I spoke with Paul Lewis yesterday about the Eno study of construction costs that I criticized over a statistical error, and he pointed something out to me: the line that there is no US cost premium does not come from him or from elsewhere at Eno. Streetsblog’s coverage was just bad – it claims there is little to no US premium and quotes Lewis, but the quotations from Lewis do not actually say that, it’s Streetsblog’s own editorializing.
What’s more, Streetsblog took this editorializing into directions that were not mentioned by Eno or by me. On top of calling high US costs “a persistent myth” and “mostly bunk,” it turns it into a labor issue, saying that other countries get away with paying lower wages by linking to an article about construction costs in China, and talking about “hard-won wages of union construction workers.” Streetsblog even does so while linking to a 3-year-old article of mine in CityLab that states clearly that,
European subway construction uses union labor, just like American construction, but the work rules that have accumulated over the decades permit higher productivity and fewer workers doing each task.
The other source that transformed Eno’s analysis into “the US doesn’t really need to learn more from foreign countries” hurt more than Streetsblog. This was Beth Osborne, who spoke on a panel for Tri-State alongside BART’s president of the board of directors Lateefah Simon and consultant Peter Peyser. Osborne and Simon generally said the right things on the panel, while Peyser seemed pretty useless. But in between talking about good transit reforms, Osborne took my audience question about costs and said that per the Eno study there may not be a US cost premium – if I remember correctly her exact words were “there is no need to self-flagellate.”
Well, there is a need to self-flagellate. American mainline rail planners are barely aware of trends in other American cities; $200,000/year managers are unaware that FRA regulations permit buying standard European train, and people all over the industry say things are impossible that happen thousands of times daily in Central and Northern Europe. In urban transit the situation is better but not by much. Agencies make assumptions that are unwarranted about station footprint, fare collection, and similar engineering-level cost raisers and are usually unaware of economic research into best procurement practices.
And there’s the rub. Eno wrote a study – one that seems honest, even if it did make a statistical error of the kind that every data scientist abstractly knows they must avoid and yet every data scientist still makes. The clear text of the study – and I want to emphasize that Eno’s direct quotes to the media are in line with the clear text – is that the US has a small premium for light rail and a large one for subways. This turned into a screed about how the US cost premium is a myth and people just say this out of hate for organized labor. To the sort of American who has no interest in learning how the rest of the world works, everything boils down to internal American politics, it can’t possibly be that someone might get curious about why the Nordic countries do infrastructure so efficiently or how Italy brought down construction costs in the 1990s as part of the mani pulite process.
And the reason it hurts the most when it’s Beth Osborne is, she’s generally good on transit reform. I’ve never met her, and the panel alone was not enough to make an impression, but I know people who’ve met her who would not have a reason to give unwarranted praise, and they describe her as curious and sharp. American public transportation advocates who I trust were hopeful that she might even get appointed secretary of transportation in President Joe Biden’s administration, until Biden announced he picked Pete Buttigieg. And even she can’t get into a mindset in which the US really needs to learn to imitate places with lower costs and better outcomes.
In a sense, then, it’s not Eno’s fault, even unintentionally. In the last few months I’ve gotten to meet a number of American advocates who I otherwise think highly of who seem completely closed to any discussion of construction costs. They tell me that nobody cares, by which they mean they don’t care. They also insist, for political reasons, on including domestic and not foreign comparisons even when foreign ones work better. There’s so much demand out there in the American advocacy sphere for someone to come in and say that the US is doing fine, all it needs is more money with no oversight, that any criticism of high costs is equivalent to pro-car advocacy. Eno didn’t even say that, but Streetsblog could squint its eyes until it found something in there approximating the desired conclusion, and it appears that, regrettably, so did Osborne.
A curious pattern can be found in subway construction costs around the world, based on GDP per capita. On the one hand, poor countries that have severe cultural cringe, such as former colonies, have high construction costs, and often the worst projects are the ones that most try to imitate richer countries, outsourcing design to Japan or perhaps China. On the other hand, poor-rich countries, by which I mean countries on the periphery of the developed world, have similar cultural cringe and self-hate for their institutions, and yet their imitation of richer countries has been a success; for example, Spain copied a lot of rail development ideas from Germany and France. This can be explained using the development economic theory of isomorphic mimicry; the rub here is that a poor country like India or Ethiopia is profoundly different from the richer countries it tries to imitate, whereas a poor-rich country like Spain is actually pretty similar to Germany by global standards.
