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.

Consensus and Costs

I’m in the middle of an online symposium at Eno about construction costs; I talked on Tuesday and I think there will be a recording made available later. The conference is good by a lot of standards, including the “do they tell me things I don’t know about costs” standard. But for now, I want to address one point made repeatedly in interviews re some low-cost cities: the argument from consensus. It’s wrong, and leads to very wrong conclusions.

What is the argument from consensus?

In Eno’s lowest-cost comparison cities, like Madrid, there’s political consensus in favor of building more subways. Repeated panels gave this example of how in the 1990s and 2000s, PP and PSOE both supported subway construction and promised to build more in their election campaigns for the Community of Madrid. PSOE in fact attacked PP saying its proposals were unrealistically ambitious, but then the Madrid Metro expansion opened as planned. In such a political environment, no wonder planners had leeway to build the system without much interference.

Why is this wrong?

Britain has bipartisan political consensus in favor of both Crossrail and High Speed 2, both of which are explicitly supported in both parties’ manifestos. Its construction costs are still Europe’s highest.

More to the point, the United States is not uniformly an environment where public transportation is a partisan flashpoint, because in most of the cities that build subways, the Republican Party does not exist. The closest thing to a Republican Party in New York is the Manhattan Institute, which criticizes unions incessantly but does not call for ending public support for the subway and refrains from making the anti-transit arguments made by national Republican outfits like Reason and Cato. The last Republican mayor, Rudy Giuliani [sic], tried to expand the subway to LaGuardia. I’ve met New Yorkers who view Giuliani as a savior and who are ant-immigration climate denialists and thy too think the city and state should make the subway better – if anything they treat its poor state as evidence that the Democrats can’t govern.

This consensus does not lead to low costs. Why would it? There is no respect for planners or engineers. The consensus in New York means every governor installs their political cronies at the head of the agencies involved. None of the mechanisms that make Madrid Metro work is present.

The consequences

Just having more political support for subway construction is not going to by itself make things better. American states where investment is safe from cancellation do not do better than ones where one election could spell doom for the investment program. Sea changes are required, not just more public support.

Quick Update on Where We are on New York Costs

The New York report is still a few months to go (the next ones to release on our list will be Istanbul and Italy), but from interviews, we can get a rough estimate of where the problems are. I want to stress rough and there are still extra sanity checks we need to do, both locally to New York and in comparisons. But a picture of the breakdown of what’s going wrong is starting to emerge.

Procurement

Procurement issues roughly double costs. This includes everything related to contracting, including the change order regime, the lack of competition between contractors for large projects, the qualify-to-bid system, risk compensation by contractors, and so on.

This is not quite the same as the change order problem seen in California, where Tutor Perini infamously bids low and overcharges on change orders; New York has regulations to prevent that, but the cure is sometimes worse than the disease. Overspecified contracts reduce flexibility and increase costs; normal design-bid-build systems let the building contractors make small modifications based on meter-scale geology and short-term changes in material prices, but New York is inflexible. The design-build solution is more flexible but removes a layer of public oversight and increases private-sector risk, so costs do not go down.

There is a blacklisting system, called disbarment, but it’s too onerous and goes further than just finding repeat offenders like Tutor and blacklisting them, so contractors bid higher to avoid the appearance of cost overrun. Some of this is not seen in Second Avenue Subway – disbarment is a Cuomo policy that was not present then, and must therefore be seen as part of the per-km cost increase from phase 1 to phase 2 even though phase 2 is easier.

