Consultant Slop and Europe’s Decision not to Build High-Speed Rail

I’m sitting on a series of three trains to Rome, totaling 14 hours of travel. If a high-speed rail network is built connecting those cities, the trip can be reduced to about 7.5 hours: 2.5 Berlin-Munich (currently 4), 2 Munich-Verona (currently 5.5), around 2.75 Verona-Rome (currently 3.5), around 0.25 changing time (currently 1). The slowest section is being bypassed with the under-construction Brenner Base Tunnel, but not all of the approaches to the tunnel are, and Germany is happy with its trains averaging slightly slower speeds than the 1960s express Shinkansen.

I bring this up because it’s useful background for a rather stupid report by Transport and Environment that was making the rounds on European social media, purporting to rank the different intercity rail operators of Europe, according to criteria that make it clear nobody involved in the process cares much about infrastructure construction or about what has made high-speed rail work at the member state level. It’s consultant slop, based on a McKinsey report that conflicts with the published literature on intercity rail ridership elasticity, which makes it clear that speed matters greatly. Astonishingly, even negative discourse about the study, by people who I respect, talks about the slop and about the problems of privatization, but not about the need to actually go ahead and build those high-speed connections, without which there are sharp limits to the quality of life available to the zero-carbon lifestyle, limits that make people avoid that lifestyle and instead fly and drive. In effect, Europe and its institutions have made a collective decision over the last 10 or so years not to build high-speed rail, to the point that activism suggesting it reverse course and do so is treated as self-evidently laughable.

The T&E study

The T&E study purports to rank the intercity rail operators of Europe. There are 27 operators so ranked, which do not exactly correspond to the 27 member states, but instead omit some peripheral states, include British and Swiss options, and have some private operators, including inexplicably treating OuiGo as separate from the rest of the TGV. The ranking is of operators rather than infrastructure systems; there is no attention given to planning infrastructure and operations together. Trenitalia comes first, followed by a near-tie between RegioJet and SBB; Eurostar is last. Jon Worth had to pour cold water on the conclusions and the stenography in various European newspapers about them.

In fact, the study fits so perfectly into my post about making up rankings that it is easy to think I wrote the post about T&E – but no, the post is from 2.5 years ago. The issue is that it came up with such bad weighting in judging railways that one is left to wonder if it specifically picked something that would sound truthy and put SBB at or near the top just to avoid raising too many questions. The criteria used are as follows:

  • Ticket prices: 25%
  • Special fares and reductions: 15%
  • Reliability: 15%
  • Booking experience: 15%
  • Compensation policies: 10%
  • Traveler experience (speed and comfort): 10%
  • Night trains and bicycle policy: 5%

None of this is even remotely defensible, and none of this passes any sanity check. No, it is not 1.5 times as important to have special reductions in fares for advance bookings or other forms of price discrimination as to have a combination of speed and comfort. The Shinkansen has fixed fares and is doing fine, thank you very much; SNCF’s own explanations of its airline-style yield management system portray it as a positive but not essential feature – its reports from 2009 recommending high-speed rail development in the United States cite yield management as a 4% increase in revenue, which is good but not amazing.

But more broadly, it is daft to set a full 50% of the weight on fares and fare-related issues (i.e. compensation), and 15% on the booking experience, and relegate speed to part of an issue that is only 10%. That’s not how high-speed rail ridership works. Cascetta-Coppola find a ridership elasticity with respect to trip time of about -2, but only -0.37 with respect to fares. Börjesson finds a much narrower spread, -1.12 and -0.67 respectively, but still the same directionally. Speed matters.

And yet, T&E doesn’t seem to care. The best hints for the reason why are in the way it compares operators rather than national networks, and relies on a McKinsey report pitched at private entrants and not at member state policymakers, who do not normally outsource decisionmaking to international consultants. It doesn’t think in terms of systems or networks, because it isn’t trying to make a pitch at how a member state can improve its rail network, but rather at how a private competitor should aim to make a profit on infrastructure built previously by the state.

The need for state planning

Every intercity rail network worth its name was built and planned publicly, by a state empowered to do so. In East Asia, this comprises the high-speed rail networks of China, Japan, Korean, and Taiwan, all funded publicly, even if Japan subsequently privatized Shinkansen operation (though not construction) to regional monopolies that, while investor-owned, are too prestigious to fail. In Europe, some networks have high-speed rail at their core, like France, and others don’t, like Switzerland or the Netherlands, but the latter instead optimize state planning at lower speed, with tightly timed connections, strategic investments to speed up bottlenecks, and integration between rolling stock, the timetable, and infrastructure.

This feature of the main low-speed European rail network frustrates some attempts at disaggregating the effects of different inputs on ridership and revenue. At the level of a sanity check, there does not appear to be a noticeable malus to French rail ridership from its low frequency at outlying stations. But then France relies on one-seat rides from Paris to rather small cities, which do not have convenient airport access, and in its own way integrates this operating paradigm with rolling stock (bilevels optimized for seating capacity, not fast egress or acceleration) and infrastructure (bypasses around intermediate cities, even Lyon). Switzerland, in contrast, has these timed connections such that the effective frequency even on three-seat rides is hourly, with guaranteed short waits at the transfers, and this provides an alternative way to connect small cities with not just large ones but also each other.

But in both cases, the operating paradigm is connected with the infrastructure, and this was decided publicly by the state, based on governmental financial constraints, imposed in the 1970s in France (leading to extraordinarily low construction costs for the LGV Sud-Est) and the 1980s in Switzerland (leading to the hyper-optimized operations of Bahn 2000 in lieu of a high-speed rail system). A private operator can come in, imitate the same paradigm that the infrastructure was built for, and sometimes achieve lower operating costs by being more aggressive about eliminating redundant positions that a state operator may feel too constrained by unions to. But it cannot innovate in how to run trains. Even in Italy and Spain, where private competition has led to lower fares and higher ridership, all the private competitors have done is force service to look more like the TGV as it is and less like the TGV as SNCF management would like it to be internationally. Even there, they do not innovate, but merely imitate what the TGV already had purely publicly, on infrastructure that was designed for TGV or ICE service intensity all along.

