News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.
- Willie Brown (former SF mayor)
I think the inability of politicians to have a real conversation about costs is a big part of high construction costs. Without this sort of difficult conversation it's hard to plan and try to mitigate things that might cause ballooning costs because you need to pretend that don't exist in the first case.
While I agree that the attitude shown in the quote is undesirable, I think it's more a symptom of the problem, not the underlying problem itself. He's essentially right. Infrastructure projects are constantly shot down because of cost concerns, yet we have crumbling infrastructure that needs to be replaced. If estimates became higher, approvals would decrease.
One other piece I haven't seen mentioned yet: large construction projects that take years to complete are incredibly hard to estimate accurately, because unpredictable economic swings can cause the cost of items to vary quite a bit between when the estimate was produced, and when the work was actually being performed and purchased.
This was one of the reasons why the Big Dig's estimates were so far off. Although there are a dozen other factors with that particular case as well.
Thats purely corruption. I always explain to my argentinian friends, used to the petty corruption of putting friends and family in public positions, that the us does corruption at a much bigger scale: at the legal one.
The transbay terminal is one of the biggest rip-offs ever. It cost the revenue of sales taxes of the city for years. And it doesn't even work, while the "transient" station that must have cost almost nothing works perfectly fine.
besides the inherent difficulty of estimating the resources required to finish a large project that hasn't been done before...
i think what willie brown describes here is also part of the problem providing estimates for the time required to complete software projects: if we gave more honest answers as devs, bosses and people signing contracts would blanche, so instead of standing firm, we go lower, or cut corners, or both.
i think the two things compounded together (inherent difficulty of estimating large unique projects, aversion to seeing real costs) are why estimates so often skew too low when we're trying to predict how long it will take to write a thing.
The politicians can’t have a real conversation about costs because the legal and political complexity of our society has reached such high levels that it is impossible to accurately project costs multiple years into the future.
> In Paris, as well as Athens, Madrid, Mexico City, Caracas, Santiago, Copenhagen, Budapest, and I imagine other cities for which I can’t find this information, metro stations are built cut-and-cover... There is extensive street disruption, for about 18 months in the case of Paris, but the merchants and residents get a subway station at the end of the works.
The cost of using a more expensive method ($750M per station vs $110) of building in order to prevent disruption to car traffic is almost always attributed to the cost of public transportation. But it seems to me like it at least partially should be considered a cost of maintaining car infrastructure.
Regarding point 9 about the inability to look outside North America. I always wondered why it seems transit agencies haven't looked to bring in teams of people who have managed/built successful projects in Europe, Asia, or even closer like Mexico City.
California HSR for example went to solicit bids from foreign operators and selected Deutsche Bahn/German Railways. But AFAIK the initial design work/RFP/proposals were done by California and domestic engineers, who obviously wouldn't have much, if any, experience in designing or managing HSR construction.
Would an experienced team be able to overcome a very different regulatory and political environment to make a difference in cost and time?
Replying to myself to add- I wonder if it extends down to the construction itself (not that a project would hire the workers abroad, but maybe mixing up supervisors/foreman/leads or sending them for training).
Orders of magnitude smaller in scale but in my observations, even things like urban sidewalk, sewer and road construction seem to be conducted entirely differently in Germany, for example, vs North America.
Is the difference in construction specs? Formal vocational education of trades and apprenticeships vs the US? I don't know, but the final products seem to be much higher quality than public projects in the US and I doubt they're spending multiples more.
I think you’re confused about what these projects really are. They are not construction projects they are job creation programs. Both the unions and politicians use them as such to bolster their own interests.
Ok, this is worth reading for the section on “Incuriosity” alone. It’s worth quoting in its entirety but too long to paste here, so I’ll just say if you do nothing else, click through to the article and read that section.
Agreed, though I was surprised it didn't point to a cause, which I might identify as American Exceptionalism. No need to be curious about how other countries do things when you're operating under a mythology that your country is the best.
That part stood out to me, too. It's a phenomenon I've been noticing for a long time when talking to Americans (even here on HN), but I think this is the first time I've seen an American recognize it.
One of my first jobs in IT was for a big general contractor.
We built schools, hotels, restaurants, you name it.
Whenever we had a government project, like a building for the county, a jail, new secretary of state/dmv office...we went way over budget and way over schedule. EVERY. SINGLE. TIME.
