We are happy to announce that on Sunday the 29th of August we will hold this year’s Modernizing Rail conference, on the heels of the success last year.
Please register using this form. And please give details on what you’d like to see, and if you’re willing to lead sessions – the schedule of the breakout sessions is still up in the air depending on popular demand. Even the number of breakouts depends on how many registrants we get, compared with the about 200 we had last year. Perhaps the news of the infrastructure bill will tilt the demand toward more political sessions regarding how to ensure what is built is good and less toward technical best practices.
Our keynote is certainly political: Rep. Seth Moulton (D-MA), who represents the northern suburbs of Boston (6th district) and for years has been pushing the North-South Rail Link. He will give brief remarks at 16:00 Eastern time, or 22:00 Central Europe Summer Time, to be followed by a Q&A; if you have a question that you’d like to hear an answer to, you can mention it in the registration form, or email the organizing committee at firstname.lastname@example.org. We will be taking questions throughout the conference, which will start 11:00 Eastern, so if your questions depend on what you hear at the breakouts, you’re in luck.
After my last post on poor timetabling in the New York area, I got a lot of feedback comparing New York’s zonal system with existing high-quality commuter rail networks. Some of it was in comments, but most interesting was a post by the pseudonymous socialist Emil Seidel, who compares the situation in New York with that of Munich.
I’m going to go over some best practices here – this is not intended as a highlight of poor American practices. That said, because of the application to New York, I’m going to go over Paris and Tokyo, as they’re both very large cities, in addition to cleaner German examples, including Berlin (where I live), Nuremberg (where Herbert in comments lives and where a Twitter commenter pointed out express service), and finally Emil’s example of Munich.
The upshot is that yes, commuter trains do often have express service, and it’s common for the express service to run local on an outer segment and then express closer in. However, this is not really the New York zone theory. Most importantly, high-quality local service always comes first, and everything else is an overlay. This is common to all of the examples we will look at, and is the most fundamental fact of commuter rail: S-Bahn service is urban rail on mainline tracks.
Infrastructure for local trains
Local service always comes first, ahead of any longer-range regional service. This can be readily seen in infrastructure allocation: in all examples I know of in the German-speaking world, Paris, and Tokyo, when there’s scarce infrastructure built for through-service, local trains get it ahead of longer-range regional ones.
- In Paris, the RER is defined as what runs through on newly-built tunnels, whereas Transilien service terminates at one of the historic terminals of Paris. This distinction is fundamental and precedes other distinctions, such as frequency – there are sections of Transilien H, J, and L that have higher frequency than some RER branches. And where the two systems run side-by-side, the RER is the more local one.
- In Germany, newly-built tunnels are for S-Bahn service. For example, in Munich, the S-Bahn gets to use the tunnel, while other trains terminate on the surface; this is also the case in Frankfurt, Stuttgart (until the upcoming Stuttgart 21), and Berlin (until the North-South Main Line opened).
- In Zurich, there are two through-tunnels under Hauptbahnhof. The older one is used principally by the S-Bahn; the newer one is used by the S-Bahn as well as longer-distance trains. But many long-distance trains stay on the surface.
- In Tokyo, local commuter trains get preference in JR through-running. The original set of through-tracks at Tokyo Station was used for local trains on the Yamanote and Keihin-Tohoku Line, while faster, longer-distance regional trains were demoted, and through-running ceased entirely when the Shinkansen took their space in the 1990s. Regional trains only resumed through-running when the Ueno-Tokyo Line opened in 2015. The Shinkansen’s use of space over regional train is justified because it serves large secondary cities in the Tohoku region and not just suburbs.
Timetabling for local trains
Local trains are also the most important priority for high frequency. In all of the five example cities for this post, local frequency is high, even on branches. In Tokyo and Paris, the trunks don’t really run on takts; Japan and France overall have less rigid takts than Germany but do have off-peak takt patterns, it’s just not very important to passengers when a train on the RER A or the Chuo Line comes every 4-5 minutes off-peak.
Elsewhere, there are takts. There are also takts on the branches in Paris. Typical frequencies are a train every 10, 15, or 20 minutes; they may be lower on outer branches, especially ones that are operationally half-branches, i.e. branches of branches like the two halves of S1 and S2 in Munich. All of this depends on city size; Berlin is bigger than Munich, which is bigger than Nuremberg.
- In Berlin, S-Bahn branches run every 10 or 20 minutes, but the ones running every 10 usually have short-turning variants, so the outer portions only get 20-minute service. The outer ends of 10-minute service – Spandau, Buch, Frohnau, Friedrichshagen, Teltow Stadt, Grünau – tend to be 15-18 km from the center, but one, Potsdam, is almost 30 km out.
- In Munich, S-Bahn branches likewise run every 10 or 20 minutes at rush hour, with some tails that have ugly 40-minute headways. Off-peak, the numbered branches run every 20 minutes.
- In Nuremberg, frequency is weaker, as it is a small city. But S2 has a 20-minute takt up to Schwabach, about 15 km out.
Let us now compare larger cities. Just as Berlin has higher frequency at a given radius than Munich and Nuremberg, so does Paris have even higher frequency, and Tokyo yet higher. On the RER A, branches run every 10 minutes all day; Marne-la-Vallée, home to Disneyland Paris as well as a suburban office park, sees trains every 10 minutes off-peak, 37 km outside city center. At the other end, Cergy sees a train every 10 minutes all day at similar distance, and at rush hour this rises to 5 minutes, but half the trains run on Transilien L rather than the RER.
Some of these Parisian RER trains run express. The RER B, off-peak, has a pattern with three services, each running every 15 minutes: at each end these go minor branch (Robinson or Mitry-Claye), major branch express (major stops to Massy and then local to Saint-Rémy or nonstop to CDG), major branch local (local to Massy or CDG). So yes, nonstop trains exist, in the special context of an airport, but local trains still run every 15 minutes as far as 20-30 km from city center. At rush hour, frequencies rise and there’s no more room for express trains to the north, so trains run every 6 minutes to each of CDG or Mitry, all local: local service always comes first.
Tokyo has even higher local frequency. Rapid lines tend to have their own dedicated pair of tracks, there is so much traffic. For example, the Chuo Line has four tracks to Mitaka: the local tracks carry the Chuo-Sobu Line, and the express tracks carry the Chuo Rapid Line farther out. Both patterns are very frequent.
What Tokyo does have is a melange of express services with names like Special Rapid, Limited Express, or Liner. However, they are timetabled around the local services, or the regular rapid ones if there’s a rapid track pair as on Chuo, even in environments with competition between private railways for commuter traffic. The Chuo Rapid Line’s basic pattern, the vanilla rapid, runs irregularly every 3-8 minutes off-peak, with Special Rapid trains making limited stops timetabled around those, with timed overtakes at major stations. Thus frequency stays very high even as far out as Tachikawa, 37.5 km from Tokyo Station. Moreover, at rush hour, where frequency is denser, there is less, sometimes no, special express service.