The idea that the private sector can innovate in intercity rail comes from the same imitation of airline thinking that led to the failure of Eurostar, with its high fares and airline-style boarding and queuing. In the airline business, integration between infrastructure and operations is weak, and private airlines can innovate in aircraft utilization, fast boarding, no-frills service, and other aspects that led low-cost carriers to success. Business analysts drawn from that world keep trying to make this work for trains, and fail; the Spinetta Report mentions that OuiGo tanked TGV revenues, and ridership did not materially increase when it was introduced due to inconveniences imposed by the system of segmenting the market by fare.

Europe’s decision not to build high-speed rail

In the 2000s, there was semi-official crayon, such as the TEN-T system, for EU-wide high-speed rail, inspired by the success of the TGV. Little of it happened, and by the 2010s, it became more common to encounter criticism alleging that it could not be done, and it was more important to focus on other things – namely, private competition, the thing that cannot innovate in rail but could in airlines.

At no point was there a formal decision not to build high-speed rail at a European scale. Projects just fell aside, unless they were megaproject tunnels across mountains like the Brenner Base Tunnel or water like the Fehmarn Belt Tunnel, and then there is underinvestment in the approaches, so that the average speed remains shrug-worthy. The discourse shifted from building infrastructure to justifying not building it and pitching on-rail competition instead. This, I believe, is due to factors going back to the 1990s:

  • The failure of Eurostar to produce high ridership. It underperformed expectations; it also underperforms domestic city pairs. SNCF is happy to collect monopoly profits from international travelers, and, in turn, potential travelers associate high-speed rail with high fares and inconvenience and look elsewhere. One failed prominent project can and does poison the technology, potentially indefinitely.
  • The anti-state zeitgeist at the EU level. This can be described as neoliberalism, but the thoroughly neoliberal Blair/Brown and Cameron cabinets happily planned High Speed 2. The EU goes beyond that: it is too scared to act as a state on matters other than trade, and that leads people in EU policy to think in terms of government-by-nudge, rather like the Americans.
  • SNCF and DB’s profiteering off of cross-border travelers in different ways turns them into Public Enemies #1 and #2 for people who travel between different member states by rail, who are then reluctant to see them as successes domestically.

For all of these reasons, it’s preferred at the level of EU policymaking and advocacy not to build infrastructure. Infrastructure requires there to be a public sector, and the EU only does that on matters of trade and regulatory harmonization.

Jon Worth has done a lot of work on getting a passenger rights clause into the agenda for the new EU Parliament, to deal with friction between DB and SNCF when each blames the other when a cross-border passenger is stranded (roughly: DB blames SNCF for running low frequencies so that if DB’s last train is delayed the passenger is stranded, SNCF blames DB for being so delayed in the first place). This is a good kind of regulatory harmonization. It reminds me of the EU’s role in health care: there’s reciprocity among the universal health care systems of Europe, for example allowing EU immigrants but not non-European ones to switch to the Kasse upon arrival; but at the same time, the EU has practically no role in designing or providing these universal health care system or even, as the divergent responses to corona showed in 2020, in coordinating non-pharmaceutical interventions for public health in a pandemic.

But health care does not require large coordinating bodies, and infrastructure does. Refugee camps tended to by UN agencies that have to pay bribes and protection fees to local gangs can have surprisingly good health care outcomes. Cox’s Bazar’s Rohingya camps have infant mortality rates comparable to those of Bangladesh and Burma; Gaza had good if worse-than-Israeli life expectancy and infant mortality until the war started. But nobody can build infrastructure this way. Top-down state action is needed to coordinate, which means actual infrastructure construction, not just passenger rights.

The thinking at the EU level is that greater on-rail competition can improve service quality. But that’s just a form of denial. The EU has no willingness to actually build the high-speed rail segments required to enable rail trips across borders, and so various anti-state actors, most on the center-to-center-right but not all, lie to themselves that it’s okay, that if the EU fails to act as a state then the private sector can step in if allowed to. That’s where the T&E study comes in: it rates operators on how to act like a competitive flight level-zero airline, going with this theory of private-sector innovation to cope with the fact that cross-border rail isn’t being built and try to salvage something out of it.

But it can’t be salvaged, not in this field; the best the private sector can do is provide equivalent service to a good state service on infrastructure that the state built. The alternative to the state is not greater private initiative. In infrastructure, the political alternative is that people who are not Green voters, which group comprises 92.6% of the European Parliament, are going to just drive and fly and associate low-carbon transportation with being contained to within biking distance of city center. The economic alternative is that ties between European cities will remain weak, to the detriment of the European economy and its ability to scale up.

Meme Weeding: Costs and Office Productivity

One of the arguments I’ve seen from time to time excusing high construction costs in English-speaking countries is that their salaries are so high, it drags all other costs up. It’s a rather bad excuse, since there is very little correlation between construction costs and GDP per capita globally: he United States and Singapore are both very rich and very expensive to build metros in, but then Switzerland and the Scandinavian countries are also very rich and fairly cheap to build metros in, and the UK is expensive without being especially rich by European standards. But then I’ve more recently seen people in the US and UK try to specialize their argument to professional services productivity, to take into account that this is a sector where London is very strong and the cities of Germany are not. However, even this doesn’t explain construction cost patterns well. The pattern in which the Anglosphere is uniformly bad has to be understood not as a matter of high wages or productivity, but as a matter of the UK and US developing bad practices for somewhat different reasons and the other English-speaking countries imitating them out of cultural cringe.