What is isomorphic mimicry?
In the economic development literature, the expression isomorphic mimicry refers to when a poor country sets up institutions that aim to imitate those of richer countries in hope that through such institutions the country will become rich too, but the imitation is too shallow to be useful. A common set of examples is well-meaning regulations on safety, labor, environmental protection, and anti-corruption that are not enforced due to insufficient state capacity. Here is a review of the concept by Andrews, Pritchett, and Woolcock, with examples from Mozambique, Uganda, and India, as well as some history from the American private sector. More examples using the theory can be found in Turczynowicz, Gautam, Rénique, Yeap, and Sagues concerning Peru’s one laptop per child program, in Evans’ interpretation of Bangladesh’s domestic violence laws, and in Rajagopalan and Tabarrok on India’s poor state of public services.
While the theory regarding institutions is new, analogs of it for tangible goods are older. Postwar developmental states engaged in extensive isomorphic mimicry, building dams, steel plants, and coal plants hoping that it would transform them into wealthy states like the United States, Western Europe, and Japan; for the most part, they had lower economic growth than did the developed world until the 1980s. The shift within international development away from tangible infrastructure and toward trying to fix institutions came about because big projects like the Aswan Dam failed to create enduring economic growth and often had ill side effects on agriculture, the environment, or human rights.
How does isomorphic mimicry affect public transportation?
The best example of isomorphic mimicry leading to bad transit that I know of is the Addis Ababa light rail system. This is funded by China, whose ideas of global development are similar to those of the postwar first and second worlds, that is providing tangible physical things, like railroads. Unfortunately, usage is low, because of problems that do not exist in middle-income or rich countries but are endemic to Ethiopia. Christina Goldbaum, the New York Times’ transit reporter, who lived in East Africa and reported from Addis Ababa, mentioned four problems:
- Electricity is unreliable, so the trains sometimes do not work. In early-20th century America, electric railroads and streetcar companies built their own power supply and were sometimes integrated concerns providing both streetcar and power service; but in more modern countries, there is reliable power for urban rail to tap.
- Not many people work in city center rather than in the neighborhood they live in. This, again, has historical analogs – there were turn-of-the-century Brooklynites who never visited Manhattan. Thus, a downtown-centric light rail system won’t get as much ridership as in a more developed city.
- The train is expensive relative to local incomes, so many people stick with buses or ride without paying.
- The railroad cuts through streets at-grade, to save money, and blocks off pedestrian paths that people use.
The Addis Ababa light rail system at least had reasonable costs. A more typical case for countries that poor is to build urban rail at premium cost, and the poorer the country, the higher the cost. The reason is most likely that such countries tend to build with Chinese or Japanese technical assistance, depending on geopolitics, and therefore import expensive capital for which they pay with weak currencies.
In India, the most functional and richest of the countries in question, there is much internal and external criticism that its economic growth is not labor-intensive, that is the most productive firms are not the ones employing the most people, and this stymies social development and urban growth. I suspect that this also means there is reluctance to use labor-intensive construction methods, that is cut-and-cover with headcounts that would be typical in New York, Paris, and Berlin in the early 20th century, or perhaps mid-20th century Milan and Tokyo. International consultancies are centered on the rich world and recommend capital-intensive methods to avoid hiring too many sandhogs at a fully laden employment cost of perhaps 8,000€ a month; in India, that is the PPP-adjusted gross salary of an experienced construction worker per year, and if capital is imported then multiply its cost by 3 to account for the rupee’s exchange rate value.
Poor-rich countries are those on the margin of the developed world, such as the countries of Eastern and Southern Europe, Turkey, Israel, to a lesser extent South Korea, and the richer countries of Latin America such as Chile. These are clearly poorer than the United States or Germany. Their residents, everywhere I’ve asked, believe that they are poorer and institutionally inferior; convincing a Spaniard or an Italian that their country can do engineering better than Germany is a difficult task. Thus, these countries tend to engage in mimicry of those countries that they consider the economic center, which could be Germany in Southern Europe, Japan in South Korea, or the US or Spain in Spanish America.