Timetabling for express trains
All of our five example cities have express trains. In Berlin, Munich, and Nuremberg, they’re branded as RegionalBahn, distinct from the S-Bahn. In Paris, some RER trains run express, but mostly Transilien provides extra express service. In Tokyo, it’s all branded as part of the Kanto area commuter rail network. This is the core of Emil’s argument: express service exists in Germany, but has separate branding.
Nonetheless, there are best practices for how to do this. In Jarrett Walker’s bus-based terminology, it is better to run limited, that is make major stops, than to run express, that is have long nonstop sections from outer areas to city center. Sometimes patterns are somewhat of a hybrid, like on some New York subway lines, but the basic principle is that regional trains never skip major stations.
- In Berlin, the Stadtbahn, built in the 1880s, has four tracks, two dedicated to local S-Bahn trains and two to everything else. Intercity trains on the Stadtbahn only stop at Hauptbahnhof and Ostbahnhof, but regional trains make roughly every other S-Bahn stop. Elsewhere, some stations are never missed, like Lichtenberg and Wannsee. Note also that as in Paris, Berlin likes its airport express service, branded FEX, which skips the RegionalBahn station and S-Bahn branch point Schöneweide.
- In Munich, some RegionalBahn services express from the S-Bahn terminal, where they always stop, to Hauptbahnhof; some also make a few stops on the way. It depends on the line – Dachau and Laim are both popular RegionalBahn stops.
- In Nuremberg, I encourage people to look at the map. Express trains abound, at fairly high frequency, each named service running hourly, and they always make certain major stations like Erlangen and Fürth.
The stopping pattern can be more local once there’s no S-Bahn, but it’s not really local. For example, at both ends of Berlin’s RE 1, a half-hourly regional line between Brandenburg an der Havel and Frankfurt an der Oder with half the trains continuing west to Magdeburg and south awkwardly to Cottbus, there are stops spaced 7-10 km apart between the built-up area of Berlin-Potsdam and those of Brandenburg and Frankfurt.
In Paris and Tokyo, similarly, express trains stop at major stations. The RER B’s express pattern does run nonstop between Gare du Nord and CDG, but to the south of Paris, it makes major stops like Bourg-la-Reine rather than trying to run nonstop from Massy to Paris; moreover, the RER trains make all stops within the city core, even neighborhood stops like Cité-Universitaire or Nation. Tokyo’s Special Rapids likewise stop at major stations like Kokubunji, and don’t run nonstop from outer suburban branches to Shinjuku and Tokyo.
What this means for New York
New York does not run its commuter rail in the above way. Not even close. First, local frequency is weak. The pre-corona timetables of the New Haven and Harlem Lines have 30-40 minute gaps at rush hour at radii where Berlin still has some 10-minute service. Off-peak the schedule is more regular but still only half-hourly. Hourly S-Bahn systems exist, for example in Mannheim, but those are mocked by German railfans as not real S-Bahns but barely upgraded regional rail systems using the term S-Bahn for marketing.
And second, express trains are not designed to provide an express overlay on top of local trains with transfers where appropriate. When they’re zoned, they only make a handful of stops at rush hour and then express, often without overlapping the next zone for a transfer. This is the case even where the infrastructure is a four-track line set up for more normal express service: the Hudson Line is set up so that Ossining, Tarrytown, and Yonkers have express platforms, but its timetable largely ignores that in favor of long nonstops, with 20-minute gaps at Yonkers.
In the future, it is critical to focus on a high-quality local takt, with frequency depending on city size. In Boston, a Berlin-size city, the TransitMatters plan calls for a 15-minute takt, sometimes 10 minutes, generally as far out as 20-30 km. But New York is a larger city, and needs 5 minutes within the city and 10 well into suburbia, with a strong local schedule that express trains can go around if appropriate. S-Bahn service, by whatever name or brand it has, is always about using mainline infrastructure to operate urban rail and extend the city into the suburbs.
The ideal use of a politically-determined, external infusion of funds into public transit is for a capital expansion that is not critical. The service provided should be of great usefulness – otherwise, why fund it? – but it should fundamentally be not a safety-critical package, which should be funded locally on an ongoing basis. The best kind of project is one with a high one-time capital cost and long-term benefits, since a debt-issuing sovereign state can borrow cheaply and obtain the financial and social return on investment without much constraint.
Outside infusions, such as from a stimulus bill or an infrastructure package, are best used on expansion with short-term costs and long-term benefits. This includes visible projects that extend systems but also ones that reduce long-term operating and maintenance costs. For examples:
- High-speed rail: it’s operationally profitable anywhere I know of, and then the question is whether the ROI justifies the debt. Because a one-time cost turns into a long-term financially sustainable source of revenue, it is attractive for outside investment.
- Railstitution of a busy bus route, or burial of a busy tramway. This produces a combination of lower operating expenses and better service for passengers. The only reason not to replace every high-ridership city bus with a subway is that subways cost money to build, but once the outside infusion of money comes, it costs less to run a modern rapid transit system, or even a not so modern one, than a bus system with its brigades of drivers.
- Rail automation.
- Speed-up of a rail route to higher standards and lower maintenance costs.
The importance of non-critical projects
Critical projects are not good for a stimulus bill. The reason is that they have to be done anyway, and the process of stimulus may delay them unacceptably, as a local government assumes it will get an infusion of funds and does not appropriate its own money for it. The upshot is that a rational federal funding agency should be suspicious of a local or state agency that requests money for critical projects, especially safety-critical ones.
The point here is that the stimulus process is inherently political. It does not involve technical decisions of what the optimal kind of public transportation policy should be. It instead pits infrastructure investments against other budget priorities, like the military, holding down tax rates, or health care. It’s not meant to be predictable to the transportation expert, and only barely to the political insider. It depends on political vagaries, the state of the economy, and petty personal decisions about priorities.
Thus, an agency that asks for stimulus funds for a project sends (at least) one of two messages: “we think this project is great but if it’s not built people aren’t going to literally die,” or “we are run by incompetent hacks.” In the former case, the point of a benefit-cost analysis is that neither the costs nor the benefits are existential: the project is not safety-critical nor critical to the basic existence of the system, but the budget is not existential to the budget either and if it is wasted then the government will not go bankrupt.
I propose that transportation agencies hire people whose job is to keep abreast of global developments in the field and report on best practices.
Which agencies should do it?
Ideally, all urban ones. Very small ones should piggyback on large ones, or participate in metropolitan planning to increase the scale. National agencies could aid this by having their own larger offices, but each urban or metropolitan agency should keep a best practices expert for issues relevant to the specific local context.