We'd have a 'groundbreaking ceremony' and then not be able to actually dig at the site for 12 more days because permits got tripped up. How can the government not approve their own permits on time?
"the government" is more a loose confederation of public agencies. They're not a monolith that has the ability to know everything about everything, especially at the local and county levels. I don't know the specifics of that case, but last minute citizen protests or protests that weren't able to be resolved quickly enough are another issue.
It's also not like this doesn't happen in the private sector. A company bough some land on the main road where I am, razed the building, graded, and then stopped for almost 2 years now because the board won't change the zoning for them. (Which is the right decision imho.)
>How can the government not approve their own permits on time?
I'd wager that "internal customers" aren't buying donuts to accompany their permits and doing all the other borderline corruption type things you need to do in order to get government do work with you in a timely manner.
Edit: Having the person at the desk remember your company as "the one that brings donuts" and the mid-level manager remembering your company as "the one that sponsored my son's little league team" don't has the potential to make a massive difference. For a company that does a lot of business with government spending a few grand a year making sure the people of government see you in a positive light is well worth it.
NYC MTA is a great example of why. We need to put blame on all parties involved politicians, corporations and labor unions. Anyone who unconditionally defends labor is naive at best. NYT reports:
“Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show.”
The South Ferry repairs after Sandy was a great example. Pump it out, replace some escalators, redo the walls, put strengthened flood defenses for next time - 1/3 of a Billion dollars? WTF.
Those who blame it squarely on unions, explain how Europe has strong unions and yet construction there is orders of magnitude cheaper than in the US?
It's because there isn't a proper bidding process. Politicians just give sweetheart bloated contracts to the same contractors every time, and those contractors then "donate to their campaign". If they instead used things like sealed bids and had contractors compete against eachother, it wouldn't cost $1B per mile for NYC's 2nd avenue subway, absurd.
In Germany, labour unions are strong, but things like union security agreements are unheard of (and I was amazed something like that would exist when I first heard of it). The stories you read about corruption in US labour unions (admittedly subject to selection bias) are unheard of over here.
There are strong laws and customs around arbitration processes, and a culture of unions considering survival and success of the business above pushing through maximal demands. E.g. in a prolonged strike, if employers and union are unable to resolve the conflict, after some time arbitration by a generally respected elder statesman kicks in. They hear both sides, and then make a binding decision, which usually is generally accepted. It all seems a bit more balanced.
I'm not sure how much that transfers to other European countries. France famously has a different culture around strikes and unions, but doesn't seem to be representative (https://www.etui.org/Services/Strikes-Map-of-Europe).
Unions do what unions can. It's amazing that NYC MTA uses unionized labor for things that could be easily outsourced/contracted.
This strange example of market failure points to us having insufficient information to understand the real transactions. MTA must get something else too from the unions to abide by their rules. (Allegedly it's Cuomo himself who benefits, thus he pressures the MTA.)
The point about the size of the stations is very obvious in Chicago. Most of the stations were built 100 years ago, and are roughly the same size. A handful of stations have been rebuilt--at great cost. At some of the older stations, you can't barely walk 2 people side by side on the platform without feeling like you're about to fall on to the tracks. The new stations by comparison are 4 times as wide and have gigantic entrances.
The interesting question is, do we need the huge stations? If that's a the difference between a $80mil project and a $400mil project, could we build the smaller ones?
Funny that the article doesn't once mention unions as a factor that drives up cost. It's almost as if attacks on unions for making public works slow and expensive are disingenuous.
It'll be useful if the title could clarify that this is about metro/subway construction costs in large cities, rather than all construction costs in America.
The part about mezzanines struck me. BART has huge barren mezzanines. There is not one shop in the entire station. The other subways I've visited in the US (Boston, DC, NYC) also don't have any shops except in some of the largest like Grand Central or Penn station.
Compare this with subways and train stations in Japan which often have shops in the mezzanines and sometimes at the platform. There are always at least vending machines at the platform. I don't think this is unique to Japan, I recall there being shops in the station in Korea, Taiwan, and London too.
Why do the stations in our supposed capitalistic society not have any shops?
I think part of it has to do with how the lines are financed and built. In Japan and Korea for example, individual companies own the lines and stations and basically use them to funnel customers to shopping areas where they actually make their money.
In the U.S. they are built as public works projects and owned in the end by some local municipal authority. Since they are public property, there's no incentive/ability to conduct commerce there. It would be like having a McDonalds inside of a library.