Utilities

Roughly everyone involved in infrastructure construction in New York has told us some variation of the story that New York has complex underground utilities and getting around them is a challenge. This is not exactly what is going on – there’s stuff underground in Paris too – but is correct on the level of agency turf battles. All of the following problems are institutional, coming from our sources:

  • Utilities such as Con Ed and DEP don’t maintain up-to-date databases of what’s precisely down there, so every time there’s a project, there’s a surprise, like an electric cable that was laid around the footprint of a car that was parked during construction rather than moving as it was supposed to.
  • The knowledge that the utilities have is closely-guarded because who is the MTA to tell them to divulge secret information like where the pipes are?
  • The MTA doesn’t run interference for its own contractors, so the contractors are on their own when dealing with the utilities, not just for underground work but also routine things like elevator installation and elevated station repairs.
  • The utilities demand that their own workers supervise changes to their infrastructure. There is no state- or city-level coordination of infrastructure construction and maintenance.
  • The utilities use subway capital money as OPM for their own wishlists for larger pipelines and upgraded infrastructure.

Finally, there is a fear-itself problem: dealing with utility relocation is so painful that the MTA avoids it even when doing so would be cheaper than digging deeper. I cannot give a precise estimate for the impact of utilities writ large, but a factor of 2, counting the fear-itself factor (which is large), is about reasonable.

Labor

Labor productivity in New York is low, and wages are elevated due to the use of local workers (in Stockholm the tunnel workers come from all over Sweden, and wages and benefits are high but somewhat less than in New York). This covers both blue- and white-collar labor: many different agencies, departments, and regulators demand to have their own supervisor down there looking at the work being done.

This is the part where I’m least certain of the impact. The reason is that labor productivity numbers beyond patterns that have been covered amply before are hidden behind layers of subcontracting – there is far less transparency on this in the US than in any other country we have looked at. Moreover, management-labor relations are so strained that planner interviews are not a perfectly reliable source; figuring out how much of the overstaffing problem was about too many white-collar supervisors and not just sandhogs took a while.

The impact of labor is best explained as, US infrastructure breaks down as 40-50% labor, vs. 20% in Turkey; I don’t have a breakdown in Sweden yet, where wages are high but labor efficiency is very high to reduce costs. In isolation, some labor costs scale with everything else. For example, contractor risk is added as an overhead on top of everything and is not part of the breakdown between labor, materials, and equipment. Likewise, delays induced by unexpected utilities require paying overtime during the wait, so labor costs scale to some extent. However, using the wrong material because the contract micromanaged what the contractors could use would be seen as material costs.

Design issues

Design is clearly an important factor but is even harder to quantify than labor. This does not include the preference for mined stations over cut-and-cover stations in SAS phase 1 – that was partly fear of utility work – and station costs were at a far larger premium than tunneling. It’s better to look at the project work for the 96th Street station, which was as expensive as the mined 72nd and 86th Street stations, and was an unusually large dig (7 blocks long) due to unusual but understandable geological issues. But even so, the station was costlier than it should have been based on dig volume.

Some design problems are defensive. Two notable ones:

  • TBMs have to work 24/7 to avoid a cave-in. However, due to either real or predicted neighborhood complaints about noise, trucks did not remove the muck overnight. The overnight storage chamber for the muck cost $20 million. I do not know if this made things better; my personal experience in Berlin is that the worst time for truck noise is 6-9 am and this doesn’t help with sleeping.
  • The MTA spent a lot of effort on shoring up a building that was damaged due to ground settlement in construction. The building was subsequently demolished anyway to make room for a taller building for transit-oriented development.

In addition, the speed of tunneling in New York is notably low. I do not know why, nor do I know the net cost impact of it, though at this point I suspect that by itself it’s a secondary issue to defensive design; we are investigating further.

The biggest question of the impact of design questions is to what extent the mined stations for SAS phase 1 were defensive against community impact (as mentioned by some of our sources) as opposed to utilities work. But, again, phase 2 stations are cut-and-cover except 125th Street, and costs are higher as procurement keeps getting worse.

Fire safety is another aspect. Contrary to what too many New Yorkers have told us, the American fire code in NFPA 130 is not unique to the United States. China uses the same code, as does Turkey; Spain uses a very similar code. However, the interpretation of the code leads to visible scope that does not exist elsewhere, including full-length mezzanines and obtrusive ventilation structures.

