Institutional Issues: Proactive and Reactive Regulations

So far, in this series on institutional factors behind differences in the quality and cost of public transportation infrastructure, I’ve gone over procurement, public-sector oversight, and transparency. These three posts can be read together as a series: procurement is the keystone, and to get it right it is critical to have high-quality in-house supervision of the work, and to get that right in turn it’s important to cultivate transparency.

Today I’m going to turn the camera 90 degrees and talk about another relevant issue: that of proactive versus reactive state regulation and supervision. This is related to the issue of oversight, in that proactive regulation requires deeper in-house expertise and detachment from politics, so that the state can effectively make changes as necessary based on changes in travel and social patterns and advances in knowledge by scientists and practitioners.

Nudging and doing

One of the distinctions I’ve noticed regarding different regulatory traditions is whether the regulators do things or merely nudge. This is related to the issue of oversight, in that strong engineering bureaucracies that do design and planning in-house also come up with their own sets of clear rules.

The Italian civil service does rather than nudges: there are clear proactive rules by the Ministry of Culture about the protection of historical monuments, limiting the permitted building settlement in sensitive areas to 3 mm. Such proactive clear rules lead to a more predictable legal situation since it’s easy to measure what is and what is not legal, reducing risk. Long-term standards that impose real costs on business also soon sprout innovation for how to follow them while minimizing costs, as is the case for Japanese and Chinese zoning standards for light; ad hoc rules instead impose new costs every time, since the investment in trying to adapt to them would be spread across just one project rather than many.

The American regulatory apparatus has a mixture of doing and nudging. Environmental protection is almost entirely adversarial: the National Environmental Protection Act requires agencies to prepare environmental impact statements (EISes) before every project, but those are not judged by regulators but instead subject to lawsuit, and soon the nudge turns into red tape with hundreds of pages in an EIS aiming to anticipate every possible legal objection. Labor law is largely adversarial, but some states have passed triple damages statutes, in which the penalty for violation is specified at three times the missed wage and therefore workers do not have to litigate against much better-resourced employers.

The disability rights regime in the United States is a mix but include a significant amount of doing. There are clear standards for elevator accessibility, longest path of travel for people in wheelchairs, and maximum permitted gaps between the platform and the train; more recently, the FRA has wanted to mandate automatic gap fillers on mainline rail in order to permit passengers in wheelchairs to board unaided even across small gaps.

This is related to the issue of adversarial legalism, but is not exactly the same. There is plenty of adversarial legalism in the American disability rights regime, in which agencies refuse to follow the law and dare advocates to sue them.

Moreover, federal regulations in the United States remain a matter of nudging more than doing whenever there is any interaction with state and local authorities; instead of coordinating different authorities from a position of being able to engage in planning things itself, a federal agency will often try to nudge through offering incentives.

Two examples of equity

There’s a sense in much of the planning world in both the United States and Europe that it is necessary to proactively plan cities and transportation for the benefit of disadvantaged groups, or else even well-meaning planners would make unquestioned assumptions that harm such groups. It’s worthwhile examining the differences between the approaches to such planning, because one is proactive and the other reactive.

Before going on, I would like to point out a huge difference that is not about proactive planning: in the United States, the Title VI process for egalitarian planning (currently in revision, for which I’m very likely to submit comments make this and other points) centers racial equity, as a legacy of the civil rights movement that it came out of. In Europe, planners persistently ignore the problem of racism, and people of color are severely underrepresented in the civil services that I’ve seen, which issue is so glaring it makes Americans discount any European experience. However, European planners do look at class equity (for example, in Paris) and gender equity (for example, in Sweden), and there, they aim for proactive changes to reduce barriers to access.

The Swedish system is accessible to the English speaker, because feminist writers in English have occasionally looked to the Nordic world for inspiration, and outlets like Streetsblog have examined gender-based planning in Sweden. In 2015, Stockholm examined travel patterns by gender and found that women walk and take public transportation more and drive less than men, and as a result, it changed its snowplowing patterns to prioritize sidewalks over roads.

I was similarly told that when Swedish cities do surface construction, such as the cut-and-cover stations of Västlänken in Gothenburg or the cut-and-cover entry halls into the deep mined stations of the Stockholm T-bana extensions, by regulation the contractors must preserve sufficient sidewalk space on the street for pedestrians. If they need to open up most of the street, they can take car traffic lanes. The reasoning isn’t corrective discrimination, but rather that past planners, who prioritized keeping roads open over sidewalks, had erred because of conscious or unconscious discounting of the experience of women. The change in snowplowing practices led to a fall in injuries, since three times as many people in Sweden were injured walking in icy conditions as driving.

The Swedish system is proactive: the municipality or the state comes up with actionable, concrete changes based on its understanding of travel pattern. Researchers working for the city, perhaps in partnership with activists, notice a discriminatory practice, and come up with an alternative.

Now consider the American system. Title VI does not offer a clear set of practices for anti-racist transportation planning. It instead requires agencies to engage in review of their practices whenever they propose a change, leading first to status quo bias and second to arbitrary enforcement of rules. Much of the enforcement is not done top-down by regulators who are apolitical subject matter experts, but bottom-up from lawsuit or the threat thereof with supervision by judges trained in law but not in the specifics of transportation.

Status quo and reactivity

The worst aspect of reactive planning is that it leads to status quo bias. American regulations for civil rights and environmental protection require review of changes, but not of the status quo. The process can stop an agency from implementing a change or delay implementation until mitigations are done, but it cannot compel an agency to take an action it does not wish to take.

To nuance this somewhat, a judge can put an agency under a consent decree. But that already assumes an adversarial relationship between the state and itself. The process can imposing fines and constraints on an agency that does not want to do something, such as following ADA law and installing elevators at every subway station (something Berlin, an older system than New York, is about to complete systemwide). But it cannot literally build elevators there itself. It’s akin to the Jewish concept of a get, in which a rabbinical court can impose arbitrary fines on a husband who refuses to grant his wife a divorce, where what is needed is to permit women to initiate divorce without their husband’s permission.

A more proactive and less reactive regulatory culture can break out of the status quo trap. The first thing it must do is create a system that does not privilege the status quo: if a change is subject to review on such grounds as accessibility, racial equality, and environmental protection, then current practice must be as well. If it turns out that current practice falls short or is discriminatory, as Sweden’s snowplowing priorities were a decade ago, the agency must change its ways based on clear, concrete standards.

More proactive regulations are more obtrusive and visible, but they reduce costs and improve service quality. They are more sensitive to the current economic and social conditions and to the state of present-day knowledge than to the conditions and knowledge of a generation ago. They are more legible to the public and to contractors, who can then come up with ways to follow them without gambling on favorable judicial or political rulings. And they are less likely to surprise agencies deep into the process with a sudden imposition.

A state that acts as a helping hand rather than a grabbing hand helps more by governing more. Making it easier to ditch a status quo that worked for the world of yesterday but doesn’t for that of today or tomorrow, or one that never worked but was falsely believed to work, allows it to govern more efficiently. It’s necessary then to ensure that the highest-level civil servants who regulate transportation be empowered to make concrete decisions and coordinate lower-level agencies rather than just nudging in the right direction.

Institutional Issues: Transparency

Continuing with my series on institutional factors relevant to construction costs, I’d like to turn to a culture of transparency, or lack thereof. It’s unfortunate that the exact breakdown of costs by items and factors that we’ve seen in Italy and Turkey and are seeing in Sweden does not exist in the English-speaking world. It’s further unfortunate that there is an adversarial relationship in the Anglosphere between the civil service and academic researchers like us or the broad public.

It’s a delicate subject, because the cultures of opacity we’ve encountered, the American and the British, certainly correlate with high costs, but we cannot be perfectly certain that they cause them. The peripheral Anglosphere learns many things from the US and UK, so it could just be part of the general correlation between Anglosphere membership and high costs.

That said, we do have reasons to believe this matters. The opacity we’ve encountered in the US and UK is so severe that it ensures there is no proper oversight. A system that punishes junior workers for reporting problems will just not know they exist. It’s best viewed as the Xi Jinping school of governance: demand that people follow the line and not air out problems, until subordinates lie to you just as much as you lie to the public, and local party officials arrest doctors who report to the public about corona while Taiwan is already warning the world about it.