The issue here is that while London is a global financial center with high office work productivity and a wealth of professional services, this isn’t true of the rest of the Anglosphere with the exception of the United States. Dublin is not a global financial center; Ireland has high GDP per capita but most of it is profits of corporations owned by foreigners, and local incomes average the same as in Italy. Dublin has a large tech industry for its size – American tech companies have hubs there to justify setting their global headquarters in Ireland to take advantage of a mutual loophole in American and Irish tax laws – but programmers are not usually a substitute for the sort of procurement experts, planners, and overseeing civil servants who are relevant for project delivery, and barely are a substitute for the mechanical and civil engineers who design station standards. Toronto is Canada’s financial center, but Canadian banks are not especially important outside Canada, so in that sense it is substantially less important for professional services than Paris.

What connects all of those Anglosphere cities – and also ones not mentioned above, like Sydney, Melbourne, and Auckland, not to mention Singapore and Hong Kong – is that they all have branch offices of British and American consultancy firms, so they’re more visible in their roles as centers of professional services. But that is not about professional services, but about their ties to British and American global corporate cultures. This is relevant to their high costs, not because the presence of a strong professional services industry raises costs, but because those countries all pick up American and British ideas about the superiority of the international consultancy to the state and then implement a project delivery system that seeks to empower such consultancies. As a usually intended consequence, this system also empowers personalist politicians, who get to micromanage those billion-dollar contracts, and would lack the institutional capacity to manage more normal-size contracts, which they would have to outsource to the permanent civil service rather than to their own political staffers.

In fact, the stereotype that high-cost, low-income-by-first-world-standards countries like Ireland, New Zealand, and Canada are hubs of professional services is itself part of the broader problem. Paris is a giant hub of corporate headquarters and professional services. They are not specialized to finance the way London’s companies are, but the banking profession isn’t more in competition for good managers with the public procurement profession than any other professional service. France is not a particularly industrialized country, unlike Germany or Italy; the good jobs there all involve managing other office workers, as in the US and UK. It’s just a different ecosystem of professional services firms from the British and American one, so it’s worse-known to Americans and Brits.

Similarly, Dublin may be a large tech hub due to its tax haven status, but Zurich has Google’s largest foreign office, at least as of the late 2010s. Zurich is also a rather large banking center for its size. Swiss wages and prices are legendarily high, and Switzerland is almost as deindustrialized as the US or France, but this has not driven Swiss infrastructure construction costs up. To the contrary, Switzerland feels at the top of the world, with little need to privatize its rail services or delivery; not being an EU country, it does not fall under the EU open access mandate, and has not imitated it in its intercity rail planning, because from its perspective, it has the best rail network in Europe by traffic and modal split, so it has little reason to imitate British managerial practices (or, for that matter, French speed; Swiss average rail speeds are low).

So the stereotype that high Anglosphere costs come from high professional services productivity, like the myth that Anglosphere countries other than the US and Singapore are exceptionally rich, is false. It persists because it helps people in the US and UK cope: their high costs, in this schema, are not an inferiority that they should fix, but rather a regrettable but livable side effect of superiority. It’s not the only place where this coping exists; I’ve seen Americans excuse their combination of the highest health care costs in the world and the lowest life expectancy in the developed world sensu stricto by appealing to their high wages, an appeal that’s entirely invisible if one looks at the developed world omitting the US (Nordic life expectancy is high with health costs at the EU average).

In truth, high costs in the English-speaking world are not an aspect of superiority – quite to the contrary. They coexist with some other more positive aspects, in the same way that each country or cluster of countries has its own set of social problems, averaging with positive aspects to a reasonable first-world living standard. But they don’t follow from wealth, democracy, or anything else that Americans and Brits are proud of, whether or not it’s even true. They’re a genuine problem, for which the solution must be to, to an extent, de-Anglicize and de-Americanize and instead pick up the better practices of the rest of the developed world.

Quick Note: Commuter Rail Rolling Stock Costs

ETA just published a report on New York rolling stock costs for commuter rail. In the report, we talk about the need to electrify the entire system, and, if there are unelectrified tails (which there shouldn’t be), the solution for them is not more diesel locomotives. For the purposes of this post, I’d instead like to talk about the difficulties of getting some of this information; the rolling stock database that we have at the Transit Costs Project is growing, but is far from complete, and has gaps, with some information including cost missing for critical orders. What I think from the available data is that alternatives to electrification are far more expensive – the one with the most reliable cost data, battery-electric trains (BEMUs), costs close to 2.5 times as much, while dual-mode diesel-electric multiple units (DEMUs) cost less than BEMUs and more than regular electric multiple units (EMUs). But this is based on imperfect data and I’d like to discuss this issue more.

To the point on EMU costs: something is seriously screwed up with some of the orders. There’s that diva effect for large cities that I’ve talked about for years, in which large cities with old systems prefer to buy custom designs, for example the X’Trapolis in Paris, or the Berlin U- and S-Bahn orders. These are the largest orders, so the average cost Europe-wide is pulled up by these cases. In contrast, standard regional EMU orders are more routine and cheaper; two recent FLIRT orders, for Hanover and Bremen, were respectively $110,000/meter of length and $104,000/meter. But even then, there are variations, and Coradia Stream orders vary by a factor of about 2, for reasons that I don’t quite get.

Then BEMUs are not ordered in a large quantity, but when they are, the costs appear high – the database has a $249,000/m order by ÖBB; there’s an even more expensive order for NAH.SH, both FLIRT Akkus. Another fairly large order, for Pfalznetz, does not have cost data anywhere that I can see; Stadler is putting up a technical sheet for it, but not for ÖBB, but then whenever I look up costs for the Pfalznetz Akku I only get the NAH.SH one and I don’t know why.