Everything together

Procurement and utilities together explain a factor of 4 cost difference. The rest is more hazily estimates; labor gets us to a factor of 5-6 (and it will get more precise in the next few months). Design is the big question mark of whether we can promise a factor of 7 or 15 reduction in costs.

Second Avenue Subway is a factor of 7-8 too expensive relative to the global average, but the global average isn’t necessarily the baseline – much of it includes Anglosphere subway with some of the same problems as New York, and non-Anglo examples near the average, such as Paris, have their own visible problems with costs by comparison with lower-cost examples. The baseline is not the lowest-cost places either – they tend to do unique things like building very short platforms (though Stockholm and some of the extensions in Italy clock at 140 meters to New York’s 180, and Istanbul has lines at 180). But a baseline around $150 million/km is reasonable to aim for. So a factor of 15 reduction relative to SAS phase 2 is exactly what we look for, and a factor of 7 still gets New York to be better than Germany and Japan and close to Paris.

So we’re getting close. Not quite there yet – but something that looks like an actionable recipe, provided reasonably competent political leadership looks achievable.

Express Rail Tunnels and Regional Rail Capacity

In three cities that I know of, there are plans to deal with an incipient regional rail capacity crunch by building a new tunnel: Tel Aviv, Hamburg, London. The route in question in all cities already has regional rail service making frequent urban stops as well as longer-distance intercity trains. Setting Tel Aviv aside – new tracks are not necessary there at all – both Hamburg and London have a choice of what to build in the tunnel. In both cases, the answer must be intercity rail and not regional rail. This affects Crossrail 2 in London, currently shelved but still in active planning, as well as plans for Hamburg Hauptbahnhof-Altona capacity improvements.

The dominant factor in the cost of an expensive urban railway in a constrained environment is the stations. Low-cost countries build very cheap stations, but that’s true in outlying areas, urban as they may be, and not in city center areas under and around older subways. What’s more, Britain and Germany are not low-cost countries. German costs are somewhat higher than the global median, British costs among the world’s highest. Thus, keeping down station costs is paramount – and express tunnels have fewer stations than local tunnels.

Normally, the express vs. local issue is not relevant to a new urban rail line. Yes, more stations are more expensive, but on a line designed to open up service to a new area, more stations also provide more access, so the extra cost is often worth it. This is true even for urban subways that act as relief lines, like Second Avenue Subway, a relief line for the Lexington Line: more stations provide better local access and therefore increase the line’s relief value.

However, when the problem comes from regional or longer-distance capacity, all of this goes out the door. Crossrail 2 includes a long tunnel from Central London all the way to Wimbledon not because of purely local needs but because of very high rail usage along the South West Main Line. In Hamburg the problem is similarly about the main line between Hauptbahnhof and Altona – local traffic is saturated on the S-Bahn, and all other trains have to squeeze on the remaining two tracks of the Verbindungsbahn. Thus, capacity expansion should involve a tunnel with the fewest number of stations, on the most express services.

And yet both cities are doing it wrong. Hamburg is planning an S-Bahn tunnel, with the existing S-Bahn route then given over to regional trains, to be segregated away from the intercity trains. But there are already two Hauptbahnhof-Altona S-Bahn routes – that’s not where the service need is. Instead, new tunnels should go between the stations without stopping, to reduce costs, hosting intercity trains while regional trains take over the existing intercity tracks.

London is likewise planning on an undulating connection between Clapham Junction and Wimbledon, with links to other parallel north-south lines in the area. This is not good planning – those new stations are inordinately expensive and not needed for network connectivity. If there is no way to six-track the South West Main Line above-ground by replacing the sloped berm with retaining walls, it’s the fastest trains that should go underground, to save money on stations. Crossrail 2 is a £31.2 billion project; I don’t think Paris has spent this money on all Métro and RER lines in the region to date combined, and Grand Paris Express, at a broadly similar cost, includes 160 km of tunnel. It’s necessary to economize and build the tunnels that are necessary, and not the ones London would like to have.