The organization of information

Many episodes of Yes, Minister prominently feature the red boxes of papers for the minister to review. The civil service prepares documents every night for review, and the minister, who thinks he is a reformer, demands to know everything – so the permanent secretary’s office gives him interminable work to look at, down to and including stationery requisition. Needless to say, the minister does not come out of this experience informed about the department’s workings.

One of the obstacles we’ve encountered to a clean itemized comparison of construction costs is that in the US (and apparently also the UK), the information either does not exist or is not made public. We know how much Second Avenue Subway cost; we know how much individual stations cost and even how the stations break down between the civil work and the finishes, but each of these is still $200-500 million in unitemized costs, given as a lump sum contract. There are independent itemized estimates used as a benchmark, but they’re confidential, since the MTA uses them to rate contractor bids.

Any further breakdown we’ve seen is at the level of the minister’s red boxes, stating individual salaries and contracts for concrete and widgets; it’s not even complete information, since most of the work is subcontracted, and what’s subcontracted is opaque even to the independent cost estimators. To the extent we have estimates at a level that’s at all useful, that is high single-digit millions to low tens of millions, they’re cobbled together from many different examples, to the great frustration of people who were hoping for a perfect recipe for them to solve the cost problem.

I must stress that this is in a relatively cooperative environment. I don’t think Janno Lieber is sitting on a detailed breakdown of contracts to tranches of about $30 million and is just making sure we don’t know it. I doubt that this information exists in an organized fashion at all – it lives in the lore of numerous private-sector middle managers each of whom knows a few items.

An example from Italy

Italy has a well-known problem with tax evasion. Pellegrino-Zingales consider tax evasion among small businesses to be one of the root causes behind Italy’s economy stagnation in the last generation, arguing that it encourages firms to hire and promote by loyalty and nepotism (alongside patronage-based credit networks) rather than by merit, and that this has been an especial drag in the age of IT.

More recently, D’Agostino-de Benedetto-Sobbrio consider this question from the other end: what makes people choose to evade taxes? They look at the impact of government spending, proposing two opposed theories: the government as a grabbing hand, which taxpayers perceive as out to get them, and the government as a helping hand, whose spending helps ordinary taxpayers. The grabbing hand model predicts that bigger government leads to more tax evasion, the helping hand model predicts the opposite. While Chinese tax evasion follows the grabbing hand model, Italian tax evasion follows the helping hand model: Italian government spending induces the taxpayers to perceive the Italian state as on their side, reducing tax cheating.

All of this should be treated as background to the fact that, in Italy, the public data on construction costs and their breakdown is of very high quality. Marco Chitti has obtained breakdowns at the level that is useful for us for the upcoming Italian case study, and having read a draft of his report, I can speak with relative confidence (less than he can, of course) about wages, staffing levels, techniques, relative costs, and what the problem sections are.

Transparency and openness

That Sweden has very high-quality public data is probably not surprising to readers who know even a little bit about Nordic institutions. Here, for example, is the published breakdown of one set of contracts for Nya Tunnelbanan. Nordic transparency is a general feature, seeping to so many places, to the point that academic hiring committees in Sweden produce public-facing spreadsheets of all applicants and brief comments on them, and if the comments are positive, along the lines of “almost makes our shortlist but we have too many good candidates this year,” then applicants use that in their next application.

But when it comes to infrastructure megaprojects, we’ve found high transparency wherever we’ve looked in Continental Europe. Italy has the same information quality – because the Italian state works for the people of Italy rather than lording over them in secret.

This transparency extends to analysis of problems. The cost overruns on Grand Paris Express have led to a report by the Cour des Comptes about what happened, with detailed analysis and cost breakdowns (albeit not at granular enough level for our case studies). The report is earnest because the French state, elitist as it is, still works for the public, and acknowledges errors. Likewise, academic work in Italy on cost problems, such as Paolo Beria’s paper on the high costs of Italian high-speed rail, is in wide circulation. In Sweden, there is not only academic student work about the cost overruns of Nya Tunnelbanan but also a brief report a civil servant involved in the project sent us explaining the issue of mid-project changes in regulations.

Then there are the UK and US, where the situation is different. The UK, and countries it influences like Australia, barely even informs the public of the expected cost of a project until it is time to approve it; David Levinson told me that in Australia all communication about costs comes from leaks and trial balloons, unlike in the more open US. Even learning the highest-level breakdown of Crossrail costs required using a freedom of information request, and project-level questions about the cost of individual stations are often redacted (Crossrail 2 made available information about relative costs of stations, not a specific number per station). Reports about critical technological change like driverless trains, increasingly adopted in Paris, are not available to the public in London except through leaks. American governance is somewhat more transparent in the early stages, but key information about choices is hidden in confidential documents; the freedom of information process takes forever and officials freely redact documents or reject handing them over. The American and British freedom of information process screams, the government doesn’t work for you – its relationship with you is adversarial.

Transparency and language

In the last year or so, observing ever more central circles of political activism in the United States, I’ve realized something important: federal policymakers, and state policymakers who interface with them, speak an inscrutable language of bureaucrats who nudge but do not do. This is best illustrated with examples:

  • The Bipartisan Infrastructure Framework has a line item about federal funding for previously funded but canceled projects, inserted by Maryland’s senators in order to fund the Baltimore Red Line, which Governor Hogan canceled for racist reasons in 2017. Instead of openly including it as an earmark, or else letting the federal process play it out, the language uses a circumlocution.
  • At a meeting with activists, another advocate asked Beth Osborne of Transportation for America (T4America) about bus shelter. Instead of dealing with the direct issue, she gave a soporific answer about the need for federal standards, which may be Washingtonian for what in English would be rendered as “yes, I’ll do what I can to make sure the feds fund bus shelters,” or it may be Washingtonian for endless process and yet another round of red tape; not speaking the language, I could not and still cannot tell.

The contrast is with the concrete, plain language I see elsewhere from civil servants, to the point that it’s easier for me to go through the Cour des Comptes report, in a language I speak imperfectly, than to try to translate from Washingtonian to English. All of this matters – the use of a form of language designed to speak only to Beltway insiders is itself a form of opacity and American civil servants need to train themselves to on the one hand be more technical when necessary but on the other hand be very clear about what they’re doing.

Transparency as a goal

The path forward must involve treating transparency not as an imposition to be fulfilled through checklists, which produce red boxes, but as a positive goal. It involves ensuring agencies are helpful to regulators, academics, and the broad public, rather than hiding decisions behind walls, often because the reasoning behind such decisions is weak. An academic is expected to make data available to peers and the public, and so must agencies and regulators.

Trust in the civil servants is crucial for public infrastructure to succeed. Results can speak for themselves even in a low-trust system – streets really do come before trust – but the US and UK have poor results. The adversarial relationship with the public produces bad outcomes, and people whose expertise is in stonewalling and making excuses must be replaced with people whose expertise is in building things and accurately reporting on what they’re doing so that others can replicate their success.

Institutional Issues: Professional Oversight

Continuing my series on institutional issues concerning infrastructure costs and quality, after the issue of procurement, I’d like to discuss the issue of the quality of public-sector oversight. It is critical to have extensive in-house expertise inside an apolitical civil service empowered to make technical decisions. The role of the political layer is to set up broad rules, not to micromanage. Conversely, while the top people should avoid micromanagement, they should be expert enough to be capable of making specific decisions.

Civil service and oversight

The importance of civil service to oversight is that it’s the professional layer that has to supervise planners, engineers, architects, and construction teams. There are too many small decisions for a single elected political layer, say a minister and a policy team the minister directly appoints and supervises.