How big should the team be?
Normally, only one person is required. A larger team may be necessary for language coverage. In Germany, one English-speaking person could interface with every agency in Europe – even in relatively monolingual places like Spain and Italy, enough experts speak English that it’s possible to work without learning the local language. However, East Asia is largely monolingual, and interfacing with experts in Japan, South Korea, Taiwan, and China is harder in English. Moreover, reading local debates and contracts should be done in the local language even in multilingual countries like the Netherlands and Sweden.
So since language coverage is needed, larger agencies should keep teams of sufficient size. It’s not possible to have full coverage, but, again, English is decent in a pinch. A team of about 5 should be fine, especially if the language coverage is random enough that nearby agencies are likely to only partially overlap; for example, if Berlin’s team includes a Japanese speaker and Hamburg’s includes a Chinese speaker, they can learn secondarily.
No large internal hierarchy is required. Not counting language issues, one person could do this. With full language accounting, as required for agencies the size of NYCT, TfL, or RATP, the team may have a director and a few reports, but the reports should still be paid as experienced professionals and have direct access to agency managers.
What are the team’s responsibilities?
- Keep abreast of global developments through reading trade publications, following media in relevant countries so as to know whether a proposed solution is locally considered a success or not, and keeping track of how relevant agencies introduce new technology.
- Go to international conferences to form horizontal relationships with peers and acquire more detailed knowledge of new methods, and follow up to discuss specifics with them.
- Connect local decisionmakers with peers elsewhere in order to discuss how to adapt outside innovations to the local social and political context.
Who should be hired?
People who are likely to have the required knowledge. Horizontal hiring from other agencies is especially valuable, especially agencies from other cultures, where existing hiring is less likely to happen. American agencies occasionally hire Brits and Canadians, so it’s valuable to hire people with Asian, Continental European, or Latin American agency experience for this team.
Such people tend to be mobile, and if they leave to another agency, that’s fine. Often, the most valuable thing is a person who one can email and ask “in Barcelona, how do you do maintenance on the Cercanías?” (and that’s a high-level question, there are more detailed questions at lower zoom level than our work on costs). A former employee who moved on to another agency is always going to remain such a point contact, provided they left on good terms.
To the extent high-wage countries underlearn from lower-wage ones, they have an easier time hiring this way. Junior engineers in Italy earn less than 2,000€/month after taxes; Northern European and American agencies can poach them with better pay.
Robert Jackel asked me an excellent question in comments: what is a pulse? I’ve talked about timed transfers a lot in the last almost 10 years of this blog, but I never wrote a precise definition. This is a critical tool for every public transportation operation with more than one line, making sure that trains and buses connect with as short a transfer window as possible given other constraints. Moreover, pulse-oriented thinking is to plan capital investment and operations to avoid constraints that make transfers inconvenient.
When are pulses needed?
Passengers perceive the disutility of a minute spent transferring to be more than that of a minute spent on a moving vehicle. This is called the transfer penalty and is usually expressed as a factor, which varies greatly within the literature. In a post from 2011 I quoted a since-linkrotted thesis with pointers to Boston and Houston’s numbers, and in a more recent post I found some additional literature in a larger variety of places, mostly in the US but also the Netherlands. The number 2 is somewhere in the middle, so let’s go with this.
Observe that the transfer penalty measured in minutes and not in a factor is, naturally, larger when service runs less frequently. With a factor of 2, it is on average equal to the headway, which is why it is likely the number is 2 – it represents actual time in the worst case scenario. The upshot is that the value of an untimed transfer is higher the higher the frequency is.
I used the principle of untimed transfers and frequency to explain why small subway networks do not look like small bus networks – they have fewer, more frequent lines. Subway lines that run every 3-4 minutes do not need transfer timing, because the time cost of an untimed transfer is small compared to the likely overall trip time, which is typically in the 15-30 minute range. But the lower the frequency, the more important it is to time transfers. Thus, for example, Berlin times the U6/U7 transfer at Mehringdamm in the evening, when trains run every 10 minutes, but does not do so consistently in the daytime, when they run every 5.
But note: while the value of an untimed transfer is higher at higher frequency, the value of a timed transfer is the same – it is zero-penalty or close to it no matter what. So really, the relative value of timing the transfer decreases as frequency increases. But at the same time, if frequency is higher, then more passengers are riding your service, which justifies more investment to try to time the transfer. The German-speaking planning tradition is the most concerned with transfer timing, and here, it is done commonly at 10 minutes, occasionally at 5 minutes, and never that I know of at higher frequency.
Easy mode: one central station
If all your buses and trains serve one transit center, then a pulse means that they all run at the same frequency, and all meet at the center at the same time. This doesn’t usually happen on urban rail networks – a multi-line urban rail system exists in a high-ridership, high-frequency context, in which the value of serving a mesh of city center lines is high, and the cost of bringing every subway tunnel to one location is high. Instead, this happens on buses and on legacy regional rail networks.
The pulse can be done at any frequency, but probably the most common is hourly. This is routine in small American towns with last-resort bus networks serving people too poor or disabled to drive. Two and a half years ago a few of us on Transit Twitter did a redesign-by-Twitter of the Sioux City bus network, which has ten bus routes running hourly, all pulsing in city center with timed connections. A similar network often underlies the night buses of a larger city that, in the daytime, has a more complete public transport network, such as Vancouver.
Even here, planners should keep two delicate points in mind. First, on buses in mixed traffic, there is an upper limit to the frequency that can be timetabled reliably. The limit depends on details of the street network – Jarrett Walker is skeptical that timetabling buses that run every 15 minutes is feasible in a typical American city, but Vancouver, with no freeways within a city and a rich arterial grid, manages to do so every 12 minutes on 4th Avenue. A half-hourly pulse is definitely possible, and even Jarrett writes those into his bus redesigns sometimes; a 20-minute pulse is probably feasible as well even in a typical American city. The current practice of hourly service is not good, and, as I point out in the Sioux City post, involves slow, meandering bus routes.
The second point is that once the takt is chosen, say half an hour, the length of each roundtrip had better be an integer multiple of the takt, including a minimal turnaround time. If a train needs 5 minutes to turn, and runs half-hourly, then good times for a one-way trip from city center are 10, 25, 40, 55 minutes; if there is no turnaround at city center, for example if there is through-running, then half as many turnarounds are needed. This means that short- and long-term planning should emphasize creating routes with good trip times. On a bus, this means straightening meanders as needed, and either extending the outer end or cutting it short. On a train, this means speedup treatments to run as fast as necessary, or, if the train has a lot of spare time, opening additional infill stops.