> The part about mezzanines struck me. BART has huge barren mezzanines. There is not one shop in the entire station.
I found that odd about BART, too - initially I thought this was due to crime (BART seems pretty sketchy, and opening up a shop there would be an invitation to robbers and thieves), but then I realized "safer" metros don't have them either.
That’s a good question. I wonder if it comes down to traffic volumes. I think US transit systems carry a lot fewer people compared to international ones, but I don’t know how they compare on a station by station basis. Is there enough traffic to “feed” retail on the mezzanine?
At some subway stations in Shanghai (notably People's Square and Xujiahui) there's more space devoted to shops than to the subway proper. (Those are outside the area you have to pay to enter. Inside, there are also shops, but not very many.)
I actually have a reasonably large amount of knowledge on this topic. I took a break after the dot com bubble burst through structural / construction engineering[0] before returning and my brother has been and continues to be in charge of some mega projects for EllisDon.
It is certainly worse in America, but it's not great in Canada either. The issue is this: There is no incentive alignment at multiple levels of these projects.
For example, I've worked with a couple great unions[1] but overall unions slow things down. There have been times where I've been reprimanded for lending a utility knife to open a pallet to a unionized worker.
It's too adversarial here and it really does slow things down. I've seen countless work-arounds to the rules just so employers can pay people that work harder more. For example, only valued employees are offered snow plowing work in the winter when construction is slow, but these tactics don't scale.
Then, on the other side, we do not pay our public servants enough and nor do we have high enough standards for their work. There are good public servants, to be true, but that's essentially random chance. It isn't because we've intentionally created a culture of achievement or excellence in our public works departments.
In both cases firing someone is too difficult. I'm not saying it should be easy, but I've known people that show up for work at 10:30am and leave, no joke, at 2:00pm. It's completely ridiculous.
Then there is the issue of building for the first time versus expanding or maintaining. First time construction is much easier. Standards are lower, there is less stuff in the way, everyone in the city is excited for the new thing so people make sacrifices. A new subway or sports stadium brings in business to the surrounding area, so part of the cost can be pushed on to local property owners in the area. Thirty years later when the soffit is cracked because subsurface water wasn't as expected there is none of that stuff. Just some angry commuters and shop owners wondering why it is taking so long.
I'm starting to think that capital projects, especially subterranean ones, are inherently worse than smaller alternatives. They're so expensive to maintain and once they're in there is no going back. I'd rather have lots of bike lanes or streetcars than subways. We could build a lot of bike lanes for the same cost of a subway, and even have them covered so snow and rain wouldn't be annoyances.
[0] I worked on lots of stuff for the TTC, including subway stations, and some stuff for the City of Toronto.
[1] Electrical worker union IBEW Local 353 was especially great because they pushed their employees to work hard. In exchange, they were able to negotiate default conditions like nine-hour, four-day work weeks. It fostered a sense of pride in their trade and work.
Americans not wanting to learn from other countries is just so puzzling to me. If I ever get an answer to why it's often "the US is much bigger than Sweden, it wouldn't work here" to which I reply "then why don't your states look at the European countries? Germany and France have way more people than any US state" to which I get some defeatist drivel about that too.
Meanwhile in Brazil, China and India curiosity reigns.
Interesting about the stations. My Ontario city is close to starting an LRT system and the station costs for just those seem kind of high.
We recently added a new station for the GO regional railway transit system that currently has two trains a day and I think it was something like $50 million Canadian. I can understand needing an elevator for disability, but it could have started as something simple besides that.
“That said, having spent the last nine years looking at topline costs and a few itemized breakdowns does let me reach some initial conclusions, ones that I believe are robust to new data.“
The Big Dig in Boston was originally estimated to cost $8 billion. People were upset about this.
There were multiple problems along the way.
It ultimately ended up costing $22 billion. People were also upset about this.
At the end of the day? It was an awesome project. They completely buried a highway that cut through the city, and added a ton of green space downtown (The Greenway).
The city is better for it. Taxpayers would never have allowed it if they had their way.
We need a similar program to revitalize the MBTA. It should be done regardless of the cost. I will happily pay more real estate taxes and highway tolls for the rest of my life to support it.