There’s a Metra Akku order, whose costs are murky, depending on how one counts them. The procurement order lists the cost as $12.635 million for a two-car BEMU set, which is about $250,000/m, but then the option order includes trailer cars at about $2.5 million apiece. A four-car train so formed would only be around $176,000/m, but would also be severely underpowered. The Stadler technical sheet for the Metra Akku lists its power rating as 1 MWh, which is the wrong unit, but could plausibly be a typo for 1 MW; no weight is listed, but the two-car NAH.SH Akku is 96 t – but then the Metra Akku uses a power pack, which may yield somewhat different results, so the exact numbers are unclear, even if the general result that the Metra Akkus are likely to have a power-to-weight ratio in the vicinity of 6 is close enough, and damning enough. In general, American orders sometimes do that, using multiple-unit trains as locomotives with seats and diluting them with unpowered cars, just because their acquisition costs are so high that they can’t run trains with good performance specs (and, given how conservative the schedules are, they don’t think it’s important anyway).

Low Spanish Costs are not About Decentralization

An article by Ben Hopkinson at Works in Progress is talking about what Madrid has been doing right to build subways at such low costs, and is being widely cited. It sounds correct, attributing the success to four different factors, all contrasted with the high-cost UK. The first of these factors, decentralization in Spain compared with its opposite in England, is unfortunately completely wrong (the other three – fast construction, standardized designs, iterative in-house designs – are largely right, with quibbles). Even more unfortunately, it is this mistake that is being cited the most widely in the discussion that I’m following on social media. The mentality, emanating from the UK but also mirrored elsewhere in Europe and in much of the American discourse, is that decentralization is obviously good, so it must be paired with other good things like low Spanish costs. In truth, the UK shares high costs with more decentralized countries, and Spain shares low ones with more centralized ones. The emphasis on decentralization is a distraction, and people should not share such articles without extensive caveats.

The UK and centralization

The UK is simultaneously expensive to build infrastructure in and atypically centralized. There is extensive devolution in Scotland, Wales, and Northern Ireland, but it’s asymmetric, as 84% of the population lives in England. Attempts to create symmetric devolution to the Regions of England in the Blair era failed, as there is little identity attached to them, unlike Scotland, Wales, or Northern Ireland. Regional identities do exist in England, but are not neatly slotted at that level of the official regions – Cornwall has a rather strong one but is only a county, the North has a strong one but comprises three official regions, and the Home Counties stretch over parts of multiple regions. Much of this is historic – England was atypically centralized even in the High Middle Ages, with its noble magnates holding discontinuous lands; identities that could form the basis of later decentralization as in France and Spain were weaker.

People in the UK understand that their government isn’t working very well, and focus on this centralization as a culprit; they’re aware of the general discourse from the 1960s onward, associating decentralization with transparency and accountability. After the failure of Blair-era devolution, the Cameron cabinet floated the idea of doing devolution but at lower level, to the metropolitan counties, comprising the main provincial cities, like Greater Manchester or the West Midlands (the county surrounding Birmingham, not the larger official region). Such devolution would probably be good, but is not really the relevant reform, not when London, with its extreme construction costs, already has extensive devolved powers.

But in truth, the extreme construction costs of the UK are mirrored in the other English-speaking countries. In such countries, other than the US, even the cost history of similar, rising sharply in the 1990s and 2000s with the adoption of the more privatized, contractor-centric globalized system of procurement. The English story of devolution is of little importance there – Singapore and Hong Kong are city-states, New Zealand is small enough there is little reason to decentralize there, and Canada and Australia are both highly decentralized to the provinces and states respectively. The OECD fiscal decentralization database has the UK as one of the more centralized governments, with, as of 2022, subnational spending accounting for 9.21% of GDP and 19.7% of overall spending, compared with Spain’s 20.7% and 43.6% respectively – but in Australia the numbers are 17.22% and 46.2%, and in Canada they are 27.8% and 66.5%.

American construction costs have a different history from British ones. For one, London built for the same costs as German and Italian cities in the 1960s and 70s, whereas New York was already spending about four times as much per km at the time. But this, too, is an environment of decentralization of spending; the OECD database doesn’t mention local spending, but if what it includes in state spending is also local spending, then that is 19.07% of American GDP and 48.7% of American government spending.

In contrast, low-cost environments vary in centralization considerably. Spain is one of the most decentralized states in Europe, having implemented a more or less symmetric system in response to Catalan demands for autonomy, but Italy is fairly centralized (13.9% of GDP and 24.8% of government spending are subnational), and Greece and Portugal are very centralized and Chile even more so (2.77%/8.1%). The OECD doesn’t include numbers for Turkey and South Korea so we can merely speculate, but South Korea is centralized, and in Istanbul there are separate municipal and state projects, both cheap.

Centralization and decisionmaking

Centralization of spending is not the same thing as centralization of decisionmaking. This is important context for Nordic decentralization, which features high decentralization of the management of welfare spending and related programs, but more centralized decisionmaking on capital city megaprojects. In Stockholm, both Citybanan and Nya Tunnelbanan were decided by the state. Congestion pricing, in London and New York a purely subnational project, involved state decisions in Stockholm and a Riksdag vote; the Alliance victory in 2006 meant that the revenue would be spent on road construction rather than on public transport.

In a sense, the norm in unitary European states like the Nordic ones, or for that matter France, is that the dominant capital has less autonomy than the provinces, because the state can manage its affairs directly; thus, RATP is a state agency, and until 2021 all police in Paris was part of the state (and the municipal police today has fewer than 10% of the total strength of the force). In fact, on matters of big infrastructure projects, the state has to do so, since the budgets are so large they fall within state purview. Hopkinson’s article complaining that Crossrail and Underground extensions are state projects needs to be understood in that context: Grand Paris Express is a state project, debated nationally with the two main pre-Macron political parties both supporting it but having different ideas of what to do with it, not too different from Crossrail; the smaller capitals of the Nordic states have smaller absolute budgets, but those budgets are comparable relative to population or GDP, and there, again, state decisionmaking is as unavoidable as in London and Paris.