The issue of branching
Branches and pulses don’t mix well. The ideal way to run a system with a trunk and branches is to space the branches evenly. The Berlin S-Bahn runs every 3-4 minute on the Stadtbahn trunk and on the North-South Tunnel, mixing services that run every 10 and 20 minutes at roughly even intervals. In such an environment, timed transfers in city center are impossible. This is of course not a problem given Stadtbahn headways, but becomes serious if frequency is sparser. A one-trunk, two-branch regional rail system’s planners may be tempted to run each branch every half hour and interpolate the schedules to create a 15-minute headway on the trunk, but if there’s a half-hourly pulse, then only one branch can participate in it.
This is visible when one compares S-Bahn and RegionalBahn systems. High-frequency S-Bahn systems don’t use timed transfers in city center, because there is no need. I can get from Jannowitzbrücke to Ostkreuz without consulting a schedule, and I would get to the Ring without consulting a schedule either, so there is no need to time the crossing at Ostkreuz. There may be sporadic transfer timing for individual branches, such as between the S9 branch of the Stadtbahn, which diverts southeast without serving Ostkreuz, and the Ring, but S9 runs every 20 minutes, and this is not a pulse, only a single-direction timed connection.
In contrast, RegionalBahn systems, running at longer ranges and lower frequencies, often tend toward timed transfers throughout. The tradeoff is that they don’t overlie to create high-frequency trunks. In some cases, trains on a shared trunk may even platoon, so that all can make the same timed transfer, if high trunk frequency is not desired; this is how intercity trains are run on the Olten-Bern line, with four trains to a platoon every 30 minutes.
Medium mode: dendritic networks
A harder case than the single pulse is the dendritic network. This means that there is a central pulse point, and also secondary pulse points each acting as a local center. All cases I am aware of involve a mainline rail network, which could be S-Bahn rather than RegionalBahn, and then bus connections at suburban stations.
Already, this involves more complex planning. The reason is that the bus pulse at a suburban station must be timed with trains in both directions. Even if planners only care about connections between the suburban buses and trains toward city center, the pulse has to time with inbound trains for passengers riding from the suburban buses to the city and with outbound trains for passengers riding from the city to the buses. This, in turn, means that the trains in both directions must arrive at the station at approximately the same time. A few minutes of leeway are acceptable, since the buses turn at city center so the connection always has a few minutes of slack, but only a few minutes out of what is often a half-hourly takt.
Trains that run on a takt only meet every interval equal to half the takt. Thus, if trains run half-hourly, they can only have suburban pulses every 15 minutes of travel. This requires planners to set up suburban pulses at the correct interval, and speed up or sometimes slow down the trains if the time between suburban nodes. Here is an example I’ve worked on for a Boston-Worcester commuter train, with pulses in both Framingham and Worcester.
Hard mode: meshes
The next step beyond the dendritic network is the multi-node network whose graph is not simply connected. In such a network, every node must have a timed transfer, which imposes considerable planning constraints. Optimizing such a network is an active topic of research in operations and transportation in European academia.
Positive examples for such networks come from Switzerland. Large capital investments are unavoidable, because there’s always going to be some line that’s slower than it needs to be. The key here is that, as with dendritic networks, nodes must be located at consistent intervals, equal to multiples of half the headway, and usually the entire headway. To make multiple timed transfers, trains must usually be sped up. This is why pulse-based integrated timed transfer networks require considerable planning resources: planning for rolling stock, infrastructure, and the timetable must be integrated (“the magic triangle”) to provide maximum convenience for passengers connecting from anywhere to anywhere.
Proof-of-payment with ungated train stations is a useful technique for reducing construction costs. It simplifies the construction of stations, since there is no need for a headhouse or mezzanine – people can go directly from the street to the platform. A station without fare control requires just a single elevator, or two if side platforms are desired, and can be built shallowly using cut-and-cover. Cities across the size spectrum, perhaps only stopping short of hypercities, should take heed and use this to build urban rail more cheaply.
Is this a common cost control technique?
No. The vast majority of low-construction cost countries use faregates, which is why I was reticent to recommend proof-of-payment as a cost mitigation strategy. Spain, Italy, Korea, and Sweden are all faregated; among the world’s lowest-cost countries, I believe only Finland and Switzerland use proof-of-payment fare collection on urban rail.
However, there are exceptions. In Italy, the Brescia Metro uses proof-of-payment. This is not typical for the country or the region – Italian metros have fare control, like the vast majority of systems outside Germany and Germany-influenced countries. However, because Brescia is small, the system was forced to engage in value engineering, removing scope that would be routine in larger cities like Milan. The majority was built cut-and-cover or above-ground; the typical urban Italian metro is entirely bored. Italian metro systems prefer short stations on new lines to minimize costs and provide capacity through automated operations and extremely high frequency; Brescia takes this to an extreme and has 30-meter trains. Among these cost minimization tactics is the lack of fare control. The result of this entire package is that Brescia spent 915 million euros on a 13.7 km metro system.
Station size and station cost
So far, we believe that the cost of the station, excavation excluded, should be proportional to the floor area. This is based on something told to us in an interview about electrical system costs for the Boston Green Line Extension, which is light rail in a trench rather than a tunneled metro system, so I recommend caution before people repeat this uncritically.
Moreover, on somewhat more evidence, it appears that the cost of station excavation should be proportional to the volume excavated. Some of the evidence for this is circumstantial: media reports and government reports on the construction of such urban rail projects as Second Avenue Subway, Grand Paris Express, and the RER specify the volume of excavation as a measure of the difficulty of construction. But it’s not just circumstantial. In Paris, the depth of some of the GPX stations has led to some construction complications. Moreover, preliminary interviews in Paris suggest, albeit not definitively, that station construction costs are predominantly a matter of dig volume. Finally, the insistence on short platforms and high frequency as a cost saving technique on new-build metro systems in Italy as well as in Denmark and on the Canada Line in Vancouver is suggestive too, even if it says nothing about whether the relationship between volume and cost is linear, degressive, or superlinear.
How does one minimize station costs with POP?
Proof-of-payment means that there is no fare control between the street and the station. This means any of the following ways of constructing station access become available:
- Cut-and-cover with the platform on level -1, with direct stair and elevator access from the street. The Berlin U-Bahn is built this way, with access points in street medians where available, such as U8 on Brunnenstrasse. It’s easy to build staircases at each end of the platform to increase access, with an elevator in the middle.
- Bored tunnel with large enough bores to fit the platform within the bore. The Barcelona method for this is to use 12-meter bores, but smaller, cheaper versions exist with smaller trains, for example in Milan. It’s also possible to use double-O-tube TBMs for this, but ordinarily they are more expensive than twin bores. Access involves vertical bores down to the platform with elevators or slant bores with escalators; there is no need for intermediate levels or entry halls.