However, being a poor-rich country is not the same as being a poor country. Italy is, by American or German standards, poor. Wages there are noticeably lower and living standards are visibly poorer, and not just in the South either. But those wages remain in the same sphere as American and German wages. The labor-capital cost ratios in Southern Europe are sufficiently similar to those of Northern Europe that it’s not difficult to imitate. Spain even mixed and matched, using French TGV technology for early high-speed rail but preferring the more advanced German intercity rail signaling system, LZB, to the French one.
Such imitation leads to learning. Spain imported German and French engineering ideas but not French tolerance for casual rioting or German litigiousness, and therefore can build infrastructure with less NIMBYism. Turkey invited Italian consultants to help design the early lines of the Istanbul Metro, but subsequently refined their ideas domestically in order to build more efficiently, for example shrinking station footprint and tunnel diameter to reduce costs. Seoul has a subway system that looks like Tokyo’s in many ways, but has a cleaner network shape, with far fewer missed connections between lines. As a result, all three countries – Spain, Turkey, Korea – now have innovative domestic programs of rail construction and can even export their expertise elsewhere, as Spain is in Ecuador.
Openness to novelty
Andrews-Pritchett-Woolcock stress the importance of openness to novelty in the public sector, and cite examples of failure in which bureaucrats at various levels refused to implement any change, even one that was proven to be positive, because their goal was not to rock the boat.
Cultural cringe is in a way a check on that. Isomorphic mimicry is an attempt to combine agenda conformity and closeness to novelty with a desire to have what the richest countries have. But in poor-rich countries, isomorphic mimicry is real imitation – there is ample state penetration in a country like Spain or Turkey rather than outsourcing of state capacity to traditional heads of remote villages, and education levels are high enough that many people know how Germany works and interact with Germany regularly. A worker who earns 2,000€ a month net and a worker who earns 3,000€ a month can exchange tips about how to apply for jobs, how to prepare food, what brands of consumer goods to buy, and where to go on vacation. They cannot have this conversation with a worker who earns 10,000€ a month net.
Within the rich world, what matters then is the realization that something is wrong and the solution is to look abroad. It doesn’t matter if it’s a generally poor-rich region like Southern Europe or a region with a poor-rich public sector like the United States – there’s enough private knowledge about how successful places work, but what’s needed is a public acknowledgement and social organization encouraging imitation and lifting voices that are most expert in implementing it.
And for all the jokes about how the United States or Britain is like a third-world country, they really aren’t. Their public-sector dysfunctions are real, but are still firmly within the poor-rich basket; remember, for example, that despite its antediluvian signaling capacity, the New York City Subway manages to run 24 trains per hour per track at the peak, which is better than Shanghai’s 21. Health and education outcomes in the United States are generally better than those of middle-income and poor countries on every measure. This is a public sector that compares poorly with innovation centers in Continental Europe and democratic East Asia, but it still compares; to try to do the same comparison in a country like Nigeria would be nonsensical.
The upshot then is that implementing best practices in developed countries that happen to be bad at one thing, in this case public transportation in the United States, can work smoothly, much like Southern Europe’s successful assimilation of and improvements on Northern European engineering, and unlike the failures in former colonies in Africa and Asia. But people need to understand that they need to do it – that the centers of innovation are abroad and are in particular in countries that speak English non-natively.
There’s a study by Eno looking at urban rail construction costs, comparing the US to Europe. When it came out last month I was asked to post about it, and after some Patreon polling in which other posts ranked ahead, here it goes. In short: the study has some interesting analysis of the American cost premium, but suffers from some shortcomings, particularly with the comprehensiveness of the non-American data. Moreover, while most of the analysis in the body of the study is solid, the executive summary-level analysis is incorrect. Streetsblog got a quote from Eno saying there is no US premium, and on a panel at Tri-State a week ago T4A’s Beth Osborne cited the same study to say that the US isn’t so bad by European standards, which is false, and does not follow from the analysis. The reality is that the American cost premium is real and large – larger than Eno thinks, and in particular much larger than the senior managers at Eno who have been feeding these false quotes to the press think.
What’s the study?
Like our research group at Marron, Eno is comparing American urban rail construction costs per kilometer with other projects around the world. Three key differences are notable:
- Eno looks at light rail and not just rapid transit. We have included a smattering of projects that are called light rail but are predominantly rapid transit, such as Stadtbahns, the Green Line Extension in Boston, and surface portions of some regional rail lines (e.g. in Turkey), but the vast majority of our database is full rapid transit, mostly underground and not elevated. This means that Eno has a mostly complete database for American urban rail, which is by construction length mostly light rail and not subways, whereas we have gaps in the United States.