In my procurement post, I was basing my recommendations on common threads I’d seen or read about in low- and medium-cost European countries, and to some extent practice in South Korea, a low-cost country on a par with Southern Europe. All of these make use of professional civil servants to make any of the following decisions:

  • In-house planning. The macro-level decisions on funding levels are political (and never devolved to the agency through dedicated slush funds, unlike for US highways), but the decisions at the level just below, such as what programs to ask the politicians to fund, are made by professional agencies. High-speed rail was invented this way in Japan and then reinvented in France, while upgraded legacy rail was so invented in Germany and perfected in Switzerland.
  • Design and engineering. Those can be done in-house or outsourced to consultants, or more likely some mixture of the two, but even if the design is contracted out, it’s the agency that owns the product and is responsible for it.
  • Contractor selection. It is irresponsible to award a megaproject design contract based on the lowest bid. A technical score is used nearly universally in the low- and medium-cost examples we have looked at, and this means someone needs to come up with sound criteria for scoring and then evaluate each proposal. This has to be done more intelligently than just by rubric. A British source told us of a problem with British technical scoring: every large project is parceled out between different consultants, and thus all consultants can claim experience on the same project, making it impossible at that level to tell which companies do better work than others, even as industry insiders know who does bad work. The same source, when I asked about French comparisons, said that France has extensive in-house expertise and therefore doesn’t hire their consultancy.
  • Contract supervision. Change orders are inevitable, especially for underground projects. Not coincidentally, in Eno’s database the American premium for subways is higher than for at-grade light rail, which is technically more predictable. It’s on the client agency to decide whether to accept or reject changes coming from unpredictable factors, and this requires extensive knowledge of the field.

In my procurement post, I spoke of flexibility. No client can have flexibility without oversight – flexibility without oversight is an anything-goes game in which the contractor abuses the client, the client abuses the contractor, or, most likely, both. And this oversight is necessarily detailed enough that it requires civil service.

An example from Sweden

I spoke to an experienced Swedish project manager earlier this year. The project manager talked to me about the major issues with the construction of Citybanan, the regional rail tunnel Stockholm opened 4 years ago, shortly after I left the country. This included issues of construction techniques (but for further engineering question my source referred me to an engineer) but also competition policy, negotiation, change orders, etc.

At one point in the interview, I asked about something a previous Swedish source told me about, called functional procurement. In functional procurement, the agency maximizes flexibility by specifying only the function of the project, such as the required capacity and schedule, and letting the contractors make suggestions as to how to fulfill it; this is similar to the military concept of mission command, stressing flexibility and training intermediate officers in how to use it in a hierarchical organization.

The project manager said of this growing trend in Swedish procurement: “I can’t say it makes it easier.” The manager then explained the constraints involved – railways have technical specs that make a functional contract not too different from a conventional one, where the design is already figured out and the contractors have to build to it with only minor modifications.

Let’s unpack what happened in that interview. A Swedish manager who does not know me, who I have never met, first of all talked to me in technically adept language, and second of all was willing to go on the record criticizing a trend in infrastructure construction procurement, a trend that the person who put us in contact had mentioned to me as a positive.

I have never heard this kind of internal criticism from American sources, unless they knew me well enough and were trying to get me to publish their internal problems in the media. And quite often, the criticism I would hear from the US was much more pungent, complaining about politics or a bad manager. “We have been trying this trend but I don’t think it’s working,” in exactly the tone you can imagine emerge from the style of quotation, is not a line I recall hearing from an American. The civil servants who criticize something are far more frantic, far more afraid. Sweden will trust its civil servants to literal death. The US (and UK) will not trust them to do anything but follow orders.

Is Sweden unique?

No. Strong traditions of professional civil service exist everywhere we’ve looked outside the US. Even the UK has a semblance of it; the problem there is that the topmost layer of civil servants – the Sir Humphreys – consists of lifelong generalist elites rather than domain experts.

In Italy, the situation is especially lopsided. The political layer of the government is weak because party control changes so often and ministers do not last, and there are so few political appointments that even with political instability, the civil service lasts across those changes. If anything, the instability makes the professional layer stronger.

Apolitical experts

It’s critical to ensure the civil service is not political. This doesn’t just mean that it should not be partisan. There are enough dominant-party jurisdictions in which it’s understood that the civil service exists to implement a predictable political agenda, which can be left-wing (Berlin, New York, California) or right-wing (Bavaria, Texas). Those jurisdictions all have problems coming from the lack of meaningful political competition, but those problems come from politicians, not civil servants. No: political noninterference goes much deeper, and means sidelining issues of petty personal priorities.

The ideal civil service has as few political appointees as possible. Those are neither elected nor meritorious. By their nature, they lack the legitimacy of both the politicians above them and the deep layer of domain experts below them. If they’re selected from among people with industry and operating experience then this is fine – technically senior generals are political appointments in both the US and Israel subject to the usual military norms, and Andy Byford was an external hire for New York City Transit with experience in the industry but not the agency. But letting generalist managers selected for political loyalty parachute in charge of agencies is a recipe for disaster.

The word for people who are always to be managed by people who are not from within their own social group is servants. Such people, knowing that their manager will always be someone who has other priorities that are not always transparent to them, will learn to lower their heads rather than proactively looking for ways to improve their institution.

A scientist working at a federal institution explained it to me this way: “There’s absolutely ways to speed things up, but they need cover from the political appointees at the top. A career officer understands their role to be following an existing plan, laid down in writing by either congress or by a planning process involving the top (i.e. political appointee) officers of the agency.”

This was meant to explain the sluggish FDA corona vaccine approval process, but can equally apply to infrastructure and operations of public transportation. Any variation from a plan written long ago by people who were often not even at the frontier of knowledge then requires political approval.

Trusting the civil service

A low-trust society isn’t one in which common people don’t trust the elites. It’s one in which the elites don’t trust the common people. In the context of civil service, it’s crucial to set up a system in which the top people affirm rather than scourge those below them.

Byford did it well, setting up a system encouraging employees to complain and suggest improvements, much to the surprise of managers at other MTA agencies who preferred scourging their subordinates. At the topmost level, it means the political layer needs to affirm the authority and expertise of the civil servants; in conflict between a petty actor such as a community advocate and the junior members of the state, the state must support its own, while internally ensuring that the proposal has technical merit. (Political merit is judged by elections, not by who screams the most loudly at midday community meetings.)

Civil servants who see that their superiors are hired and promoted from within the ranks or among peers, and judged for their ability to work with those below them and not just those above them (in the tech industry, a managerial hire spends some interview time with the team they are to supervise), will soon learn that they can show initiative. The ones with bad intuition will fail, whereas the ones whose initiative is more successful will be able to rise and transmit their ideas to the group. It goes without saying that this also requires staffing up to normal levels and paying competitive wages. This way, the state can ensure it can oversee its own projects competently; there is no alternative.

Institutional Issues: Procurement

This is the start of a multi-post series, of undecided length, focusing on institutional, managerial, and sociopolitical issues that govern the quality of infrastructure. I expect much of the content to also appear in our upcoming construction costs report, with more examples, but this is a collation of the issues that I think are most pertinent at the current state of our work.

Moreover, in this and many posts in the series, the issues covered affect both price and quality. These are not in conflict: the same institutions that produce low construction costs also produce rigorous quality of infrastructure. The tradeoffs between cost and quality are elsewhere, in some (not all) aspects of engineering and planning.

The common theme of much (but not all) of this runs through procurement. It’s not as exciting as engineering or architecture or timetables – how many railfans write contracts and contracting regulations for fun? – but it’s fundamental to a large fraction of the difference in construction costs between different countries. Some of the subheadings in this post deserve full treatments by themselves later, and thus this writeup is best viewed as an introductory overview of how things tie together.

What is procurement?

Procurement covers all issues of how the state contracts with providers of goods and services. In the case of public transportation, these goods and services may include consulting services, planning, design, engineering, construction services, equipment, materials, and operating concessions. The providers are almost always private-sector, but they can also be public companies in some cases – for example, Milan Metro provides consulting services for other Italian cities and Delhi Metro does for other Indian ones, and state-owned companies like RATP, SNCF/Keolis, and DB/Arriva sometimes bid on private contracts abroad.

The contracting process can be efficient, or it can introduce inefficiencies into the system. In the worst case I know of, that of New York, procurement problems alone can double the cost of a contract, independently of any other issue of engineering, utilities, labor, or management quality. In contrast, low-cost examples lack any such inefficiencies in construction.