- Bored tunnel with cut-and-cover stations, with no mezzanine levels. Here, the dig volume is unchanged, and the saving from lack of fare control is only in the finishes and elevator costs, not the excavation.
It is noteworthy that the most common technique for metro construction, by far, is the last one, where the savings from POP are the smallest. The vast majority of world metros have fare control, including in low-cost countries, and this perhaps makes metro builders not notice how two separate ways of reducing costs – cut-and-cover and POP – interact especially well together. Nonetheless, this is a real saving.
What does this mean?
A technique can be uncommon in low-cost countries and yet be useful in reducing construction costs. It is useful to think of the way Madrid, Milan, Turin, Stockholm, Oslo, Helsinki, and Seoul build their urban rail systems as good, but not always perfect. A trick that these cities might not pay attention to may still be good. The caveat is that it requires a good explanation for why they have not employed it; in the case of Italy, I believe it’s simply that the non-German world views fare control as the appropriate way to run a metro system and POP as a light rail technique and therefore only good for low-volume operations. There may also be backward compatibility issues – Brescia is a new build, like POP Copenhagen, whereas Milan is building extensions on top of a gated system.
Nonetheless, the evidence from station costs, the success of POP operations in Germany even on very busy lines, and the experience of Brescia all suggest that POP is good for metro construction in general. Cities smaller than New York building new systems should use it exclusively, and cities that already have faregates should tear them down to improve passenger circulation and facilitate the construction of POP lines in the future at lower cost.
The Swiss slogan electronics before concrete, and related slogans like run trains as fast as necessary, not as fast as possible, is a reminder not to waste money. However, I worry that it can be read as an argument against spending money in general. For many years now, Cap’n Transit has complained that this slogan is used to oppose bad transit like the Gateway Tunnel and if the money is not spent on public transportation then it may be spent on other things. But in reality, the Swiss slogans, all emphasizing cost minimization, must be reconciled with the fact that Switzerland builds a lot of concrete, including extensive regional rail tunneling in Zurich and intercity rail tunneling. Electronics precedes concrete, but does not always substitute for it; it’s better to think of these planning maxims as a way to do more with a fixed amount of money, and not as a way to do the same amount of project with less money.
The extent of tunneling in Switzerland
Here is a list of tunnels built in Switzerland since the 1980s, when its modern program of integrated timetable-infrastructure-rolling stock investment began:
- Zurich S-Bahn, including the 7 km combination of the Hirschengraben and Zürichberg Tunnels for the first S-Bahn trunk starting 1990, and the 5 km Weinberg Tunnel for the second trunk starting 2014.
- Geneva RER, including the CEVA trunk, which has about 8.4 km of tunnel.
- The Mattstetten-Rothrist line between Olten and Bern is 52 km long of which a total of 21 km is in tunnel.
- A few more small intercity projects within the Bahn 2000 plan include tunnels.
This is not a small program. Zurich and Geneva are not large cities, and yet they’ve build regional rail trunk tunnels – and Zurich has built two, the most of any German-speaking country, since Berlin and Hamburg only have one of their trunk lines each in tunnel, the rest running above ground. The Mattstetten-Rothrist line likewise does not run at high speed, topping at 200 km/h, because doing so would raise the cost of rolling stock acquisition without benefiting the national integrated timetable – but it was an extensive undertaking for how small Switzerland is. Per capita, Switzerland has built far more intercity rail tunnels by length than France, and may even be ahead of Germany and Italy – and that’s without taking into account the freight base tunnels.
The issue of passenger experience
It’s best to think of organization-before-electronics-before-concrete as a maxim for optimizing user experience more than anything. The system’s passengers would prefer to avoid having to loiter 20 minutes at every connection; this is why one designs timed transfers, and not any attempt to keep the budget down. The Bahn 2000 investments were made in an environment of limited money, but money is always limited – there’s plenty of austerity at the local level in the US too, it just ends up canceling or curtailing useful projects while bad ones keep going on.
In Europe, Switzerland has the highest modal split for rail measured in passenger-km, 19.3%, as of 2018; in 2019, this amounted to 2,338 km per person. The importance of rail is more than this – commuters who use trains tend to travel by train shorter than commuters who use cars drive, since they make routine errand trips on foot at short distance, so the passenger-km modal split is best viewed as an approximation of the importance of intercity rail. Europe’s #2 and #3 are Austria (12.9%) and the Netherlands (11.2%), and both countries have their own integrated intercity rail networks. One does not get to scratch 20% with a design paradigm that is solely about minimizing costs. Switzerland also has low construction costs, but Spain has even lower construction costs and it wishes it had Switzerland’s intensity of rail usage.
Optimizing organization and electronics…
A country or region whose network is a mesh of lines, like Switzerland or the Netherlands, had better adopt the integrated timed transfer concept, to ensure people can get from anywhere to anywhere without undue waiting for a connecting train and without waiting for many hours for a direct train. This includes organizational reforms in the likely case there are overlapping jurisdictions with separate bus, urban rail, and intercity rail networks. Fares should be integrated so as to be mode-neutral and offer free transfers throughout the system, and schedules should be designed to maximize connectivity.
This should include targeted investments in systems and reliability. Some of these should be systemwide, like electrification and level boarding, but sometimes this means building something at a particular delay-prone location, such as a long single-track segment or a railway junction. In all cases, it should be in the context of relentlessly optimizing operations and systems in order to minimize costs, ensure trains spend the maximum amount of time running in revenue service and the minimum amount of time sitting at a yard collecting dust, reduce the required schedule padding, etc.
…leads to concrete
Systemwide optimization invariably shows seams in the system. When Switzerland designed the Bahn 2000 network, there was extensive optimization of everything, but at the end of the day, Zurich-Bern was going to be more than an hour, which would not fit any hourly clockface schedule. Thus the Mattstetten-Rohrist line was born, not out of desire to run trains as fast as possible, but because it was necessary for the trains to run at 200 km/h most of the way between Olten and Bern to fit in an hourly takt.
The same is true of speed and capacity improvements. A faster, more reliable system attracts more passengers, and soon enough, a line designed around a train every 15 minutes fills up and requires a train every 10 minutes, 7.5 minutes, 6 minutes, 5 minutes, 4 minutes. An optimized system that minimizes the need for urban tunneling soon generates so much ridership that the tunnels it aimed to avoid become valuable additions to the network.