- Eno only compares the United States with other Western countries, on the grounds that they are the most similar. There is a fair amount of Canada in their database, one Australian line, and a lot of Europe, but no high-income Asia at all. Nor do they look at developing countries, or even upper-middle-income ones like Turkey.
- Eno’s database in Europe is incomplete. In particular, it looks by country, including lines in Britain, Spain, Italy, Germany, Austria, the Netherlands, and France, but even there it has coverage gaps, and there is no Switzerland, little Scandinavia (in particular, no ongoing Stockholm subway expansion), and no Eastern Europe.
The analysis is similar to ours, i.e. they look at average costs per km controlling for how much of the line is underground. They include one additional unit of analysis that we don’t, which is station spacing; ex ante one expects closer station spacing to correlate with higher costs, since stations are a significant chunk of the cost and this is especially notable for very expensive projects.
The main finding in the Eno study is that the US has a significant cost premium over Europe and Canada. The key here is figure 5 on takeaway 4. All costs are in millions of PPP dollars per kilometer.
|Tunnel proportion||Median US cost||Median non-US cost|
However, the study lowballs the US premium in two distinct ways: poor regression use, and upward bias of non-US data.
Regression and costs
The quotes saying the US has no cost premium over Europe come from takeaways 2 and 3. Those are regression analyses comparing cost per km to the tunnel proportion (takeaway 3) or at-grade proportion (takeaway 2). There are two separate regression lines for each of the two takeaways, one looking at US projects and one at non-US ones. In both cases, the American regression line is well over the European-and-Canadian line for tunneled projects but the lines intersect roughly when the line goes to 0% underground. This leads to the conclusion that the US has no premium over Europe for light rail projects. Moreover, because the US has outliers in New York, the study concludes that there is no US premium outside New York. Unfortunately, these conclusions are both false.
The reason the regression lines intersect is that regression is a linear technique. The best fit line for the US construction cost per km relative to tunnel proportion has a y-intercept that is similar to the best fit line for Europe. However, visual inspection of the scattergram in takeaway 3 shows that at 0% underground, most US projects are somewhat more expensive than most European projects; this is confirmed in takeaway 4. All this means that the US has an unusually large premium for tunneled projects, driven by the fact that the highest-cost part of the US, New York, builds fully-underground subways and not els or light rail. If instead of Second Avenue Subway and the 7 extension New York had built high-cost els, for example the plans for a PATH extension to Newark Airport, then a regression line would show a large US premium for elevated projects but not so much for tunnels.
I tag this post “good/interesting studies” and not just “shoddy studies” because the inclusion of takeaway 4 makes this clear: there is a US premium for light rail, it’s just smaller than for subways, and then regression analysis can falsely make this premium disappear. This is an error, but an interesting one, and I urge people who use statistics and data science to study the difference between takeaways 2 and 3 and takeaway 4 carefully, to avoid making the same error in their own work.
Eno has a link to its dataset, from which one can see which projects are included. It’s notable that Eno is comprehensive within the United States, but not in Europe. Unfortunately, this introduces a bias into the data, because it’s easier to find information about expensive projects than about cheap ones. Big projects are covered in the media, especially if there are cost overruns to report. There is also a big-city premium because it’s more complicated to build line 14 of a metro system than to build line 1, and this likewise biases incomplete data because it’s easier to find what goes on in Paris than to find what goes on in a sleepy provincial town like Besançon. Yonah Freemark thankfully has good coverage of France and includes low-cost Besançon, but Eno does not – its French light rail database is heavy on Paris and has big gaps in the provinces. French Wikipedia in fact has a list, and all of the listed systems, which are provincial, have lower costs than Paris.
There is also no coverage of German tramways; we don’t have such coverage either, since there are many small projects and they’re in small cities like Bielefeld, but my understanding is that they are not very expensive. Traditionally German rail advocates held the cost of a tramway to be €10 million/km, which is clearly too low for the 2010s, but it should lower the median cost compared to the Paris-heavy, Britain-heavy Eno database.