Rapid Transit as an Amenity

An urban rapid transit system needs to be understood as both a consumption amenity and a production amenity. As a consumption amenity, it lets people have access to more of the city, for work as well as recreational travel; people pay a premium to live close to the subway. As a production amenity, it makes it easier to build dense office clusters and expect that people can get to work without too much traffic; businesses pay a premium to locate in city center. This means that such infrastructure is generally good for the city’s economy and the well-being of the people in it, without prominent distributional impact.

City center and rapid transit

I wrote a thread two years ago about CBD job concentration. The thread looks at the total number of jobs in the central 100 km^2 of a metro area, which figure is used because it’s about the land area of Paris plus La Défense and INSEE data only exists at the level of the commune or arrondissement (see for example here). Pointing out that Dallas and Atlanta’s central 100 km^2 have only about as many jobs as Vancouver’s and half as many as San Francisco’s, I talked about the need to build bigger CBDs to entice higher transit ridership.

This looks weird to people who immediately associate European cities with short buildings and polycentricity and American ones with tall buildings and monocentricity. But at the scale of 100 km^2, European cities are far more centralized. Paris has 2.2 million jobs in the central 100 km^2, the Bay Area 850,000, Dallas and Atlanta 400,000 each.

And as I threaded about this, it was pointed out to me that Dallas does not have very strong demand for office space in city center. Parisian commercial rents in the 8th are very high, indicating demand for taller buildings than Europeans find acceptable; Texan commercial rents in city centers indicate no such pent-up demand, and the Dallas CBD has high vacancy rates. In Los Angeles, the center is weak as well – in a metro region 50% larger than Paris, the most gerrymandered central blob, not at all centered on Downtown Los Angeles but rather reaching from Downtown to Century City and UCLA, has around 800,000 jobs. The highest pent-up demand in Downtown LA is residential and not commercial.

I bring this up because this indicates rapid transit is a strong amenity for producers: they pay a premium to locate in city center, provided a large system exists to feed commuters to their offices. This is the case in New York, Paris, and other transit cities, but notably not in large auto-oriented cities like Los Angeles and Dallas.

…but it’s not just about work

Transit cities are not just places of production. The city is simultaneously a production amenity and a consumption amenity. Pure production amenities, like the quality of the harbor, the location relative to logistics facilities, and the tax rate on businesses, do not draw in people except insofar as they lead to higher wages. But transit cities do draw people in – residential rents are higher where job access is better and even where general access to non-work destinations is better.

This effect happens at several levels. The highest level is the regional one: a transit city is less polluted than an auto-oriented alternative of the same size, and clean air is a consumption amenity. The lowest level is the block: the construction of rapid transit raises property values near stations. In between, there are the benefits of access, which like the regionwide benefits are diffuse; it’s hard to point out an exact set of winners and losers.

This is not just a matter of job access. A transit city is good at access to special amenities, of the type that people do not go to very regularly. Ones that people do go to regularly do not require public transit: an auto-oriented medium-size metropolitan region can perfectly well provide high-quality retail choices with plenty of variety. I don’t recall missing anything at the shopping centers of the French Riviera, nor hearing complaints about same from Americans in similar-size regions.

But once the options get more specialized, size and transit accessibility become important. Los Angeles notably has amazing restaurants from just about every ethnic and regional tradition on the planet and also it takes two hours to drive to them because they’re strewn about five counties with no fast transit options. It’s nothing like New York and Paris, which have plentiful options as well but they’re within 30-60 minutes by train.

Specialized restaurants are a convenient example – they won’t cluster in city center because that’s expensive, but they’d like to be in near-center areas, perhaps in the central 100 or 200 or 500 km^2 but not the central 5 or 10 km^2. But the same issue occurs for everything else: museums, visits to friends throughout the region, etc.