The issue of oversight

On the list of services that are procured, some are more commonly contracted out than others. Construction is as far as I can tell always bid out to private-sector competition, including equipment (nobody makes their own trains), materials, and physical construction. Design and engineering may be contracted out to consultants, depending on the system. Planning never is anywhere I know of, except some unusually high-cost American examples in which public-sector planning has been hollowed out.

The best practice from Southern Europe as well as Scandinavia is that planning and oversight always stay with the public sector. Even with highly privatized contracts, there’s active in-house oversight over the entire process.

The issue of competition

It is necessary to ensure there’s healthy competition between contractors. This requires casting as wide a net as possible. This is easier to do in environments where there is already extensive private- and public-sector construction going on: Turkey builds about 1 million dwellings a year and many bridges, highways, and rail lines, and therefore has a thick domestic market. In Turkish law, it is required that every public megaproject procurement get at least three distinct bids, or else it must be rebid. This rule is generally easy to satisfy in the domestic market.

But if the domestic market is not enough, it is necessary to go elsewhere. This is fine – foreign bidders are common where they are allowed to participate, always with local oversight. Turkish contractors in Northern Europe are increasingly common, following all of the local labor laws, often partnering with a domestic firm.

Old boy networks, in which contractors are required to have a preexisting relationship with the client, are destructive. They lead to groupthink and stagnation. A Turkish contractor held an Android in front of me and, describing work in Sweden, said, “If a Swede said it’s an iPhone, the Swedes would accept that it’s an iPhone, but if I did, they’d check, and see it’s an Android.” In Sweden at least the domestic system is functional, but in a high-cost environment, it is critical to look elsewhere and let foreigners outcompete domestic business.

It is even more important to make sure the experience of bidding on public contracts is positive. A competent contractor has a choice of clients, and a nightmare client will soon lose its business. Such a loss is triple. First, the contractor would have done a good job at an affordable price. Second, the negative experience, such as micromanagement or stalling, is likely to increase costs and reduce the quality of work. And third, the loss of any contractor reduces competition. In the United States, we have repeatedly heard this complaint from contractors and their representatives, that they always have to deal with the “agency factor,” where the agency can be the MTA or any other transit agency, making things difficult and leading to higher bids.

Good client-contractor relations

The issue of avoiding being a nightmare client deserves special scrutiny. It is critical for agencies to make sure to be pleasant clients. This includes any of the following principles:

  • Do not change important regulations midway through the project. In Stockholm, the otherwise-good Nya Tunnelbana project has had cost overruns due to new environmental regulations that required disposal of waste rock to the standards of toxic waste, introducing new costs of transportation.
  • Avoid difficult change order process (see below for more details on itemization). It should be everyone against the project, not the agency against the contractors or one contractor against another.
  • Avoid any weird process or requirements. The RFPs should look like what successful international contractors are used to; this has been a recent problem of American rolling stock procurement, which has excessively long RFPs defining what a train is, rather than the most standard documents used in Europe. This rule is especially important for peripheral markets, such as the entire United States – the contractor knows what they’re doing better than you, so you should adapt to them.
  • Require some experience and track record to evaluate a bid, but do not require local experience. A contractor with extensive foreign experience may still be valuable: Israel’s rail electrification went to such a contractor, SEMI, and the results are positive in the sense that the bid was well below expectations and the only problems stem from a nuisance lawsuit launched by a competitor that bid higher and felt entitled to the contract.
  • For a complex contract, the best practice here is to have an in-house team score every proposal for technical merit and make that the primary determinant of the final score, not cost. Across most of the low- and medium-cost examples we have looked at, the technical score is 50-70% of the total and cost 30-50%.
  • Do not micromanage. New York’s lowest bid rules lead to a thick book of regulations that force the bids to be as similar to one another as possible in quantity and type of goods, to the point of telling contractors what materials they are allowed to use. This is bad practice. Oversight should always be done with flexibility and competent in-house engineers working in conversation with the stakeholders and never with a long checklist of rules.

Flexibility

Contracts should permit as much flexibility as practical, to allow contractors to take advantage of circumstances for everyone’s benefits and get around problems. This is especially important for underground construction and for construction in a constrained city, where geotechnical surprises are inevitable.

Most of the English-speaking world, and some parts of the rest (Copenhagen, to some extent Grand Paris Express) interpret flexibility to mean design-build (DB) contracts, in which the same firm is given a large contract to both design a project and then build it. However, DB is not used in the lowest-cost examples I know of, and rarely in medium-cost ones. If design is contracted out, then there are almost always two contracts, in what is called design-bid-build (DBB). Sources in Sweden say they use single build contracts, but they often use consultants for supplementary engineering and thus they are in practice DBB; Italy is DBB; Turkish sources claim to do design-build, but in reality there are two contracts, one for 60% design and another for going to 100% and then doing construction.

The Turkish system is a good example of how to ensure flexibility. Because the construction contractor is responsible for the finalized (but not most) design, it is possible to make little changes as needed based on market or in-the-ground conditions. In Italy and Spain, the DBB system is traditional, but the building contractor is allowed to propose changes and the in-house oversight team will generally approve them; this is also how the more functional American DBB contracts work, typically for small projects such as individual train stations, which are within the oversight capacity of the existing in-house teams.

DBB can be done inflexibly – that is, wrong – and often when this happens, everyone gets a bitter taste and comes out with the impression that DB is superior. If the building contractor has to go through onerous process to vary from the design, or is excessively incentivized to follow the design to the letter, then problems will occur.

One example of inflexibility comes from Norway. Norwegian construction costs are generally low, but the Fornebu Line’s cost is around $200 million/km, which is not as low as some other Nordic lines. Norway uses DBB, but its liability system incentivizes rigidly adhering to the design: any defect in the construction is deemed to be the designer’s fault if the builder followed the design exactly but the builder’s fault if the builder made any variation. This means small changes do not occur, and then the design consultants engage in defensive design, rather than letting the building contractor see later what risks are likely based on meter-scale geology.

Itemization and change orders

Change orders, and defensive design therefor, are a huge source of cost overruns and acrimony. Moreover, because of the risks involved, any cost overruns are transmitted back into the overall budget – that is, every attempt to clamp down on overruns will just increase absolute costs, as bidders demand more money in risk compensation. California is infamous for the way change orders drive up costs. New York only avoids that by imposing large and growing risk on the bidders (including, recently, a counterproductive blacklisting system called disbarment, a misplaced effort by Andrew Cuomo to rein in cost overruns); the bidders respond by bidding much higher.

Instead of the above morass, contracts should be itemized rather than lump-sum. The costs of materials are determined by the global, national, and local markets, and the contractor has little control over them; in fact, one of the examples an American source gave me of functional change orders in a DBB system is that the bench at a train station can be made of wood, metal, or another material, depending on what costs the least when physical construction happens.

Labor costs depend on large-scale factors as well, including market conditions and union agreements. The use of union labor ensures that the wages and benefits of the workers are known in advance and therefore unit costs can be written into the contract easily. Spain essentially turns contracts into cost-plus: costs depend on items as bid and as required by inevitable changes, and there is a fixed profit rate based on a large amount of competition between different construction firms.

The upshot is that itemized costs prevent the need to individually negotiate changes. If difficult ground conditions or unexpected utilities slow down the work, the wages of the workers during the longer construction period are already known. It is especially important to avoid litigation and the threat thereof – questions of engineering should be resolved by engineers, not lawyers.

Here, our results, based on qualitative interviews with industry experts, mirror some quantitative work in economics, including Ryan and Bolotnyy-Vasserman. Itemization reduces risk because it pre-decides some of the disputes that may arise, and therefore the required profit rate to break even net of risk is lower, reducing overall cost.

The impact of bad procurement practices

One of our sources told us that procurement problems add up to a factor of 2 increase in New York construction costs. Five specific problems of roughly equal magnitude were identified:

  • A regulation for minority- and woman-owned businesses (MWB), which none of the pre-qualified contractors in the old boy network is.
  • The MTA factor.
  • Change order risk.
  • Disbarment risk.
  • Profit in a low-competition environment.