Three examples of public-private partnerships screwing up urban transit are on my mind. The Canada Line in Vancouver is not new to me – I was poking around a few years ago. But the other two in this post are. The Maryland Purple Line in the suburbs of Washington was supposed to be the smooth PPP offering low-risk orbital light rail connecting suburbs to other suburbs without having to go through Downtown Washington, and now it is in shambles because the contractor walked away. Milan is not a new example either, but it is new to me, as we’ve discovered it during the construction costs project comparing high American (and British) costs to low Southern European ones; even there, the PPP bug bit, leading not so much to high capital costs but to high future operating charges. In no case is such a PPP program good government; the bulk of construction and risk must always lie in the public sector, and if your public sector is too incompetent to build things itself, as in the United States, then it’s equally incompetent at overseeing a PPP, as we’re seeing in Maryland. Don’t do this.
Washington: the Purple Line
Maryland planned on building two major urban rail projects last decade, stretching into the current one: the Red Line and the Purple Line. The Red Line was to be a conventional public project to build a subway in Baltimore, mostly serving low-income West Baltimore neighborhoods. The Purple Line, a light rail project in the DC suburbs acting as an orbital for Metro, was designed as a PPP. Governor Larry Hogan canceled the Red Line, most likely for racist reasons. The physical construction costs per rider were higher on the Red Line, but the overall disbursement including very high operating charges made the Purple Line more expensive, and yet Hogan kept the more expensive system and tossed the cheaper one.
One might expect that the PPP structure of the Maryland Purple Line would allow it to at least resist cost escalation – the risk was put entirely on the private contractor. And yet, the opposite happened. Costs turned out to be higher than expected, so the contractor just quit. Once the contract is signed, no matter what it says, the risk is in practice public, and this is no exception. The contractor stopped all work and left the region with a linear swath of ripped up roads; eventually the concessionaire and the state came into a settlement in which the state would pay $250 million extra and the concessionaire would hire a new contractor. The cost overrun was $800 million and the state said that the deal was going to save taxpayers $500 million, but what it signals is that even with very high public-sector payouts over decades that intend to put the entirety of the risk on the private concession, the public sector shares a high proportion of the risk, and the private bidders know this. This is a lose-lose situation and under no circumstances should countries put themselves in it.
Vancouver provides another good example of PPPs and operating costs. SkyTrain operates driverless equipment throughout the system, which means that operating costs should be low, and, moreover, should not depend on train size much. The Expo and Millennium Lines, built and operated publicly, cost C$3.20 to run per car-km, cheaper than on any system for which I have data (mostly very large ones plus Oslo) and less than half as expensive as the major European systems. But the Canada Line, operated by a concessionaire as part of a PPP scheme, costs $17.90/car-km, which is considerably worse than any system for which I have data except PATH. Even taking into account that the Canada Line cars are somewhat bigger, this is a difference of a factor of more than 3.
This is not a matter of economies of scale. The Canada Line’s trunk runs every 3.5 minutes most of the day, which is better than the vast majority of non-driverless systems I am familiar with off-peak, so the high costs there cannot be ascribed to poor utilization. In fact, before the Evergreen extension of the Millennium Line opened in 2016, the two systems’ total operating costs were almost identical but the operating costs per car-km were about 3.5 times worse on the Canada Line – economies of scale predict that unit costs should be degressive, not almost flat.
Marco Chitti is busy collecting information and conducting interviews regarding subway construction in Italy as part of our construction costs report. Italian costs are low, which makes it feasible to build metros even in very small cities like Brescia, where per Wikipedia the cost of the metro was around €65 million per km and €15,000 per weekday rider. However, the use of PPPs has not been good in the places where it happened, due to fiscal austerity following the Great Recession.
- What is the impact on the cost of the PPP? The impact on costs of the potential transfer of risk from the Public to the Private is hard to calculate, but it appears to have an impact more on higher gross operational costs (the fee that the Municipality will pay in the 26 years of the concession for the operation and pay back a return to the private operators) than on the actual construction cost. But that is unclear yet. A bit of detail: the municipality will pay to the concessionaire a 1.09 €/passenger as a minimum granted fee up to 84 million passengers/year, 0.45€/passenger for each additional user up to a maximum determined as an increase of the IRR of 2 percentage points more than the “base IRR” of 5.93%. That means that this is basically the rate at which the private investors are de facto borrowing the money to the municipality, with most of the risk from low ridership transferred to the municipality. What makes calculations complicate is that the city is directly a majority stakeholder of the concessionaire Metro M4 S.p.A. and also, indirectly, as the owner of ATM, which will be the “private” operator. It’s very blurred compared to other PPP schemes where the concessionaire is 100% private (like M5).