The implication of dual amenities

Rapid transit is annoying to analyze in that it doesn’t break down neatly as for one group or another. It’s incredibly diffuse, and the only definitive interest group that benefits from its existence more than anyone else, the providers, is small and doesn’t always benefit from making it more efficient. There are no distributional impacts to mitigate or take advantage of; the environmental impacts are uniformly positive because of the competition with cars and auto-oriented development; the local benefits of access are real but require building an expansive system with hundreds of stations each generating local benefits in a small radius.

The result is that it bores people who enjoy conflict. There is not much there for the marketer to bite on – transit as a product is optimized when everyone uses it. The upshot of the fact that rapid transit is simultaneously a production amenity and a consumption amenity is that there is nothing there for people who enjoy dwelling on class conflict or on postmaterialist New Left notions of conflict, either. Socialist states have built great transit systems once things have settled down and it’s time to rebuild, but would-be socialist revolutionaries in non-socialist states find it boring. Likewise, New Left green politics is much more interested in pure consumption amenities like bike paths and street redesign than in dual amenities like rapid transit, which also benefits the staid corporations green voters define themselves against. From the other direction, people whose political identity is indifference to the needs of anyone who’s not a business don’t find transit interesting, even though it clearly benefits business, because it doesn’t offer opportunity to engage in right-populist or Thatcherite politicking: it’s possible to run the system like a business, but actually kicking out visibly poor people fragments the market and reduces frequency.

Cost- and Project-Centric Plans

I did a poll on Patreon about cost issues to write about. This is a close second, with 11 votes; other people’s money won with 12, whereas neighborhood empowerment got 8 and will not be on my docket.

There are infrastructure investment programs defined around the specific projects funded: Crossrail, Second Avenue Subway, Grand Paris Express, Nya Tunnelbanan, the Toronto RER, Marmaray. Then there are programs defined around costs, where one constantly hears the project defined by its budget rather than what it produces; these are all in the United States, and include the entire slates of Los Angeles and Seattle rail extensions, and to some extent also California High-Speed Rail and Gateway. The latter appears like bad practice for cost minimization.

What’s the problem?

In isolation, I’d have expected cost-centric plans to be more prudent with the budget – there’s less room for overruns. This is related to Swiss practice, which is project-centric but also requires projects to go to referendum on the precise amount, which has disciplined cost overruns in most cases and also kept absolute costs low. However, the fact of the matter is that the only places that use cost-centric plans have high costs, having recently risen from levels that were not so bad 20 years ago. So why?

My suspicion is leakage. This is getting to be less general and more specific to the situation of California and its sales tax measures, but the way it works is, there is an amount that proponents think they can go to ballot on, and then they work the slate of projects backward. In theory, this is supposed to discipline the planners into better behavior: the amount of money is truly fixed, and if costs go up, it delays the entire program. In practice, there is no prior discipline about what infrastructure should be included, and thus the slate is decided politically on a place-based plan.

Further leakage occurs when buying off additional interest groups. Soon enough, one useful if very expensive subway line, like the Purple Line Extension in Los Angeles or the Ballard-West Seattle LRT, is bundled into a huge program alongside bus operating subsidies, road money, and low-usage lines to lower-density areas.

I can’t prove that this is the result of budget-centric planning. The comparison examples I have – all high-cost, politicized North American projects – exhibit leakage as well, but less of it. The Green Line Extension in Boston had extensive local leakage in the first iteration of the project, like the Somerville Community Path, but it wasn’t paired with less useful infrastructure elsewhere. Second Avenue Subway Phase 1 was paired with East Side Access and the Broadway subway in Vancouver is paired with a SkyTrain extension deeper into Surrey toward Langley; in both cases, the less useful projects are nonetheless more useful on a likely cost per rider basis than any of the American West Coast leakage and compete with the more useful projects. ESA is probably going to end up $60,000/rider, not much worse than GLX and probably about the same as the Purple Line Extension depending on how much transit-oriented development Los Angeles permits.