MWB and disbarment are New York-specific, but the other three appear US-wide. In California, the change order risk is if anything worse, judging by routine cost overruns coming from change orders. California, moreover, is very rigid whenever a contractor suggests design improvements, as Dragados did for its share of California High-Speed Rail, even while giving contracts to contractors that engage in nuisance change orders like Tutor Perini.

Aligning American procurement practice with best practice is therefore likely to halve construction costs across the board, and substantially reduce equipment costs due to better competition and easier contractor-client relations.

Microapartments for Students

Charlie Munger’s deservedly mocked plan for a university dorm with windowless bedrooms got me thinking about small studios for students. The size of the proposed Munger Hall – 156,000 m^2 for 4,500 students – is pretty reasonable for a large building housing students, provided the students get their own rooms with windows. But this raises interesting questions about building depths and apartment plans.

This post is best read as a companion for my posts about building depth and a high-density euroblock design. In the post on building depths, I argued that the higher ratio of apartment area to window frontage ought to be understood as an adaptation to larger apartments for wealthier people than those who lived in the cities of 100 years ago. This post can be seen as a practical demonstration, illustrating the limits of deep buildings in the use case of microapartments for students.

The parameters of student housing

Student housing has specific needs:

  • Students have little disposable income, so space per capita is likely to be limited. Microapartments of 20-30 m^2 are reasonable, and in some cases they can even be smaller.
  • University is a deracinating, equalizing institution, so a high level of uniformity of design is desirable, making modernist forms more palatable than for middle-class families. Nor is there much worry about intrusion and criminality, since the students form a community. In this sense, university is akin to the military.
  • Unlike the military, university as an institution promotes individualism, and has no need for communal barracks. Social spaces are desirable, but the priority should be on individual living space.
  • Students are young and sexually active, and in recognition of that, high levels of privacy are desirable. Not only should students get individual rooms (which is also useful for minimizing respiratory infections), but also they should have their own bathrooms, showers, and kitchen facilities.

Those requirements interact well with the high-density euroblock (or courtyard building) form I’ve pushed before. Munger speaks of fixing the mistakes made by modernist housing, name-checking Le Corbusier – but the social problems of modernist towers were specific to deracinated working-class families, and not students. When people criticize modernist design of universities, it’s not about the modernist style of student housing but about hostile architecture for class and administrative buildings designed to quell student riots.

The euroblock

The euroblock is a form of housing common in Central and Northern Europe, in which residential buildings enclose an internal courtyard. Bigger cities, like Berlin, traditionally had many interior courtyards to a block, overlooked by interior wings with a view of the courtyard but not the street; smaller and richer cities tend to have bigger courtyards and no wings, and much of Berlin has demolished the wings in the postwar era as well. Here’s a wingless example from Stockholm:

The width of the building in this case is exactly twice the ratio of apartment size to window frontage, ignoring internal corridors. This building has a width of 14.6 meters, which is pretty typical for the wingless forms; winged ones are shallower, since the corners of the wings are windowless, in all cases producing a ratio of about 7.5 m. Some higher-end buildings, including some newer North American condos using the courtyard design, go up to a width of 20 m, for a ratio of 10 m.

Populating the euroblock with student housing

The proposed Munger Hall at UCSB is to sit on a site of about 120*120 meters, so let’s start with that. Munger Hall is to be solid with no interior courtyard because the dorm rooms are windowless; to have the same floor area, we need to go taller, but that’s no obstacle for our purposes. Let’s consider both a 20 meters deep design and a winged 15 meters deep one.

The light gray at the outer corners represents social spaces with corner windows; the windowless inner corners are four elevator lobbies, the high capacity necessary due to the high density of the design and the synchronized class times. If units are 2.5*10 in theory, and closer to 2.4*9 in practice, then we get a unit per 2.5 m of window frontage, which is 288 per floor (interior sides are 80 m long, exterior ones 100 m); a total of 81% of floor area is student apartments, which is low by high-rise standards, but we’re deliberately giving the outer corners to social spaces, and with the corners added back in it’s a healthy 86%.

Note that the courtyard in the middle is massive. Any larger and half of it would be a regulation football pitch. So let’s add wings, and also add function spaces in the interior corners created by the wings, possibly sacrificing some adjacent units for windows for the function spaces.

Still at one apartment per 2.5 m of window frontage, we now have 352 units per floor, but also our efficiency has dramatically fallen – only 73%, and if we add the four exterior corners back it’s still only 77%. This is only desirable if massive function spaces are important – and those can then cannibalize the near-corner apartments for window space. This is very much an upper limit to the building depth – it averages a ratio of 11.25 m.

Let’s now look at a 15 m deep design with even more wings:

Everything is scaled down for the shallower building, but that’s okay – 7.5*7.5 still makes for a staircase with some elevators, and the four interior areas can have as big elevator banks as needed. Let’s say that, ignoring corridors, apartments are 3 1/3 m by 7.5, and in practice more like 3.2*6.7. We have three apartments per 10 m of window frontage, so a total of 340 per floor. We can even squeeze more apartments this way, by offsetting the courtyard-facing apartments by one, so that there are not six to a 20 m courtyard frontage but seven, with the outer two only having half the window space, giving 376 units, at 78% efficiency. As we will see below, window width is not the constraining factor – historically, masonry buildings had small windows. Nonetheless, the courtyards are small enough that a building of about 15 floors would have a high ratio of height to courtyard size, without much direct sunlight.

Apartment plans

To be very clear, this is austere student housing. People who are not students would only live in such conditions in situations of very high housing prices, such as what I experienced in Stockholm. Here is what I might mock up of 2.5 by 9 or 3 1/3 by 6 2/3:

The elongated floor plan turns the studio’s left side into a kind of corridor, and the longer the unit, the more space is wasted on said corridor. The version on the right can fit a mini-fridge doubling as a bedside table next to the bed; the version on the left can too but a foot-side table is less convenient (this is how my grad school dorm room was set up due to lack of alternatives). Both apartments can set up a stove and kitchen sink; the natural location is below the table (to the right from the perspective of someone sitting in the chair). But the version on the left can only do so by eating into free space to move around in, where the version on the right doesn’t.

This is a matter of length-width ratios and the long corridor forcing the door to be on the short side. This is why high-end apartments can maintain the depth on the left without a problem – a middle-class one-person apartment is 40-50 m^2, so around double the micro-unit depicted above. A building designed around such studios would have the floor plate of the wingless 20 m euroblock but with half as many apartments, and then there’s ample room for everything with enough left to move around. Such a larger unit can even be set up as a one-bedroom, with the bedroom taking half the window frontage.

Note also that this problem of elongated microapartments doesn’t affect bedrooms in family dwellings. A family dwelling can be set up with rooms fronting 2.5 m of window space but with doors on the long side coming in via a central living room, which means there’s no need for a long corridor for access to the bathroom and the bed.

Get Rid of Failed Leaders, Publicly

Richard Mlynarik is too nice. He uses expressions like “we’re doomed” and “inexplicably not indicted” and “grossly corrupt,” but I get the feeling that it’s not quite as heavy a grudge as it should be.

The problem with retaining failed leaders and failing projects, you see, is that they exercise soft power. This is seen repeatedly for American rail projects, from BART to San Jose to California High-Speed Rail. But it’s not just infrastructure and not just the United States.

Anders Tegnell’s mass manslaughter

Sweden infamously rejected the typical European approach to corona, which included lockdowns of various levels of intensity and mask mandates. Its chief public health bureaucrat, Anders Tegnell, believed the only solution was herd immunity, that is infecting everyone under retirement age in order to produce herd immunity protecting high-risk populations. None of this happened: no herd immunity was achieved despite his false claims to the contrary, and the virus got into Swedish nursing homes. I computed excess deaths through the beginning of May of this year (and the death toll since has not been high enough to matter); Sweden’s amount to 16.1% of its annual death toll, compared with about 2.5-6% for Norway, Finland, and Denmark, its Nordic peers.