- PPP emerges as a stratagem to finance the project without increasing the municipal public debt. The PPP schemes is used to compensate for the lack of local public funds matching the national ones, limited due to the debt cap imposed by the so-called “internal Stability Compact”, an austerity measure implemented after the 2011 debt crisis, which strongly limits the capacity of local governments to borrow money for infrastructure projects. It was suspended in 2016.
Note that contra the plan to build the system without public debt, the PPP does in fact include borrowing. It’s opaque, but the payment per rider is a form of borrowing. Driverless metro operating costs are lower than €1.09 per unlinked trip. The Expo and Millennium Lines cost C$1.55, which in PPP terms is about €0.90, and feature much longer trips, as the Expo Line is 36 km long and one-tailed, which means many people ride end-to-end, whereas Milan M4 is to be 15 km and two-tailed, which means few trips are longer than half the total. In effect, this is high-interest borrowing, kept off the books in an atmosphere of strict budgetary austerity
Don’t do this
PPP-built lines do not have to have high construction costs. The Canada Line was cheap to build – it was Canada’s last reasonable-cost subway, and since then costs have exploded around the country. M4 in Milan is inexpensive as well, around €110 million per kilometer at current estimates even while going underneath older subways in city center. The current annual ridership projection of M4, 87 million, means that the current projected cost per weekday trip is €6,000, which represents an enormous social surplus in a region that builds up to around €30,000-40,000 before even pro-transit activists demand cancellation.
But in those cases, the structure of the contract keeps the operating costs artificially high, privatizing what should be public-sector profit from building a very inexpensive-to-operate system. This is especially bad if it is bundled into construction costs as an up-front payment, as in Maryland. In Maryland, the extra operating costs raised the construction cost well above the maximum level that is acceptable to the public transportation community over here, and in the United States too, such lines tend to be under threat of cancellation from fiscally conservative governors if they are not portrayed as pro-market PPPs. But those PPPs then have higher costs and, through poor risk allocation, lead to the worst of both worlds: the private concessionaire increases costs in order to deal with the risk of escalation, but if the risk exceeds prior estimates, then the state remains on the hook.
Don’t do this. One can to some extent understand why Italy was forced into this position at the bottom of the financial crisis. This isn’t such a situation – all countries in Europe are engaging in large discretionary deficit spending nowadays, as the market appears to believe that not only will corona pass, but also the new vaccines developed will help prevent the common cold and the flu in the near future, increasing future health outcomes and improving productivity through less lost sick time. In the United States, a $2 trillion stimulus is sold as just the first of two steps, because there’s fiscal room. You, even as a state or local government, can find money in the budget for more spending – raise taxes or sell bonds, and do so transparently. Don’t take opaque high-interest loans just to tell the public that you haven’t borrowed on the open market. It’s not worth it.
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.
There’s an emerging mentality among left-wing urban planners in the US called “trust before streets.” It’s a terrible idea that should disappear, a culmination of about 50 or 60 years of learned helplessness in the American public sector. Too many people who I otherwise respect adhere to this idea, so I’m dedicating a post to meme-weeding it. The correct way forward is to think in terms of state capacity first, and in particular about using the state to enact tangible change, which includes providing better public transportation and remaking streets to be safer to people who are not driving. Trust follows – in fact, among low-trust people, seeing the state provide meaningful tangible change is what can create trust, and not endless public meetings in which an untrusted state professes its commitment to social justice.
What is trust before streets?
The trust before streets mentality, as currently used, means that the state has to first of all establish buy-in before doing anything. Concretely, if the goal is to make the streets safer for pedestrians, the state must not just build a pop-up bike lane or a pedestrian plaza overnight, the way Janette Sadik-Khan did in New York, because that is insensitive to area residents. Instead, it must conduct extensive public outreach to meet people where they’re at, which involves selling the idea to intermediaries first.
This is always sold as a racial justice or social justice measure, and thus the idea of trust centers low-income areas and majority-minority neighborhoods (and in big American cities they’re usually the same – usually). Thus, the idea of trust before streets is that it is racist to just build a pedestrian plaza or bus lanes – it may not be an improvement, and if it is, it may induce gentrification. I’ve seen people in Boston say trust before streets to caution against the electrification of the Fairmount Line just because of one article asserting there are complaints about gentrification in Dorchester, the low-income diverse neighborhood the line passes through (in reality, the white population share of Dorchester is flat, which is not the case in genuinely gentrifying American neighborhoods like Bushwick).