Place-based extraction

Place-based politics is a scourge and should be eradicated whenever possible. What it does wherever it is not suppressed is create political identification among local and regional power brokers not with the piece of infrastructure but its cost. The reason is that evaluating transportation needs is too technocratic for the attention span of a local politician, whereas the budget is a straightforward measure of one’s importance.

Once local actors are empowered, they make further demands for irrelevant extras (“betterments”), or construction techniques that spend too much money to avoid real or imagined negative local impact. People with a local identity don’t care about public transit much – public transit takes riders to other localities, especially city center, whereas the locally-empowered minority of people who work locally has little use for it and drives everywhere.

Local empowerment is not unique to budget-based infrastructure. It was a major drag on GLX and at least a moderate one on SAS Phase 1, neither of which is budget-based. The Central Subway and BART to San Jose projects are both place-based vanity, for Chinatown and San Jose respectively, but even these projects are smaller in scope than the Los Angeles or Seattle ST3 leakage. There’s just more surface area for it when advocates lead with a budget, because then every local hack sees an opportunity to make a claim.

The place-based politics in the Northeast is much broader and more regional: SAS, a city project championed by then-Assembly speaker Sheldon Silver (D-Lower East Side), was balanced with ESA, a suburban project serving the base of Governor George Pataki (R-Peekskill, but the state Republicans were based on Long Island). Metro Vancouver’s place-based extraction follows the same schema: if Vancouver gets a useful SkyTrain extension, Surrey must get an extension too regardless of usefulness. Massachusetts is likely to be in a similar situation with the TransitMatters Regional Rail program: RR serves the entire east of the state, and must be balanced with a Western Massachusetts project, for which we propose the still-useful East-West Rail program connecting Boston and Springfield.

In contrast, the situation in California and metropolitan Seattle is much worse – useful lines in Los Angeles are paired with many layers of leakage, as different groups make claims on the pot of money. This way, Los Angeles doesn’t build as much useful transit as New York and Boston even though its construction costs are comparable to Boston’s and much lower than those of New York, and even though it makes large amounts of money available for transportation by referendum.

Are jobs a cost or benefit?

Like place-based extraction, the use of infrastructure as a jobs program is terrible everywhere in a modern developed country where construction is not a labor-intensive zero-skill job, and should be eradicated. And like place-based extraction, I think – and am less certain than on the other points – there is more surface area for this when the program is about a budget and not a piece of infrastructure.

The mechanism is the same as before: once money becomes available, local labor groups descend on it to make claims. Promises of job creation are thus always local, including beggar-thy-neighboring-state demands for local rolling stock construction. These occur for both budget-based plans (like the Los Angeles light rail fleet) and project-based ones (like the new Red and Orange Line cars for Boston, built in Springfield due to place-based extraction). However, it’s easier to make a claim when the political discussion is about how to spend $X and not how to optimally produce a desired piece of infrastructure.

The way forward

The American West Coast’s problem of budget-based planning is, thankfully, easy to solve, because it’s been solved in other parts of the same country. The Bay Area has less of it than Southern California and the Pacific Northwest (but it’s not free of it – many of the specifics of California High-Speed Rail’s failure come from Bay Area power brokers hoping to use it as a slush fund). The Northeast doesn’t have it at all. Los Angeles is likely to be forced in that direction anyway, because it’s running out of sales tax capacity – the already-approved measures are spoken for through the 2050s.

The impact is likely not a matter of straight construction costs in dollars per kilometer. Rather, it’s about leakage. Los Angeles and Seattle do not have unusually higher per-km costs by American standards; in the 2000s Los Angeles looked like the good part of America and in the 2010s Seattle did, but since both have converged to much higher figures. The problem is that a smaller share of the Los Angeles Measures R and M spending goes to useful expansion than the capital budget in places that have project-based planning. This is what needs to be fixed through transitioning to project-based planning, costs aside.