The purest example of local decisionmaking in spending is not Spain but the United States. Subway projects in American cities are driven by cities or occasionally state politicians (the latter especially in New York); the federal government isn’t involved, and FTA and FRA grants are competitive and decided by people who do not build but merely regulate and nudge. This does not create flexibility – to the contrary, the separation between builders and regulators means that the regulators are not informed about the biggest issues facing the builders and come up with ideas that make sense in their heads but not on the ground, while the builders are too timid to try to innovate because of the risk that the regulators won’t approve. With this system, the United States has not seen public-sector innovation in a long while, even before it became ideologically popular to run against the government.

In finding high American costs in the disconnect between those who do and those who oversee, at multiple levels – the agencies are run by an overclass of political appointees and directly-reporting staff rather than by engineers, states have a measure of disconnect from agencies, and the FTA and FRA practice government-by-nudge – we cannot endorse any explanation of high British costs that comes from centralization.

If the policy implications of such an explanation are to devolve further powers to London or a Southeast England agency, then they are likely to backfire, by removing the vestiges of expertise of doers from the British state; the budgets involves in London expansion are too high to be handled at subnational level. Moreover, reduction in costs – the article’s promise of a Crossrail 2, 3, and 4 if costs fall – has no chance of reducing the overall budget; the same budget would just be spent on further tunnels, in the same manner the lower French costs lead to a larger Grand Paris Express program. Germany and Italy in the same schema have less state-centric decisionmaking in their subway expansion, for the simple reason that both countries underbuild, which can be seen in the very low costs per rider – a Berlin with the willingness to build infrastructure of London or Paris would have extended U8 to Märkisches Viertel in the 1990s at the latest.

One possible way this can be done better is if it’s understood in England that decentralization only really works in the sense of metropolitanization in secondary cities, where the projects in question are generally below the pay grade of state ministers or high-level civil servants. In the case of England, this would mean devolution to the metropolitan counties, giving them the powers that Margaret Thatcher instead devolved to the municipalities. But that, by itself, is not going to reduce costs; those devolved governments would still need outside expertise, for which public-sector consultants, in the British case TfL, are necessary, using the unitariness of the state to ensure that the incentives of such public-sector consultants are to do good work and push back against bad ideas rather than to just profit off of the management fees.

The first-line effect

The article tries to argue for decentralization so much it ends up defending an American failure, using the following language:

But the American projects that are self-initiated, self-directed, self-funded, self-approved, and in politically competitive jurisdictions do better. For example, Portland, Oregon’s streetcar was very successful at regenerating the Pearl District’s abandoned warehouses while being cutting-edge in reducing costs. Its first section was built for only £39 million per mile (inflation adjusted), half as much as the global average for tram projects.

To be clear, everything in the above paragraph is wrong. The Portland Streetcar was built for $57 million/4 km in 1995-2001, which is $105.5 million/4 km in 2023 dollars, actually somewhat less than the article says. But $26.5 million/km was, in the 1990s, an unimpressive cost – certainly not half as much as the global average for tram projects. The average for tram projects in France and Germany is around 20 million euros/km right now; in 2000, it was lower. So Portland managed to build one very small line for fairly reasonable costs, but they were not cutting edge; this is a common pattern to Western US cities, in that the first line has reasonable costs and then things explode, even while staying self-funded and self-directed. Often this is a result of overall project size – a small pilot project can be overseen in-house, and then when it is perceived to succeed, the followup is too large for the agency’s scale and then things fall apart. Seattle was building the underground U-Link for $457 million/km in 2023 dollars; the West Seattle extension, with almost no tunneling, is budgeted at $6.7-7.1 billion/6.6 km, which would be a top 10 cost for an undeground line, let alone a mostly elevated one. What has changed in 15 years since the beginning of U-Link isn’t federal involvement, but rather the scope of the program, funded by regional referendum.

The truth is that there’s nothing that can be learned from American projects within living memory except what not to do. There’s always an impulse to look for the ones that aren’t so bad and then imitate them, but they are rare and come from a specific set of circumstances – again, first light rail lines used to be like this and then were invariably followed by cost increases. But the same first-line effect also exists in the reasonable-cost world: the three lowest-cost high-speed rail lines in our database built to full standards (double track, 300+ km/h) are all first lines, namely the Ankara-Konya HST ($8.1 million/km in 2023 PPPs), the LGV Sud-Est ($8.9 million/km), and the Madrid-Seville LAV ($15.4 million/km); Turkey, Spain, and France have subsequently built more high-speed lines at reasonable costs, but not replicated the low costs of their first respective lines.

On learning from everyone

I’ve grown weary of the single case study, in this case Madrid. A single case study can lead to overlearning from the peculiarities of one place, where the right thing to do is look at a number of successes and look at what is common to all of them. Spain is atypically decentralized for a European state and so the article overlearns from it, never mind that similarly cheap countries are much more centralized.

The same overall mistake also permeates the rest of the article. The other three lessons – time is money, trade-offs matter and need to be explicitly considered, and a pipeline of projects enables investment in state capacity, are not bad; much of what is said in them, for example the lack of NIMBY veto power, is also seen in other low-cost environments, and is variable in medium-cost ones like France and Germany. However, the details leave much to be desired.

In particular, one the tradeoffs mentioned is that of standardization of systems, which is then conflated with modernization of systems. The lack of CBTC in Madrid is cited as one way it kept construction costs down, unlike extravagant London; the standardized station designs are said to contrast with more opulent American and British ones. In fact, neither of these stories is correct. Manuel Melis Maynar spoke of Madrid’s lack of automation as one way to keep systems standard, but that was in 2003, and more recently, Madrid has begun automating Line 6, its busiest; for that matter, Northern Europe’s lowest-construction cost city, Nuremberg, has automated trains as well. And standardized stations are not at all spartan; the lack of standardization driving up costs is not about nice architecture, which can be retrofitted rather cheaply like the sculptures and murals that the article mentions positively, but behind-the-scenes designs for individual system components, placement of escalators and elevators, and so on.