The Munich S-Bahn, for example, was built around this kind of optimization, inventing many of the principles of coordinated planning in the process. It had a clockface schedule early, and was (I believe) the first system in the world designed around a regionwide takt. It was built to share tracks with intercity and freight trains on outer branches rather than on purely dedicated tracks as in the older Berlin and Hamburg systems, and some of its outermost portions are on single-track. It uses very short signaling blocks to fit 30 trains per hour through the central tunnel in each direction. And now it is so popular it needs a second tunnel, which it is building at very high cost; area activists invoked the organization before electronics before concrete principle to argue against it and in favor of a cheaper solution avoiding city center, but at the end of the day, Munich already optimized organization and electronics, and now is the time for concrete, and even if costs are higher than they should be by a factor of 2-3, the line is worth it.
Electronics before concrete, not instead of concrete
Switzerland is not going to build a French-style national high-speed rail network anytime soon. It has no reason to – at the distances typical of such a small country, the benefits of running at 300 km/h are not large. But this does not mean its rail network only uses legacy lines – on the contrary, it actively builds bypasses and new tunnels. Right now there are plans for an S-Bahn tunnel in Basel, and for an express tunnel from Zurich to Winterthur that was removed from Bahn 2000. The same is true of other European countries that are at or near the frontier of passenger rail technology. Even the Deutschlandtakt plan, compromised as it is by fiscal austerity, by high construction costs, by a pro-car transport minister, and by NIMBYs, includes a fair amount of new high-speed rail, including for example a mostly fast path from Berlin to Frankfurt.
When you plan your rail network well, you encourage more people to use it. When you optimize the schedules, fare integration, transfer experience, and equipment, you end up producing a system that will, in nearly every case, attract considerable numbers of riders. Concrete is the next step: build those S-Bahn tunnels, those express bypasses, those grade separations, those high-speed lines. Work on organization first, and when that is good enough, build electronics, and once you have both, build concrete to make maximum use of what you have.
A bunch of Americans who should know better tell me that nobody really cares about construction costs – what matters is getting projects built. This post is dedicated to them; if you already believe that efficiency and social return on investment matter then you may find these examples interesting but you probably are not looking for the main argument.
Exhibit 1: North America
I wrote a post focusing on some North American West Coast examples 5 years ago, but costs have since run over and this matters from the point of view of building more in the future. In the 2000s and 10s, Vancouver had the lowest construction costs in North America. The cost estimate for the Broadway subway in the 2010s was C$250 million per kilometer, which is below world median; subsequently, after I wrote the original post, an overrun by a factor of about two was announced, in line with real increases in costs throughout Canada in the same period.
Metro Vancouver has always had to contend with small, finite amounts of money, especially with obligatory political waste. The Broadway subway serves the two largest non-CBD job centers in the region, the City Hall/Central Broadway area and the UBC, but in regional politics it is viewed as a Vancouver project that must be balanced with a suburban project, namely the lower-performing Surrey light rail. Thus, the amount of money that was ever made available was about in line with the original budget, which is currently only enough to build half the line. Owing to the geography of the West Side, half a line is a lot less than half as good as the full line, so Vancouver’s inability to control costs has led to worse public transportation investment.
Like Vancouver, Toronto has gone from having pretty good cost control 20 years ago to having terrible cost control today. Toronto’s situation is in fact worse – its urban rail program today is a contender for the second most expensive per kilometer in the world, next to New York. The question of whether it beats Singapore, Hong Kong, London, Melbourne, Manila, Qatar, and Los Angeles depends on project details, essentially on scoring which of these is geologically and geographically the hardest to build in assuming competent leadership, which is in short supply in all of these cities. I am even tempted to specifically blame the most recent political interference for the rising costs, just as the adoption of design-build in the 2000s as an in-vogue reform must be blamed for the beginning of the cost blowouts.
The result is that Toronto is building less stuff. It’s been planning a U-shaped Downtown Relief Line for decades, since only the Yonge-University-Spadina (“YUS”) line serves downtown proper and is therefore overcrowded. However, it’s not really able to afford the full line, and hence it keeps downgrading it with various iterations, right now to an inverted L for the Ontario Line project.
Los Angeles’s costs, uniquely in the United States, seemed reasonable 15 years ago, and no longer are. This, as in Canada, can be seen in building less stuff. High-ranking officials at Los Angeles Metro explained to me and Eric that the money for capital expansion is bound by formulas decided by referendum; there is a schedule for how to spend the money as far as 2060, which means that anything that is not in the current plan is not planned to be built in the next 40 years. Shifting priorities is not really possible, not with how Metro has to buy off every regional interest group to ensure the tax increases win referendums by the required 2/3 supermajority. And even then, the taxes imposed are rising to become a noticeable fraction of consumer spending – even if California went to majority vote, its tax capacity would remain very finite.
The history of Second Avenue Subway screams “we would have built more had costs been lower.” People with deeper historic grounding than I do have written at length about the problems of the Independent Subway System (“IND”) built in the 1920s and 30s; in short, construction costs were in today’s terms around $140 million per km, which at the time was a lot (London and Paris were building subways for $30-35 million/km), and this doomed the Second System. But the same impact of high costs, scaled to the modern economy, is seen for the current SAS project.
The history of SAS is that it was planned as a single system from 125th Street to Hanover Square. The politician most responsible for funding it, Sheldon Silver, represented the Lower East Side. But spending capacity was limited, and in particular Silver had to trade that horse for East Side Access serving Long Island, which was Governor George Pataki’s base. The package was such that SAS could only get a few billion dollars, whereas at the time the cost estimate for the entire 13-km line was $17 billion. That’s why SAS was chopped into four phases, starting on the Upper East Side. Silver himself signed off on this in the early 2000s even though his district would only be served in phase four: he and the MTA assumed that there would be further statewide infrastructure packages and the entire line would be complete by 2020.
Exhibit 2: Israel
Israel is discussing extending the Tel Aviv Metro. It sounds weird to speak of extensions when the first line is yet to open, but that line, the Red Line, is under construction and close enough to the end that people are believing it will happen; Israelis’ faith that there would ever be a subway in Tel Aviv was until recently comparable to New Yorkers’ faith until the early 2010s that Second Avenue Subway would ever open. The Red Line is a subway-surface Stadtbahn, as is the under-construction Green Line and the planned Purple Line. But metropolitan Tel Aviv keeps growing and is at this point an economic conurbation of about 3-4 million people, with a contiguous urban core of 1.5 million. It needs more. Hence, people keep discussing additions. The Ministry of Finance, having soured on the Stadtbahn idea, bypassed the Ministry of Transport and introduced a complementary three-line underground driverless metro system.