And because Sweden never publicly drew a line and removed Tegnell for his gross incompetence, he gets to keep peddling his denialism, globally. Early on, he was even trying to get Finland not to engage in any lockdowns, explicitly in order to infect more people and reach herd immunity; Finland wisely did not listen and became, together with Norway, the closest thing Europe had to a corona fortress. Sweden enjoys good reputation in the world, which Tegnell abused domestically and in developing countries, counseling a strategy of mass infection in Brazil and India.

The imprimatur of Sweden has enabled him to keep making excuses. He and other defenders of Sweden’s failure say that Sweden has had fewer deaths than the US or Southern European countries; in reality, 22.4% of Swedes age 18-34 lived with parents in 2019, which proportion is similar in other Nordic countries, but in Italy it’s 69.4% and in Spain 64.5% – as with much else, Southern Europe is poor, rather than poorly-governed. He’s even taken to making racist excuses, saying that Sweden has an unusually difficult problem with immigration compared with Norway – but the two countries have similar immigration levels, Sweden just thinks it’s exceptionally open and blames its various social problems (high rape rates, detriorating schools) on immigrants. But the arguments are not what’s relevant. They are weak, but so long as he stays, they seem serious, because a person with a serious position makes them. Sweden is not only mass killing its own residents very day it fails to remove this deadly failure, but also exporting mass death through force of argument.

Excuses in transportation and the people who make them

The head of the Federal Transit Administration is Nuria Fernandez, formerly of San Jose’s transit agency, VTA. This is not the job Fernandez should have. The ideal job for Fernandez is none. She has a record of failure – the San Jose extension of BART, planned and built by VTA and not by BART, is seeing prices skyrocket, currently $9.1 billion, or $950 million per kilometer in an easy environment that is not even 100% underground, only 83%. Fernandez herself, I am told, signed off on questionable design decisions, namely the use of a large-diameter single bore (as in Barcelona’s L9) with oversize station halls (unlike Barcelona) to avoid cut-and-cover construction.

And there’s the rub. One could make arguments why VTA is bad. Richard has made them in comments for many years, foreseeing that the San Jose extension was beeing built without regard for its utility. The engineering decisions are clearly unusual and indefensible; the Barcelona method’s use case is for lines slaloming under older metro lines, not for a city’s first subway, especially not one going underneath wide streets. But as long as the project keeps going, and as long as the FTA is led by a political appointee who came from VTA, the full power of the federal government screams “this is okay.” It doesn’t have the global cachet of Sweden, not in infrastructure, but domestically it sets the tone.

In theory, she could accept that she had failed and work to be better. But she hasn’t. Quite to the contrary. At Eno’s symposium about construction costs and project delivery, she gave the keynote, which decision I had already been suspicious of, but her talk was even worse. While Eno’s experts talked about the need to minimize costs at many panels and about how to do it, she talked about balancing costs with environmental impact (as if there are no environmental protections in Southern Europe) and community needs. It was a boilerplate talk, unrepentant about the fact that she is the wrong person for the job – in fact any job in transportation, management, or government.

The system and the person

The need to remove failures is true at both the level of morally repugnant incompetents like Tegnell and Fernandez and overall systems. At California High-Speed Rail, moral offenders like Quentin Kopp and Rod Diridon are long gone. But their influence persists, as does the basic structure of a politicized board using the project as other people’s money (OPM) for local priorities.

And once again, the survival of the project exerts toxic influence. The state paused it on “let’s be real” grounds during the Trump era, even as Governor Gavin Newsom (himself morally loathsome for flagrantly breaking his own lockdown rule and dining indoors with donors) insisted the project would go as planned and connecting Bakersfield with Fresno was a worthy achievement. So the project was in effect mothballed, but not officially, and so all planning has operated under the assumption that bad decisions from 15 years ago are set in stone and, more importantly, the process that produced them is an acceptable way of building infrastructure.

The need for harshness

People do not exert effort in a social vacuum. They do so for any number of personal or social reasons:

  • A sense of personal achievement and ambition
  • The desire for peer approval
  • The desire for broader social status
  • Money

The higher up they are the managerial hierarchy, the weaker all these reasons become. They are paid too well to be curious of other organizational cultures, especially ones they’ve been brought up to believe are inferior to their own, like Southern Europe to both the US and Northern Europe. Their personal success is testimony to them and to their peers that no fluency in peer organizational cultures is necessary for one’s career, and their retention in important positions affirms that society views their contributions positively.

This is why quiet change is not possible. Sweden adopted mass masking in late 2020, but by then it was too late. Moreover, it keeps Tegnell around, which sends everyone in Sweden a message: we did fine, and as a public health bureaucrat you should aspire to be like Tegnell. A street criminal can be gotten rid of quietly – in some cases having his mother shame him is enough, no legal punishment needed, because said street criminal inspires nobody. A failed official of high public stature cannot, because said official inspires followers, unless removed loudly, clearly, and humiliatingly by a higher authority. In extreme cases like Tegnell’s (but not Fernandez’s), prosecution and lengthy imprisonment are ideal to communicate the gravity of the offense.

And this is equally true at the systemic level, that is that of the project. A small project, like a particular train station rebuild or a short tramway extension, can be postponed quietly. A megaproject cannot – a visible hulk still inspires people who argue in favor of the authority of the state, which de jure keeps the project on the books, and who invent excuses why the project is in fact good and its particular decisions are defensible. It can be built as is, or it can be formally canceled with all the humiliation that implies for the agency involved and the state, or it can be formally canceled and immediately restarted with the implication that all prior decisions are subject to review (as happened with the Green Line Extension in Boston).

There’s always thee temptation to walk back things slowly and quietly. Someone in a high position of power, or a project with symbolic significance for the state or a political movement, is deemed too important to be thrown away. But that’s precisely why throwing failures away is so important. Anyone deemed too important will never challenge themselves or grow, and end up occupying a seat someone with better understanding of the modern global situation should have; anything deemed too important will likewise systemically stagnate and acquire cruft, raising cots and reducing utility. It’s an error to make such people and such projects safe, and in some cases the failure to acknowledge and punish failure can kill tens of thousands.

The TransitMatters Rail Electrification Report

At TransitMatters, we’ve just released a report about the costs and benefits of rail electrification. It’s anchored to our proposal to electrify and modernize the commuter rail system in the Boston area, but much of the analysis is broader than that. The non-Bostonian reader may still be interested in the description of construction costs of electrification and the short case studies of Israel, Denmark, Norway, New Zealand, Britain, Canada, and the United States. The latter two, covering Toronto and the Bay Area, are unusually expensive and we go over why that came to be and how it is possible to avoid them. The section on alternatives and why they are all inferior to stringing wire and running EMUs is of general interest as well, and I hope European policymakers read over and take it as a sign they should electrify more lines (ideally, all of them, as is being done right now in South Korea, India, and China).

The Toronto problem

When we came up with the cost range of $800 million to $1.5 billion, there was a lot of skepticism. The Reddit thread‘s two most common kinds of comment are “great, this can’t happen fast enough” and “it will cost billions because of unspecified MBTA problems.” As I said in responding to one of the comments, the higher-cost comparison cases all have specific reasons for their higher costs: Britain has clearance restrictions that do not exist anywhere else in the world, and Caltrain had unusual managerial incompetence regarding the related signaling project where the MBTA is actually doing well. But Toronto still looms large.

As I said on Reddit,

I’m not too worried about Caltrain’s errors, which were truly bespoke. Toronto worries me more, because while the specifics are avoidable, the ultimate cause is reproduced: Toronto and Boston are both huge cities with heavy peak commuter rail traffic and should have electrified generations ago, so now the benefits of electrification are so high that managers can afford to be careless about costs and still have above-water benefit-cost ratios.

So it is important to be careful and avoid Toronto’s problems with cost control. This means baking cost control into the program from the start, and aggressively protecting the budget from use by other actors as OPM:

  1. The budget should be set at a standard level with standard contingencies. Do not aim for the ceiling; aim for average. Nor should anyone include 100% contingency as used by Toronto; if you budget money for the project it will be used, so optimize for minimizing overall cost rather than for just-in-case funding.
  2. Designs should be standard, and variations should be accommodated only based on cost minimization. Basically, if it’s good enough for Germany, France, Denmark, Norway, Israel, etc.,, it’s good enough for the United States.
  3. If NIMBYs push back, the state should fight back. They want noise walls? Nope, EMUs are a lot quieter than diesels, quality of life will improve. They want trenches? Nope, that’s too expensive.
  4. Under no circumstances should passenger rail electrification money be used for corporate welfare for freight rail companies. They can pay their own way for clearance for double-stacked containers.