I’ve equally seen people use the expression generational trauma. In this way, the trust before streets mentality is oppositional to investments in state capacity. The state in a white-majority nation is itself white-majority, and people who think in terms of neighborhood autonomy find it unsettling.
Low trust and tangible results
The reality of low-trust politics is about the opposite of what educated Americans think it is. It is incredibly concrete. Abstract ideas like social justice, rights, democracy, and free speech do not exist in that reality, to the point that authoritarian populists have exploited low-trust societies like those of Eastern Europe to produce democratic backsliding. A Swede or a German may care about the value of their institutions and punish parties that run against them, but an Israeli or a Hungarian or a Pole does not.
In Israel, this is visible in the corona crisis: Netanyahu’s popularity, as expressed in election polls, has recently risen and fallen based on how Israel compares with the Western world when it comes to handling corona. In March, there was a rally-around-the-flag effect in Israel as elsewhere, giving Netanyahu cover to refuse to concede even though parties that pledged to replace him as prime minister with Benny Gantz got 62 out of 120 seats, and giving Gantz cover not to respond to hardball with hardball and instead join as a minister in Netanyahu’s government. Then in April and May, as Israel suppressed the first wave and had far better outcomes than nearly every European country, let alone the US, Netanyahu’s popularity surged while that of Gantz and the opposition cratered. The means did not matter – the entire package including voluntary quarantine hotels, Shin Bet surveillance for contact tracing, and a tight lockdown that Netanyahu, President Rivlin, and several ministers violated nonchalantly, was seen to produce results.
In the summer, this went in reverse. The second wave hit Israel earlier than elsewhere, and by late summer, its infection rate per capita was in the global top ten, and Israel had the largest population among those top ten countries. In late September it reached around 6,000 cases a day, around 650 per million people. The popularity of Netanyahu’s coalition was accordingly shot; Gantz himself is being nearly wiped out in the polls, but the opposition was holding steady, and Yamina, a party to the right of Likud led by Naftali Bennett that is not currently in the coalition and is perceived as more competent, Bennett himself having done a lot to moderate the party’s line, surged from its tradition 5-6 seats to 16.
Today the situation is unclear – Israelis have seen the state fight the second wave but it was not nearly as successful as in the spring, and right now there is a lot of chaos with vaccination. On the other hand, Israel is also the world’s vaccination capital, and eventually people will notice that by March Israel is (most likely) fully vaccinated while Germany is less than 10% vaccinated. Low-trust people notice results. If they’re disaffected with Netanyahu’s conduct, which most people are, they can then vote for a right-wing-light satellite party like New Hope, just as many voted Kulanu in 2015, which advertised itself as center, became kingmaker after the results were announced, and immediately joined under Netanyahu without trying to seriously negotiate.
Streets lead to trust
The story of corona in Israel does not exist in isolation. Low trust in many cases exists because people perceive the state to be hostile to their interests, which happens when it does not provide tangible goods. Many years ago, talking about his own history immigrating from the Soviet Union in the 1970s, Shalom Boguslavsky credited the welfare state for his integration, saying that if he’d immigrated in the 1990s he’d probably have ended up in a housing project in Ashdod and voted for Avigdor Lieberman, who at the time was running on Russian resentment more than anything.
In Northern Europe, perhaps trust is high precisely because the state provides things. My total mistrust of the German state in general and Berlin in particular is tempered by the fact that, at queer meetups, people remind me that Berlin’s center-left coalition has passed universal daycare, on a sliding scale ranging from 0 for poor parents to about €100/month for wealthy ones. This more than anything reminds me and others that the state is good for things other than dithering on corona and negatively stereotyping immigrant neighborhoods.
Such provisions of tangible goods cannot happen in a trust before streets environment. This works when the state takes action, and endless public meetings in which every objection must be taken seriously are the death of the state. It says a lot that in contrast with Northern Europe, in the United States even in wealthy left-wing cities it is unthinkable that the municipality can just raise taxes to pay teachers and social workers better. Low trust is downstream of low state capacity. Build the streets and trust will follow.
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.