The frustrating thing about the article, then, is that it is doing two things, each of which is suspect, the combination of which is just plain bad. The first is that it tries to overlearn from a single famous case. The second is that it isn’t deeply aware of this case; reading the article, I was stricken by how nearly everything it said about Madrid I already knew, whereas quite a lot of what it said about the UK I did not, as if the author was cribbing off the same few reports that everyone in this community has already read and then added original research not about the case study but about Britain.

And then the discourse, unfortunately, is not about the things in the article that are right – the introduction in lessons 2-4 into how the civil service in Madrid drives projects forward – but about the addition of the point about centralization, which is not right. Going forward, reformers in the UK need far better knowledge of how the low- and medium-construction cost world looks, both deeper and broader than is on display here.

Commuter Rail to Staten Island

A debate in my Discord channel about trains between Manhattan and Staten Island clarified to me why it’s so important that, in the event there is ever rail service there, it should use large commuter trains rather than smaller subway stations. The tradeoff is always that the longer trains used on commuter services lead to higher station construction costs than the smaller trains used on captive subway lines. However, the more difficult the tunnel construction is, and the fewer stations there are, the smaller the cost of bigger trains is. This argues in favor of commuter trains across the New York Harbor, and generally on other difficult water or mountain crossings.

When costing how much expansive commuter rail crayon is, like my Assume Normal Costs map, I have not had a hard time figuring out the station costs. The reason is that the station costs on commuter rail, done right, are fairly close to subway station costs, done wrong. As we find in the New York construction cost report, Second Avenue Subway’s 72nd and 86th Street stations were built about twice as large as necessary, and with deep-mined caverns. If you’re building a subway with 180 m long trains under Second Avenue, then mining 300-400 m long stations is an extravagance. If you’re building a regional rail tunnel under city center, and the surface stations are largely capable of 300 m long trains or can be so upgraded, then it’s normal. Thus, a cost figure of about $700 million per station is not a bad first-order estimate in city center, or even $1 billion in the CBD; outside the center, even large tunneled stations should cost less.

The cost above can be produced, for example, by setting the Union Square and Fulton Street stations at a bit less than $1 billion each (let’s say, $1.5 billion each, with each colored line contributing half), and a deep station under St. George at $500 million, totaling $2 billion. The 15 km of tunnel are then doable for $3 billion at costs not far below current New York tunneling costs. Don’t get me wrong, it still requires cost control policies on procurement and systems, but relative to what this includes, it’s not outlandish.

This, in turn, also helps explain the concept of regional rail tunnels. These are, in our database, consistently more expensive than metros in the same city; compare for example RER with Métro construction costs, or London Underground extensions with Crossrail, or especially the Munich U- and S-Bahn. The reason is that the concept of regional rail tunneling is to only build the hard parts, under city center, and then use existing surface lines farther out. For the same reason, the stations can be made big – there are fewer of them, for example six on the original Munich S-Bahn and three on the second trunk line under construction whereas the Munich U-Bahn lines have between 13 and 27, which means that the cost of bigger stations is reduced compared with the benefit of higher capacity.

This mode is then appropriate whenever there is good reason to build a critical line with relatively few stations. This can be because it’s a short connection between terminals, the usual case of most RER and S-Bahn lines; in the United States, the Center City Commuter Connection is such an example, and so is the North-South Rail Link if it is built. This can also be because it’s an express line parallel to slower lines, like the RER A. But it can also be because it doesn’t need as many stations because it crosses water, like any route serving Staten Island.

The flip side is that whenever many stations are required on an urban rail tunnel, it becomes more important to keep costs down by, potentially, shrinking the station footprint through using shorter trains. In small enough cities, as is the case in some of the Italian examples discussed in that case, like Brescia and Turin, it’s even possible to build very short station platforms and compensate by running driverless trains very frequently, producing an intermediate-capacity system. In larger cities, this trick is less viable, but sometimes there are corridors where there is no alternative to a frequent-stop urban tunnel, such as Utica in New York, and then, regional rail loses value. But in the case of Staten Island, to the contrary, commuter rail is the most valuable option.

Quick Note: Kathy Hochul and Eric Adams Want New York to Be Worse at Building Infrastructure

Progressive design-build just passed. This project delivery system brings New York in full into the globalized system of procurement, which has led to extreme cost increases in the United Kingdom, Canada, and other English-speaking countries, making them unable to build any urban transit megaprojects. Previously, New York had most of the misfeatures of this system, largely through convergent evolution, but due to slowness in adapting outside ideas, the state took until now, with extensive push from Adams’ orbit, for which Adams is now taking credit, to align. Any progress in cost control through controlling project scope will now be wasted on the procurement problems caused by this delivery method.

What is progressive design-build?

Progressive design-build is a variant on design-build. There is some divergence between New York terminology and rest-of-world terminology; for people who know the latter, progressive design-build is approximately what the rest of the world calls design-build.

To give more detail, designing and constructing a piece of infrastructure, say a single subway station, are two different tasks. In the traditional system of procurement, the public client contracts the design with one firm, and then bids it out to a different firm for construction; this is called design-bid-build. All low-construction cost subway systems that we are aware of use a variant of design-bid-build, but two key features are required to make it work: sufficient in-house supervision capacity since the agency needs to oversee both the design and the build contracts, and flexibility to permit the build contractors to make small changes to the design based on spot prices of materials and labor or meter-scale geological discoveries. The exact details of both in-house capacity and flexibility differ by country; for example, Turkey codifies the latter by having the design contract only cover 60% design, and bundling going from 60% to 100% design with the build contract. Despite the success of the system in low-construction cost environments, it is unpopular among the global, especially English-speaking, firms, because it is essentially client-centric, relying on high competence levels in the public sector to work.