The importance of maximum electrification

Based on the observations that the lifecycle costs of DMUs are about twice those of EMUs, and that operating and capital costs are both driven by the peak rather than off-peak, it’s possible to establish financial rates of return on electrification. Not counting the speed and reliability benefits to passengers, the ROI is around 0.3-0.5% per US-size car per hour at the peak. Lines that run 8-car trains every 15 minutes at rush hour run 32 cars per hour and so have an ROI of 10-16%; this is why outside the US and Canada, cities that run such long trains at such frequency have long electrified their tracks.

The problem is that electrification is relatively unfamiliar in North America. It exists, but is sporadic, and there have been very few recent projects, so managers think it’s a Herculean task. In Boston I’ve seen reticence to wire more track due to institutional conservatism, even in plans that spend comparable amounts of money on things the region is more used to, like station platform upgrades and extra tracks. Worse, I’ve seen this in New Jersey, which is largely already electrified but uninterested in finishing the job.

Against such conservatism, it’s important to remember that failure to undertake a high-value investment isn’t any more moral than a large investment that goes to waste. When your ROI hits double digits, you waste public benefits by avoiding or even just delaying the project – and the above calculation comes just from savings on operating, maintenance, and capital acquisition costs, without the large benefits to passengers, the environment, etc.

Can large cities afford not to electrify? Yes. They have money for many kinds of waste, including for forgoing the benefits of commuter rail electrification. But just because they can afford to waste money and social benefits doesn’t mean they should. So, please, no talk of DMUs, or bi-modes, or pilot programs, or batteries – just wire your system already and import some high-quality EMUs.

Early Commitment

I want to go back to the problem of early commitment as I explained it two months ago. It comes out of research done by Chantal Cantarelli and Bert van Wee about Dutch cost overruns, but the theory is more generally applicable and once I heard about it I started seeing it in play elsewhere. The short version is that politically committing to a megaproject too early leads to lock in, which leads to compromised designs and higher costs. The solution, then, is to defer commitment and keep alternatives open as much as possible.

The theory of lock in

The papers to read about it are Cantarelli-Flyvbjeerg-Molin-van Wee (2010), and Cantarelli-Oglethorpe-van Wee (2021). Both make the point that when the decision to build is undertaken, it imposes psychological constraints on the planners. They are not long or difficult papers to read and I recommend people read them in full and perhaps think of examples from their own non-Dutch experience – this problem is broader than just the Netherlands.

For example, take this, from the 2010 paper:

Decision-makers show evidence of entrapment whenever they escalate their commitment to ineffective policies, products, services or strategies in order to justify previous allocations of resources to those objectives (Brockner et al, 1986). Escalating commitment and justification are therefore important indicators of lock-in. The need for justification is derived from the theories of self-justification and the theory of dissonance which describe how individuals search for confirmation of their rational behaviour (Staw, 1981; Wilson and Zhang, 1997). This need arises due to social pressures and “face-saving” mechanisms. The involvement of interest groups and organizational pushes and pulls can also introduce pressures into the decision-making process, threatening the position of the decision-makers, who may feel pressure to continue with a (failing) project in order to avoid publicly admitting what they may see as a personal failure (McElhinney, 2005). “People try to rationalize their actions or psychologically defend themselves against an apparent error in judgment” (Whyte, 1986) (“face-saving”). When the support for the decision is sustained despite contradicting information and social pressures, the argumentation for a decision is based on the need for justification.

The focus on face-saving behavior leading to escalation is not unique to the literature on transportation. In international relations, it is called audience cost and refers to the domestic backlash a political leader suffers in case they back down from a confrontation they were involved in earlier; this way, small escalations turn into bigger ones and eventually to war, or perhaps to a forever occupation.

There are a number of consequences of lock in:

  1. Projects will follow designs set long ago, especially ones that were hotly contentious. For example, California High-Speed Rail has stuck with the decision to build its alignments via Palmdale and Pacheco Pass, since the possibilities of changing Palmdale to the Grapevine/Tejon alignment and Pacheco to Altamont Pass both loomed large (there was a NIMBY lawsuit trying to force a change to Altamont). However, at the same time, there are plans to potentially run the partially-built system without electrification, since that issue was never in contention and is not part o the audience cost.
  2. There are unlikely to be formal cancellations. California is again a good example: high-speed rail lives as a hulk, not formally canceled even when the governor said of the idea to complete it, back during the Trump administration, “let’s be real,” defending the initial construction segment between Bakersfield and Fresno as valuable in itself. Formal cancellation is embarrassing; a forever construction project is less visible a failure.
  3. Prioritization is warped to tie into real or imagined connections with the already-decided project. California is not as clear an example of this as of the other two points, but in New York, once the real (if not yet formal) decision to go forward with Second Avenue Subway was made in the 1990s, the Regional Plan Association tied in every proposed expansion plan to that one line.

Surplus extraction

Cantarelli-van Wee treat early commitment as a problem of bad planners, who become psychologically wedded to potentially incorrect solutions. However, it is instructive to shift the locus of moral blame to surplus extraction by political actors, such a local politicians, power brokers, and NIMBYs.

In the story of HSL Zuid, much of the extra cost should be blamed on excessive tunneling. In the flat terrain of Holland and near-coastal Brabant, no tunneling should have been needed. And yet, the line is 20% underground, partly to serve Schiphol, partly to avoid taking any farmland in the Groene Hart. The Groene Hart tunneling has to be understood in context of rural NIMBYism (since at-grade solutions to habitat loss exist in France).

In this formulation, the problem with lock in is not just at the level of planners (though they share most of the blame in California). It’s at the level of small actors demanding changes for selfish reasons, knowing that the macro decision has already been made and the stat cannot easily walk away from the project if costs rise. These selfish actors can be NIMBY, but they can equally be local power brokers wanting a local amenity like a detour to serve them or a station without commercial justification. In Germany, an extra layer of NIMBYism (albeit not on connected with lock in – we have late commitment here) is demands to include freight on high-speed lines, in order to take it off legacy lines, which design forces gratuitous tunneling on high-speed lines in order to moderate the grade.

California is a good example of a non-NIMBY version of this. The state politically committed to building high-sped rail in the 2008 election, for which it showed clear maps of the trains detouring via Palmdale and going to San Francisco via Pacheco Pass. By the time further environmental design showed that the Los Angeles-Palmdale route would require tens of km more tunneling through Soledad Canyon than anticipated to avoid impact to an ecologically sensitive area, the state had already pitched Palmdale as a key high-speed commuter suburb, and Los Angeles County made housing plans accordingly. The county subsequently kept agitating for retaining Palmdale even as other alignment changes in the area were made, turning Palmdale into its pet project.

The planning literature undertheorizes and understudies problems arising from localism. In conversations with people in the European core as well as the United States, there’s an unspoken assumption that the community is good and the state is bad. If the community demands something, it must represent correction of a real negative externality, rather than antisocial behavior on behalf of self-appointed community leaders who the state can and should ignore. It doesn’t help that the part of Europe with the least community input is the Mediterranean countries, which Northern European planners look down on, believing any success there must be the result of statistical fudging.

The solution: late commitment

To reduce costs and improve projects, it’s best to delay political commitment as late as possible. This means designing uncertain projects and only making the decision to build at advanced stages of design – maybe not 100% but close enough that major revisions are not likely. The American situation in which there is no regular design budget so agencies rely on federal funding for the design of the projects they use the same federal funding for leads to bad outcomes over and over. California, which went to referendum without completing the environmental design first, takes the cake.