Good public transportation must be useful for all travel needs. This in particular includes trips that are not commutes to work, which are the most typical use case for suburban trains. This is a key difference between American and European public transportation: in some cases the modal split for work trips are similar, for example New York’s split is similar to that of the major German cities, but per capita ridership in the German cities is a lot higher than in New York, because off-peak service is better and people use it more for non-commute trips. In the linked post I went over this as a matter of better off-peak service; in this post I am going to go over the more fundamental question of, what kind of trips can regional public transport provide apart from work trips?
Some data from Germany
Germany periodically conducts surveys of transportation usage, called Mobilität in Deutschland, or MiD. The most recent was in 2017, and the one before it was in 2008. In Berlin, the data I have is from 2008, from the city’s transportation plan for 2030. On PDF-p. 30, it produces the following modal splits by trip type:
- Work: 39% transit, 40% car
- School: 31% transit, 31% car
- Shopping: 19% transit, 30% car
- Pleasure: 21% transit, 32% car
- Going back home: 27% transit, 31% car
- Other, including business: 25% transit, 67% car
Here is Hamburg, also as of 2008 and not 2017, on p. 7, with the city and suburbs listed separately:
- Work: 33%/48% city, 16%/65% suburbs
- School: 32%/13% city, 34%/30% suburbs
- Shopping: 11%/41% city, 4%/65% suburbs
- Errands: 21%/37% city, 4%/71% suburbs
- Pleasure: 17%/40% city, 5%/55% suburbs
The Hamburg S-Bahn barely extends past city limits, even less so than the Berlin S-Bahn, so the low suburban modal splits cannot be viewed as a failure of S-Bahn service to be useful for non-work trips. But it’s worth pointing out that in both Berlin and Hamburg (city, not suburbs), work is the activity with the highest modal split for public transport, followed by school.
Long and short trips
In a few posts over the years, I talked about a dichotomy of long and short trips. Long trips include the primary commute but also extraordinary trips such as to the airport; short trips are routine errands, including shopping and short-distance leisure trips.
In most transit cities, short trips are not done on transit but on foot. I usually bring up Asian examples because they concentrate development near the train station, so one walks to the train station either to shop at the department store within the station or to get on an actual train to get to work in city center. But this is equally true of Germany, even with vastly lower extents of transit-oriented development. The intersection points of the Ringbahn with U- and S-Bahn lines are replete with shopping centers.
The upshot is that if people don’t take regional trains to go shopping, because if the system works, then they can walk to retail. This is true even when retail is at big box scale – those Ringbahn stations have Kaufland and Real hypermarkets.
Sporadic long trips
If regional rail is not for short trips, then what non-work trips is it for? The answer cannot be none, because ridership on S-Bahn trains in Berlin and Hamburg is too high compared with the work modal split. The answer can’t just be school either, because there aren’t vast numbers of school commuters.
Rather, it’s better to think in terms of sporadic and usual long trips. When I go play board games, it’s a long trip and not a short trip, because the community is citywide, and people come from Friedrichshain, from Charlottenburg, from far western suburbs, from Lichtenberg, from Pankow, from Schöneberg. The same is true of queer meetups – even when I lived in Neukölln and some of these meetups were walking distance to me, they were not walking distance to most attendees, who would take the U- or S-Bahn.
All of this falls under the rubric of sporadic long trips: long because they are not normally in-neighborhood, and sporadic because they are not one’s usual commute to work or school. But they often involve several roundtrips a week, producing healthy ridership at all hours of day.
Meetups are an example of using the train for socialization at a scale that’s expressly citywide or even regionwide. In that sense, a large city with a good regional transportation network is good for social connections, because it encourages communities to be more specialized to people’s interests. In a city the size of Berlin, even with Germany’s shocking lack of diversity, one can find enough queers for an English-language meetup. In a larger city like New York, without the same language load, one can even find ever more specialized communities – there is no one gaming community but many, and they intersect, for example one can look for queer gamers, or for a Harlem-based group with predominantly black demographics, and so on. This isn’t really any different from the economic advantages of large cities, which offer more division of labor.
The upshot is that even if the sort of travel one can do by regional rail that is not for work does not seem to exist in a city with poor off-peak public transportation service, this does not mean improving off-peak transit is pointless. On the contrary: over time, the existence of such service will let communities form at convenient locations based on the shape of the network. It will make the city bigger in a sense, and this is a good thing economically and socially.