The cost of the system is estimated at 130-150 billion shekels, which is around $39 billion. This is not a sum Israelis are used to seeing for a government project. It’s about two years’ worth of IDF spending, and Israeli is a militarized society. It’s about 10% of annual GDP, which in American or EU-wide terms would be $2 trillion. The state has many competing budget priorities, and there are so many other valid claims on the state coffers. It is therefore likely that the metro project’s construction will stretch over many years, not out of planning latency but out of real resource limits. People in Israel understand that Gush Dan has severe traffic congestion and needs better transportation – this is not a point of political controversy in a society that has many. But this means the public is willing to spend this amount of money over 15-20 years at the shortest. Were costs to double, in line with the costs in most of th Anglosphere, it would take twice as long; were they to fall in half, in line with Mediterranean Europe, it would take half as long.
Exhibit 3: Spain
As the country with the world’s lowest construction costs for infrastructure, Spain builds a lot of it, everywhere. This includes places where nobody else would think to build a metro tunnel or an airport or a high-speed rail line; Spain has the world’s second longest high-speed rail network, behind China. Many of these lines probably don’t even make sense within a Spanish context – RENFE at best operationally breaks even, and the airports were often white elephants built at the peak of the Spanish bubble before the 2008 financial crisis.
One can see this in urban rail length just as in high-speed rail. Madrid Metro is 293 km long, the third longest in Europe behind London and Moscow. This is the result of aggressive expansion in the 1990s and 2000s; new readers are invited to read Manuel Melis Maynar’s writeup of how when he was Madrid Metro’s CEO he built tunnels so cheaply. Expansion slowed down dramatically after the financial crisis, but is starting up again; the Spanish economy is not good, but when one can build subways for €100 million per kilometer, one can build subways that other cities would not. In addition to regular metros, Madrid also has regional rail tunnels – two of them in operation, going north-south, with a third under construction going east-west and a separate mainline rail tunnel for cross-city high-speed rail.
Exhibit 4: Japan
Japan practices economic austerity. It wants to privatize Tokyo Metro, and to get the best price, it needs to keep debt service low. When the Fukutoshin Line opened in 2008, Tokyo Metro said it would be the system’s last line, to limit depreciation and interest costs. The line amounted to around $280 million/km in today’s money, but Tokyo Metro warned that the next line would have to cost $500 million/km, which was too high. The rule in Japan has recently been that the state will fund a subway if it is profitable enough to pay back construction costs within 30 years.
Now, as a matter of politics, on can and should point out that a 30-year payback, or 3.3% annual interest, is ridiculously high. For one, Japan’s natural interest rate is far lower, and corporations borrow at a fraction of that interest; JR Central is expecting to be paying down Chuo Shinkansen debt until the 2090s, for a project that is slated to open in full in the 2040s. However, if the state changes its rule to something else, say 1% interest, all that will change is the frontier of what it will fund; lines will continue to be built up to a budgetary limit, so that the lower the construction costs, the more stuff can be built.
Conclusion: the frontier of construction
In a functioning state, infrastructure is built as it becomes cost-effective based on economic growth, demographic projections, public need, and advances in technology. There can be political or cultural influences on the decisionmaking process, but they don’t lead to huge swings. What this means is that as time goes by, more infrastructure becomes viable – and infrastructure is generally built shortly after it becomes economically beneficial, so that it looks right on the edge of viability.
This is why megaprojects are so controversial. Taiwan High-Speed Rail and Korea Train Express are both very strong systems nowadays. Total KTX ridership stood at 89 million in 2019 and was rising on the eve of corona, thanks to Korea’s ability to build more and more lines, for example the $69 million/km, 82% underground SRT reverse-branch. THSR, which has financial data on Wikipedia, has 67 million annual riders and is financially profitable, returning about 4% on capital after depreciation, before interest. But when KTX and THSR opened, they both came far below ridership projections, which were made in the 1990s when they had much faster economic convergence before the 1997 crisis. They were viewed as white elephants, and THSR could not pay interest and had to refinance at a lower rate. Taiwan and South Korea could have waited 15 years and only opened HSR now that they have almost fully converged to first-world Western incomes. But why would they? In the 2000s, HSR in both countries was a positive value proposition; why skip on 15 years of good infrastructure just because it was controversially good then and only uncontroversially good now?
In a functioning state, there is always a frontier of technology. The more cost-effective construction is, the further away the frontier is and the more infrastructure can be built. It’s likely that a Japan that can build subways for Korean costs is a Japan that keeps expanding the Tokyo rail network, because Japan is not incompetent, just austerian and somewhat high-cost. The way one gets more stuff built is by ensuring costs look like those of Spain and Korea and not like those of Japan and Israel, let alone those of the United States and Canada.
There’s a big difference between the various regional rail proposals I’ve made for New York and similar examples in Paris and Berlin: the New York maps go a lot further, and incorporate the entirety of regional rail, whereas the RER and the Berlin S-Bahn both focus on shorter-range, higher-frequency lines, with separate trains for longer-range service, generally without through-running. A number of New York-area rail advocates have asked me why do this, often suggesting shorter-range alternatives. Yonah Freemark made a draft proposal many years ago in which through-running trains went as far as New Brunswick, White Plains, and a few other suburbs at that range, on the model of the RER. But I believe my modification of the system used here and in Paris is correct for New York as well as the other American cities I’ve proposed regional rail in.
The reason boils down to a track shortage making it difficult to properly segregate S-Bahn/RER-type service from RegionalBahn/Transilien-type service. These are two different things in Paris, Berlin, Hamburg, and Munich, and Crossrail in London is likewise planned to run separately from longer-range trains, but in Zurich and on Thameslink in London these blend together. Separate operations require four-track mainlines without any two-track narrows at inconvenient places; otherwise, it’s better to blend. And in New York, there are no usable four-track mainlines. Philadelphia and Chicago have them, but not on any corridor where it’s worth running a separate RegionalBahn, which is fundamentally a short-range intercity train, and not a suburban train.
Here is a map of the Berlin S-Bahn (in black) and U-Bahn (in red) overlaid on the New York metropolitan area.
The reach of the S-Bahn here is about comparable to the size of New York City, not that of the metropolitan area. Even taking into account that Berlin is a smaller city, the scope is different. Service to suburbs that are not directly adjacent to Berlin the way Potsdam is is provided by hourly RegionalBahn trains, which do not form a neat network of a frequent north-south and a frequent east-west line through city center.
Here is the same map with the Paris Métro and RER; a branch of the RER D runs off the map but not much, and the RER E branches going east, still within the map box, go further but only every half hour off-peak.
The Parisian Transilien lines are not shown; they all terminate at the legacy stations, and a few have frequent trunks, generally within the scope of the box, but they don’t form axes like the east-west RER A and north-south RER B.
So what I’m proposing is definitely a difference, since I’ve advocated for through-running everything in New York, including trains going from Trenton to New Haven. Why?