Late commitment is thankfully common in low- and medium-cost countries. Germany does not commit to high-speed rail lines early, and, judging by Berlin’s uncertainty over which U-Bahn extensions to even build, it doesn’t commit to subways early either. Sweden is investigating the feasibility of high-speed rail but rail planners who I talk to there make it clear that it’s not guaranteed to happen and much depends on politics and changes in economic behavior; overall, Nordic infrastructure projects are developed by the civil service beyond the concept stage and only presented for political negotiation and approval well into the process. Southern European planners com up with their own extension programs and politically commit close to the beginning of construction.

Intercity Rail Routes into Boston

People I respect are asking me about alternative routes for intercity trains into Boston. So let me explain why everything going into the city from points south should run to South Station via Providence and not via alternative inland routes such as Worcester or a new carved-up route via Woonsocket.

As an explanation, here is a map of the region’s commuter rail network; additional stations we’re proposing for regional rail are in turquoise, and new line segments are dashed.

Geographic map of the TransitMatters Regional Rail proposal as it currently stands

Observe that the Providence Line, the route currently used by all intercity trains except the daily Lake Shore Limited, is pretty straight – most of it is good for 300+ km/h as far as track geometry goes. The Canton Viaduct near that Canton Junction station is a 1,746 meter radius curve, good for 237 km/h with active suspension or 216 km/h with the best non-tilting European practice. This straightness continues into Rhode Island, separated by a handful of curves that are to some extent fixable through Pawtucket. The fastest segment of the Acela train today is there, in Massachusetts and Rhode Island.

The Worcester Line is visibly a lot curvier. Only two segments allow 160 km/h running in our regional rail schedules, around Westborough and immediately west of Grafton. This is why, ignoring intercity rail, our timetables have Boston-Providence trains taking 47 minutes where Boston-Worcester express trains take 45 minutes with 4 fewer stops or 57 minutes with 5 more, over the same route length. And the higher the necessary top speed, the larger the trip time mismatch is due to curves.

Going around the curves of the Worcester Line is possible, if high-speed rail gets a bypass next to I-90. However, this introduces three problems:

  1. More construction is needed, on the order of 210 km between Auburndale and New Haven compared with only 120 between Kingston and New Haven.
  2. Bypass tracks can’t serve the built-up area of Worcester, since I-90 passes well to its south. A peripheral station is possible but requires an extension of the commuter rail network to work well. Springfield and Hartford are both easy to serve at city center, but if only those two centers are servable, this throws away the advantage of the inland route over Providence in connecting to more medium-size intermediate cities.
  3. The two-track section through Newton remains the stuff of nightmares. There is no room to widen the right-of-way, and yet it is a buys section of the line, where it is barely possible to fit express regional rail alongside local trains, let alone intercity trains. Fast intercity trains would require a long tunnel, or demolition of two freeway lanes.

There’s the occasional plan to run intercity rail via the Worcester Line anyway. This is usually justified on grounds of resiliency (i.e. building too much infrastructure and running it unreliably), or price discrimination (charging less for lower-speed, higher-cost trains), or sheer crayoning (a stop in Springfield, without any integration with the rest of the system). All of these justifications are excuses; regional trains connecting Boston with Springfield and Springfield with New Haven are great, but the intercity corridor should, at all levels of investment, remain the Northeast Corridor, via Providence.

The issue is that, even without high-speed rail, the capacity and high track quality are on Providence. Then, as investment levels increase, it’s always easier to upgrade that route. The 120 km of high-speed bypass between New Haven and Kingston cost around $3-3.5 billion at latter-day European costs, save around 25 minutes relative to best practice, and open the door to more frequent regional service between New Haven and Kingston on the legacy Shore Line alongside high-speed intercity rail on the bypass. This is organizationally easy spending – not much coordination is required with other railroads, unlike the situation between New Haven and Wilmington with continuous track sharing with commuter lines.

If more capacity is required, adding strategic bypasses to the Providence Line is organizationally on the easy side for intercity-commuter rail track sharing (the Boston network is a simple diagram without too much weird branching). There’s a bypass at Attleboro today; without further bypasses, intercity trains can do Boston-Attleboro in 11 fewer minutes than regional trains if both classes run every 15 minutes, which work out to 25 minutes per our schedule and around 32 between Boston and Providence. To run intercity trains faster, in around 22 minutes, a second bypass is needed, in the Route 128-Readville area, but that is constructible at limited cost. If trains are desired more than very 15 minutes, then a) further four-tracking is feasible, and b) an intercity railroad that fills a full-length train every 15 minutes prints money and can afford to invest more.

This system of investment doesn’t work via the inland route. It’s too curvy, and the bypasses required to make it work are longer and more complex to build due to the hilly terrain. Then there’s the world-of-pain segment through Newton; in contrast, the New Haven-Kingston bypass can be built zero-tunnel. But that’s fine! The Northeast Corridor’s plenty upgradable, the inland route is bad for long-distance traffic (again, regional traffic is fine) but thankfully unnecessary.

The Scope and Future of Our Project on Costs

I was on a panel at Eno’s symposium on costs, talking with other teams investigating comparative construction costs. We worked off a list of questions Eno’s Robert Puentes had sent us before, knowing that the list was too long for five people (me, Eric, Laura Tolkoff, Ethan Elkind, Romic Aevaz) to cover in an hour. So for more completeness, here are my responses – and pay attention specifically to issues of scope and what we should be doing in the future. In particular, as we’re getting funded to do other things, we will likely have room in the budget to add a few more cases, and hire people who can put them together.

What were your key takeaways on the extent of our cost premium, and key cost drivers?

I blogged this just before the panel. The only major headers I’ll add are poor interagency coordination in the United States, especially for projects that are or touch commuter rail, and a political system full of real and imagined veto points. The imagined veto points are not unique to the US – the UK, Germany, and the Netherlands all have visible problems with excessive tunneling on high-speed rail projects coming from NIMBY demands, NIMBY demands that at least in the first two cases are paper tigers that the state can ignore if it doesn’t mind a few news cycles with negative headlines.

Questions on scope

There were three separate questions on this, since our approaches differ – Eno has more cases covered in less depth (and we made sure to pick disjoint comparison cases from theirs), Berkeley focuses on California projects. So we went through questions about what our respective scopes and limitations are:

  1. Could you walk us through the general scope and bounds of your work?
  2. What were some of the limitations you ran into when collecting information on costs/timeline, and what recommendations would you have to improve data reporting for projects?
  3. What are some of the lingering questions or areas for future study that your teams have flagged?

The answer to all three is that our scope – the six cases – looks at specific issues rather than general ones. The forest comprises trees and cannot be studied as an ecosystem until one understands the biology of the tree species therein. But then, understanding the biology of the tree species requires understanding the ecosystem they have evolved in; the reason we do cases simultaneously is that hearing about issues arising in one place informs our work on other places.

That said, I think it matters that none of our six cases is typical. Medium-cost environments like France, Germany, and Japan are unfortunately not in scope; I’ve read a lot of work on cot issues plaguing Grand Paris Express, but unfortunately not in any global or even just European comparative sense. All of our cases are Western (for infrastructure purposes Turkey is a Western country); this matters because, while European and East/Southeast Asian costs are broadly the same, both covering the entire global range short of American costs, there are notable differences in how they build, so it’s plausible that there re things one side does right that the other doesn’t in both directions. All of our cases are first-world or, in Istanbul’s case, 1.5th-world.

This means that we would like to add cases. Attractive targets include anything in Spain, to beef up our set of low-cost examples, and then cases that represent examples we didn’t study, that is places that are medium-cost, non-Western, or not in or in the penumbra of the developed world. My suspicion is that medium-cost examples will interpolate practices – Germany and France both vaguely appear to mix good Scandinavian or Southern European behavior with bad British and American behavior, each in its own way. But I do not know and that’s why we’d like to add cases. In middle-income countries like Russia, Mexico, Brazil, and China, and in low-income ones like India or the Philippines, I do not really know what to expect and my only explanation so far is completely different from any first-world pattern.

We should have a budget for this, but I don’t yet know how many cases we can juggle in addition to where we’re going to shift the main of our attention starting in early 2022, that is high-speed rail and a synthesis for the Northeast Corridor. Most likely other people will write the cases (for pay of course) and we will supervise in between looking at the history and technical data of the Northeast Corridor.