To deal with the facts that large global firms think they are better than the public sector, and that the English-speaking world prefers its public sector to be drowned in a bathtub, there are alternative, contractor-centric systems of project delivery. The standard one in the globalized system is called design-build or design-and-build, and simply means that the same contractor does both. This means less public-facing friction between designers and builders, and more friction that’s hidden from public view. Less in-house capacity is required, and the contracts grow larger, an independent feature of the globalized system. As the Swedish case explains in the section on the traditional and globalized systems, globalized Swedish contracts go up to $300-500 million per contract (and Swedish costs, once extremely low, are these days only medium-low); in New York, contracts for Second Avenue Subway Phase 2 are already in the $1-2 billion range.

In New York, the system is somewhat complicated by the text of legacy rules on competitive bidding, which outright forbid a company from portraying itself as doing both design and construction. It took recent changes to legalize the Turkish system of bundling the two contracts differently; this changed system is what is called design-build in New York and is used for Second Avenue Subway Phase 2, even though there are still separate design and construction contracts, and is even called design-build in Turkey.

Unfortunately, New York did not stop at this, let’s call it, des-bid-ign-build system. Adams and Hochul want to be sure to wreck state capacity. Thus, they’ve pushed for progressive design-build, which is close to what the rest of the world calls design-build. More precisely, the design contractor makes a build bid at the end of the design phase, and is presumed to become the build contractor, but if the price is too high, there’s an escape clause and then it becomes essentially design-bid-build.

The globalized system that led to a cost explosion in the UK and Canada in the 1990s and 2000s from reasonable to strong candidates for second worst in the world (after the US) is now coming to New York, which already has a head start in high construction costs due to other problems. It’s a win-win for political appointees and cronies, and they clearly matter more than the people of the city and state of New York.

We Have Northeast Corridor Runtimes

After finally looking at the options, we have a main low-investment proposal; the writeup will appear soon (optimistically this month, pessimistically next month). Here is the timetable for the fastest intercity trains:

Boston 0:00
Providence 0:23
New Haven 1:04
Stamford 1:30
New York 1:56 (arrival)
New York 1:59 (departure)
Newark 2:07
Philadelphia 2:46
Wilmington 3:00
Baltimore 3:32
Washington 3:55

This timetable incorporates schedule padding, of 4% on the Providence-New Haven section (dedicated to high-speed trains except at the north end with marginal commuter traffic) and 7% on the others. All station stops except New York take 1 minute, and the times above except that for Boston denote arrival time, not departure time.

This includes some nonnegotiable investments into reliability and capacity, such as switch upgrades within footprint at the major stations to raise speeds from 10 miles an hour to around 50 km/h and grade separations of some rail junctions near New York and Philadelphia; this post describes the main ones and is largely still valid. As far as big deviations from the existing Northeast Corridor right-of-way go, there’s only one: the bypass between Kingston and New Haven, saving around 27 minutes of trip time. None of the New Haven Line bypasses and curve easements on the webtool map has made it, except at Cos Cob Bridge, which should be turned from two short, sharp curves into one wider curve as it is replaced.

The menu of options of what to do with the corridor further, with speed impacts, is as follows:

  • If the other long non-shared sections are timetabled with 4% and not 7% padding – New Haven-Stamford and New Brunswick-Perryville – then this saves, respectively, 43 and 93 seconds. But I am uncomfortable with this little timetable padding when these sections are directly adjacent to complex commuter rail track-sharing arrangements around New York and in Maryland.
  • Restoring the Back Bay stop costs 107 seconds. Restoring the Route 128 stop costs 187 seconds. These and all subsequent figures include padding.
  • There are a bunch of 1,746 m radius curves between the Canton Viaduct (which is very difficult to move) and Mansfield, all short and without difficult terrain or property on their inside; easing all of them to allow 320 km/h cruise speed saves 63 seconds.
  • A New London stop for local intercity trains, in the middle of high-speed territory, costs 3:58; this should be padded to 5 minutes to space trains correctly to Boston, under a service pattern where out of every three trains going up to New Haven every 30 minutes, one runs express to Boston, one runs local, and one goes up to Hartford and Springfield.
  • A rather destructive Milford curve easement saves 22 seconds (with 7% pad, not 4%), at the cost of four entire condo buildings near the station, 20 single-family houses, and most of Green Apartments; we do not recommend this even in a high-investment scenario due to the small time saving.
  • A curve easement in Stratford taking some back space near the Walmart would by itself save 8 seconds, but the saving grows if adjacent curve fixes are conducted, for example, if the Milford curve easement is included, the saving is not 8 but 14 seconds, with intercity trains going at 240 km/h.
  • A bypass complex for the curves of Bridgeport and Fairfield, including a tunnel under the Pequonnock, saves 2:54. The same bypass raises the time saving of the above Stratford curve by another 11 seconds, so combined they are 3:13, and the Milford easement would cut another 28 seconds.
  • Trains can skip Stamford, saving 2:15.
  • A destructive bypass of Darien would save 2:14, with trains running at 250 km/h, with around 300 properties taken, about as many as on the eight times as long Kingston-New Haven bypass. This figure assumes that trains continue to stop at Stamford. If the bypass is combined with skipping Stamford on express trains, then then are an extra 11 seconds saved.
  • A bypass of Greenwich and Port Chester’s tight curves saves 63 seconds, and also changes the way intercity trains have to be timetabled with express commuter trains; whereas the default option without this bypass requires express trains to run as today and local trains to make all stops, the bypass forces express trains to stop at a rebuilt Greenwich station to be overtaken by intercity trains that use the bypass.
  • A series of curve easements at Metuchen, not included in the plan, saves around 6 seconds and is not included.
  • Trains could stop at Trenton, at the cost of 3:52 minutes. This could potentially be padded to 5 minutes to space trains south of Philadelphia correctly, if a train in three diverts at Philadelphia to the Keystone corridor.
  • Trains could bypass Wilmington. On the current alignment, it only saves 1:44 due to sharp curves at both ends of the station, but if a bypass alignment near I-95 and the freight bypass is built, then trains would save about 3:20 compared with stopping trains.
  • A bypass of BWI or realignment, including moving the station and the access road and parking garage, would save 15 seconds.

