, track capacity, misses the mark in one crucial way: the limiting factor is dwell times at Penn Station’s narrow platforms, and having two Midtown stations (Penn Station and Grand Central) would allow trains to dwell much less time, so if anything capacity should be higher than under any alternative in which trains only serve one of the two.
The upshot is that Christie had legitimate criticism of ARC; he just chose to cancel it instead of managing it better, which Aaron Renn called the Chainsaw Al school of government. After Christie canceled ARC, Amtrak stepped in, creating today’s Gateway project. Even without the cavern, Gateway’s estimate, $13.5 billion in 2011, was already higher than when Christie canceled ARC; it has since risen, and the highest estimate I’ve seen (by Metro, so caveat emptor) is $29 billion. This includes superfluous scope like Penn South, which at one point was supposed to cost $6 billion, but more recently Nichols told me it would be $7 billion.
While bare tunnels would provide the additional capacity required at lower cost, they would require interagency cooperation. Amtrak, New Jersey Transit, and the LIRR would need to integrate schedules and operations. Some trains from New Jersey Transit might run through to the east as LIRR trains and vice versa. This would make it easier to fit traffic within the existing station, and only add bare tunnels; the Penn Station-Grand Central section, at the southern end of the station, would keep dwell times down by having two Midtown stations, and the section connecting New Jersey Transit with Long Island (probably just Penn Station Access and one LIRR branch, probably the Port Washington Branch) would have 8 station tracks to play with, making dwell times less relevant. Unfortunately, this solution requires agencies to share turf, which they won’t – even the Penn Station concourses today are divided between Amtrak, New Jersey Transit, and LIRR zones.
Gateway is not the only rail project suffering from cost blowouts; it is merely the largest. The LIRR is building East Side Access (ESA), to connect to Grand Central; right now, it only serves Penn Station. ESA uses an underwater tunnel built in the 1960s and 70s to get to Manhattan, and is now boring a 2 km tunnel to Grand Central, at a cost of $10 billion, by far the most expensive rail tunnel in the world per unit length. But the tunnel itself is not the biggest cost driver. Instead of having the LIRR and Metro-North share tracks, ESA includes a deep cavern underneath Grand Central for the LIRR’s sole use, similar to the one in ARC that Christie canceled. About $2 billion of the cost of ESA is attributed to the cavern alone.
Agency turf wars are not unique to New York. In California, the same problem is driving up the costs of California HSR. In inflation-adjusted dollars, the project’s cost has risen from $33 billion in 2008 to $53 billion today. Most of the overrun is because the project includes more tunnels and viaducts today than it did in 2008. Much of that, in turn, is due to conflicts between different agencies, especially in the San Francisco Bay Area. The worst example is San Jose Diridon Station.
Diridon Station is named after still-living former California HSR Authority board member Rod Diridon, previously responsible for the disaster that is VTA Light Rail, setting nationwide records for low ridership and poor cost recovery. The station’s main user today is Caltrain. California HSR is planned to serve it on its way between Los Angeles and San Francisco, while Caltrain and smaller users plan to grow, each using its own turf at the station. The planned expansion of track capacity and new viaducts for high-speed rail is estimated to cost about a billion dollars. Clem Tillier calls it “Diridon Pan-galactic” and notes ways this billion-dollar cost could be eliminated, if the users of the stations shared turfs. Clem identifies $2.7 billion in potential savings in the Bay Area through better cooperation between high-speed rail, Caltrain, and other transit systems.
It is not a coincidence that the worst offenders – Gateway, East Side Access, and California High-Speed Rail – involve mainline rail. American and Canadian passenger railroads tend to be technologically and managerially conservative. Most still involve conductors punching commuter tickets as they did in the 1930s; for my NYU presentation, I found this picture from 1934.
I suspect that this comes from a Make Railroading Great Again attitude. Old-time railroaders intimately understand the decline of mainline rail in the United States in the middle third of the 20th century, turning giants like the Pennsylvania Railroad into bankrupt firms in need of federal bailouts. This means that they think that what needs to be done is in line with what the railroads wanted in the 1920s, 30s, 40s, and 50s. Back then, people lived in the suburbs and commuted downtown at rush hour, so there was no need for intra-suburban service, for in-city stops (those were for working- and middle-class city residents, not rich suburbanites in Westchester), or for high off-peak frequency. There was no need for cooperation between different railroads then, since commuters would rarely need to make an onward connection, which led to a culture encouraging competition over cooperation.
Among all the explanations for high construction costs, turf battles is the single most optimistic. But Americans should be optimistic about building cost-effective passenger rail. If this is the main culprit – and it is in the Bay Area, and one of several big culprits in New York – then all it takes to fix the cost problem is bringing organizational practices to the 21st century, which is cheap. It is too late for East Side Access, but it is possible to drastically reduce the cost of Gateway by removing unnecessary items such as Penn Station South. This can be repeated for smaller projects in the San Francisco Bay Area and everywhere in the US where two separate transit agencies fight over station space.
Am I optimistic that Americans will actually do this? I am not. Even outfits that should know better (again, the RPA) seem too conservative and too politically constrained; the RPA is proposing systemwide integration in its Fourth Plan, but in a way that incorporates each player’s wishlist rather than in a way that uses integration to reduce capital investment needs. In California, the HSR Authority seems to be responding to demands for value engineering by procrastinating difficult decisions, and it comes down to whether in the moment of truth it will have politicians in the state and federal governments who are willing to pay billions of dollars of extra money.
However, I do think that a few places might be interested in running public transit better. Americans are not incorrigible, and can learn to adapt best industry practices from other countries, given enough pressure. From time to time, there is enough pressure, it’s just not consistent enough to ensure the entire country (or at least the most important transit cities, led by New York) modernizes.
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.
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.