Four-track lines and track segregation
In most of Berlin, the infrastructure exists to keep local and longer-range rail traffic separate. The Stadtbahn has four tracks, two for the S-Bahn and two for all other traffic. The North-South Tunnel has only two tracks, dedicated to S-Bahn service; the construction of Berlin Hauptbahnhof involved building new mainline-only tunnels with four tracks. Generally, when the S-Bahn takes over a longer line going out of Berlin, the line has four tracks, or else it is not needed for intercity service. The most glaring exception is the Berlin-Dresden line – the historic line is two-track and given over to the S-Bahn, requiring intercity trains to go around and waste 20 minutes, hence an ongoing project to four-track the line to allow intercity trains to go directly.
In Paris, there are always track paths available. Among the six main intercity terminals, the least amount of infrastructure is four-track approaches, at Gare de Lyon and Gare d’Austerlitz, with two tracks given over to the RER and two to everything else. Of note, the entirety of the Austerlitz network has been given to the RER, as has nearly all of the Lyon network, which is why the lines go so far to the south. The other terminals have more: Saint-Lazare and Nord each have 10 tracks, making segregation very easy. Only subsidiary regional-only stations have two-track approaches, and those are entirely given over to the RER, forming the eastern part of the RER A, the southern part of the RER B, and the western part of the RER C.
New York has a shortage of approach tracks. The reason for this is that historically the mainlines mostly terminated outside Manhattan, so the four-track approaches only went as far as Newark, Jersey City, etc. The LIRR has a four-track mainline into Penn Station from the east, which is why I’ve advocated for some segregation, but even that should eventually involve the express trains via East Side Access through-running to New Jersey; see the second map in this post.
On the New Jersey side there are plans for four tracks with new tunnels across the Hudson, but two tracks have to be shared with intercity trains, and there’s no easy way to neatly separate service into two S-Bahn tracks and two RegionalBahn tracks. In the short run, two of these tracks would have to include trains diverting west to the Morris and Essex Lines, which have a three-track main and therefore cannot segregate their own locals and expresses. In the long run, with the M&E system given its own tunnel across the Hudson, you could theoretically do two local and two express tracks, but that runs into a different issue, which is that east of Penn Station, there are two paths to New Rochelle, both of which have local stops.
The issue of having two paths between the city center station and an important suburban junction, both with local stations, is also a problem in London. North of the Thames, most mainlines are at least four-track, making segregation easy, hence the plans for Crossrail. The only exception is the Lea Valley lines. But in South London, lines are two-track – historically, railways that needed more capacity did not widen one line to four tracks but instead built a parallel two-track lines with its own local stations, often arranging the local stations in a loop. The result is a morass of merging and diverging lines reducing capacity, and London is only slowly disentangling it. In either case, it makes segregation difficult; Thameslink can’t just take over the slow lines the way Crossrail is, and therefore there are Thameslink trains going as far as Bedford and Brighton.
What does this mean?
It’s somewhat unusual for New York to get a regional rail network in which every train, even ones going to distinct cities like New Haven, is part of a central system of through-running. But it’s not unheard of – Thameslink works like this, so does the Zurich S-Bahn, and so does Israel’s national network with its Tel Aviv through-running – and it’s an artifact of a real limitation of the region’s mainline rail system.
But this should not be viewed as a negative. New York really does have suburban sprawl stretching tens of kilometers out. It should have suburban rail accompanying all these suburbs, and wherever possible, it should run on a schedule that is useful to people who are not just 1950s-style 9-to-5 commuters. Moreover, New York lacks either the vast terminals of Paris or the Ringbahn’s mushroom concept, which means trains from outer suburbs have nowhere to go but Manhattan, so they might as well be turned over into a through-running system.
The answer to the question is the public sector, always. It’s okay to have private-sector involvement in construction, but the risk must be borne by the public sector, or else the private sector will just want more money to compensate for the extra risk.
The biggest piece of evidence for this is emerging out of our construction costs project, so it will appear in the report and not in a blog post. But for now, I’d like to point out examples from media, the academic literature, and one interview of particular interest.
PPP, Gangnam style
A transportation planner in Korea named Abdirashid Dahir has been giving Eric and me a lot of detailed information about Korean construction costs. We were already aware that Line 9 in Seoul had been built as a PPP, but what we learned was more complicated.
Line 9 is a partnership – the last P in PPP. This means, part of the construction is done by the private sector, and part by the public sector, namely the Seoul Metropolitan Government. The private consortium, led by Hyundai, was responsible for the design and for the construction of the systems, including the tracks, signaling, and rolling stock. SMG was responsible for the civil infrastructure. The total cost of the first phase was 1,167.7 billion won for 25.5 km, split as 492.2 billion in municipal construction and 675.8 billion in private investment.
The importance of this split is that civil infrastructure is the least certain part of underground construction. There are always geotechnical surprises, most small, a few potentially leading to large cost and schedule overruns. These are especially likely during station construction – the tunnels in between tend to be simpler with modern TBMs. Systems, in contrast, are relatively straightforward. Installing rail tracks is the same task regardless of whether it’s in solid rock in an exurban area that has no significant archeology, or through sand that had to be frozen, partly underwater, in the oldest parts of Berlin.
The upshot here is that while low-cost countries do use PPPs, this project keeps the riskiest aspects of construction public and not private. Privatization is fine for less risky, more commoditized situations.
How private bidders respond to risk
Two examples come to mind, both from the United States.
First, in New York, Brian Rosenthal’s seminal New York Times article cited Denise Richardson of the General Contractors’ Association saying that the contractors are barely making any profit and are bidding high because of risks imposed on them by the public sector. I don’t think this is a very high-quality source – it’s extremely biased, for one – but in context, it makes some sense.
Second, we do have more quantifiable data on this, thanks to the work of the Stanford Graduate School of Business economist Shosh Vasserman and Hoover Institute economist Valentin Bolotnyy. They look at highway maintenance contracts in Massachusetts and compare scaling auctions, in which the contracts are itemized, with lump sum auctions, in which they are not. Based on actual differences in price and estimates of contractor risk-aversion, they estimate that itemizing saves 10% of the cost through lower risk.
Supporting structures for public-sector risk assumption
There’s always the problem of moral hazard. Of note, even with this problem, costs are lower with itemized contracts in Massachusetts than with lump-sum contracts. But this does suggest a number of ways to reduce costs through better risk management:
- Itemized contracts, in enough detail that changes do not need litigation.
- Fixed profit rates – Spanish contracts are done with a fixed profit rate over the items named in the bid.
- Public oversight – there needs to be tighter supervision of risky things, which most likely means no PPPs for civil infrastructure.
It is unfortunate that American trends in the last 20 years have been away from those principles and toward greater privatization of the state, and equally unfortunate that American (and British) soft power has led to similar reforms in the wrong direction in the rest of the Anglosphere. But it’s possible to do better and imitate Korean practices to get Korean costs.