Our Rolling Stock Database Draft is Out

Here is a link.

As mentioned in the writeup, this database is still incomplete, in systemic ways that matter to the analysis. In particular, European metros show a diva effect in which Paris and Berlin have higher costs than the rest, and the database has more trainsets from them and fewer from cities where costs are lower, like Madrid, due to data availability. (For the same reason, I would not trust the database on European tramways until we add more items.)

Kathy Hochul Can Only Solve Problems She Created

After the election, with the congestion pricing lawsuit hearings looming, Kathy Hochul announced that she’s going to restore congestion pricing, at the lower rate of $9 per entry, as opposed to the $15 per entry in the original program that she’d unilaterally canceled in June weeks before it was supposed to begin implementation.

The main reaction by transit advocacy groups in the region seems to be “We did it”: the combination of political pressure (reducing the governor’s approval rate), bottom-up pressure like mass phone calls, and lawfare led her to go back and restore 60% of congestion pricing. Perhaps, after the lawsuit is resolved, she will stop violating 40% of the law and go back to following it entirely.

But then there are people who insist that this was some savvy political move to delay congestion pricing until after the election, to save some congressional Democrats. This is stupid. The Democrats did okay in the congressional elections in the region, but their performance in the presidential election, in which Donald Trump tried to make congestion pricing an issue, was beyond awful, with the single largest Republican swing in the country from 2020, followed by adjacent New Jersey and frequent destination for out-migrants Florida. No: people rejected Hochul’s capricious government as much as they could given other partisan and ideological views.

Because what we’re seeing is that Hochul is perfectly capable of solving a problem – well, 60% of a problem – provided she is the sole cause of it. Otherwise, she can’t do anything. The state has a stack of problems, and she and the political appointees, including both her own and those carried over from Cuomo, can’t do anything to solve them, and I don’t even think they have any interest in. They lower people’s expectations so that they can claim credit for meeting 60% of them. No wonder people think so little of New York governance.

Help Us Write More Construction Cost Cases

At the Transit Costs Project, we’re planning to return to writing more infrastructure construction costs cases, and we need help to improve our coverage to new places – potentially, your help. See job ad here.

How many positions are you hiring for?

This number depends on the applications we get, but there will be multiple hires.

What kind of cases are you interested in?

Cases studying construction costs for urban rail in a specific city or group of cities; so far we’ve done rapid transit projects (commuter rail counts), but we will look at proposals that look at adjacent issues, for example mass expansion of light rail if it is at sufficient scale to qualify as a megaproject. We’re not going to be interested in highway-only or highway-focused studies, but a public transport-focused report could still talk about a contemporary highway megaproject in the same place to give more context – for example, at the same time that it built more than 100 km of new metro in a decade, Madrid also built motorway tunnels, and this may be relevant to understanding its decisionmaking, engineering practices, and contracting practices.

As we say in the job ad, you should be familiar with our existing cases, which can be read here. This doesn’t mean you need to memorize them (I have not memorized the one I wrote myself, let alone the others). But they should give some guidance about what issues we’re interested in seeing in each case: a sketch of the history of urban rail in the city, an explanation of the decisionmaking that led to the project, a description of the ongoing discourse about it informed by local opinions on how things should be done, engineering drawings, and similar issues leading to a synthesis of what works and what doesn’t.

Do the cases need to agree with the program focusing on decisionmaking, project delivery, and so on?

They need to be on-topic but absolutely do not need to agree with us. I’m fairly hardline against certain procurement elements that we call the globalized system in the cases, such as large contracts and design-build delivery, but also if you think I’m wrong and set out to find a case showing that design-build has actually worked and improved things, that’s entirely on-topic. Marco Chitti came to my attention after he vociferously disagreed with me on Twitter about private competition in intercity rail in Italy.

Which places are you interested in seeing reports for?

We’d like to have a wide variety of examples. So far we’ve done two American cases (Boston and New York), plus Italy, Stockholm, and Istanbul. Potentially, any example of urban rail megaproject elsewhere qualifies; that said, all other things being equal, we would prefer environments that are different from all of those, such as medium-cost places (like France or Germany), Asian examples of any kind, Latin American examples (cheap like Santo Domingo or Santiago, or more expensive like Brazilian cities), the United Kingdom with its relatively recent cost explosion, and so on.

This also, frustratingly to applicants, means that we’re going to hire based on who else we’re going to hire. What this means is that if we decide to hire three people, and then we narrow the shortlist to five good applicants with good proposals for a Paris case and then two more with good proposals for Tokyo and Santo Domingo cases, we’re not going to do two Paris cases.

What connections do I need for the interviews?

Any. You don’t need to have a list of 20 names of people to talk to in advance, but we would like to see evidence that you can get to this many interviews. This can come from connections with local advocates, politicians, civil servants, academics, contractors, union organizers, journalists, agency heads, engineers, or policy experts. Interviewees often naturally suggest other people to interview or documents to read, whose authors are then natural interview subjects; this in our experience has included both disgruntled planners eager to publicize the failures of the projects they’ve been involved in and planners who think their superiors are doing good work and would like to publicize their agencies’ successes.

I think I have enough knowledge and connections in multiple countries and can do two cases. What do I do?

Talk to us; it’s likely we’ll only be able to make you an offer for a single case, but you never know.

(Update) Where is the job?

We work fully remotely. I met Elif in person two years into the Transit Costs Project and Marco even later.