[+] [-] jonawesomegreen|7 years ago|reply
I think the inability of politicians to have a real conversation about costs is a big part of high construction costs. Without this sort of difficult conversation it's hard to plan and try to mitigate things that might cause ballooning costs because you need to pretend that don't exist in the first case.
[+] [-] nck4222|7 years ago|reply
One other piece I haven't seen mentioned yet: large construction projects that take years to complete are incredibly hard to estimate accurately, because unpredictable economic swings can cause the cost of items to vary quite a bit between when the estimate was produced, and when the work was actually being performed and purchased.
This was one of the reasons why the Big Dig's estimates were so far off. Although there are a dozen other factors with that particular case as well.
[+] [-] conanbatt|7 years ago|reply
The transbay terminal is one of the biggest rip-offs ever. It cost the revenue of sales taxes of the city for years. And it doesn't even work, while the "transient" station that must have cost almost nothing works perfectly fine.
[+] [-] wrs|7 years ago|reply
[+] [-] arthur_pryor|7 years ago|reply
i think what willie brown describes here is also part of the problem providing estimates for the time required to complete software projects: if we gave more honest answers as devs, bosses and people signing contracts would blanche, so instead of standing firm, we go lower, or cut corners, or both.
i think the two things compounded together (inherent difficulty of estimating large unique projects, aversion to seeing real costs) are why estimates so often skew too low when we're trying to predict how long it will take to write a thing.
[+] [-] enraged_camel|7 years ago|reply
[+] [-] imgabe|7 years ago|reply
Robert Moses is quoted as saying the same thing. Once you start, there is no choice for the public but to push on and finish.
[+] [-] alwaysdoit|7 years ago|reply
The cost of using a more expensive method ($750M per station vs $110) of building in order to prevent disruption to car traffic is almost always attributed to the cost of public transportation. But it seems to me like it at least partially should be considered a cost of maintaining car infrastructure.
[+] [-] vinay427|7 years ago|reply
[+] [-] harperlee|7 years ago|reply
[+] [-] dashundchen|7 years ago|reply
California HSR for example went to solicit bids from foreign operators and selected Deutsche Bahn/German Railways. But AFAIK the initial design work/RFP/proposals were done by California and domestic engineers, who obviously wouldn't have much, if any, experience in designing or managing HSR construction.
Would an experienced team be able to overcome a very different regulatory and political environment to make a difference in cost and time?
[+] [-] zaphod12|7 years ago|reply
[+] [-] dashundchen|7 years ago|reply
Orders of magnitude smaller in scale but in my observations, even things like urban sidewalk, sewer and road construction seem to be conducted entirely differently in Germany, for example, vs North America.
Is the difference in construction specs? Formal vocational education of trades and apprenticeships vs the US? I don't know, but the final products seem to be much higher quality than public projects in the US and I doubt they're spending multiples more.
[+] [-] wil421|7 years ago|reply
[+] [-] wwweston|7 years ago|reply
[+] [-] burlesona|7 years ago|reply
[+] [-] meej|7 years ago|reply
[+] [-] Camillo|7 years ago|reply
[+] [-] bluedino|7 years ago|reply
We built schools, hotels, restaurants, you name it.
Whenever we had a government project, like a building for the county, a jail, new secretary of state/dmv office...we went way over budget and way over schedule. EVERY. SINGLE. TIME.
We'd have a 'groundbreaking ceremony' and then not be able to actually dig at the site for 12 more days because permits got tripped up. How can the government not approve their own permits on time?
[+] [-] jimktrains2|7 years ago|reply
It's also not like this doesn't happen in the private sector. A company bough some land on the main road where I am, razed the building, graded, and then stopped for almost 2 years now because the board won't change the zoning for them. (Which is the right decision imho.)
[+] [-] matt4077|7 years ago|reply
I'd consider a positive to see that the government does not get to take shortcuts, but has to abide by the same rules as everyone else.
[+] [-] dsfyu404ed|7 years ago|reply
I'd wager that "internal customers" aren't buying donuts to accompany their permits and doing all the other borderline corruption type things you need to do in order to get government do work with you in a timely manner.
Edit: Having the person at the desk remember your company as "the one that brings donuts" and the mid-level manager remembering your company as "the one that sponsored my son's little league team" don't has the potential to make a massive difference. For a company that does a lot of business with government spending a few grand a year making sure the people of government see you in a positive light is well worth it.
[+] [-] objektif|7 years ago|reply
“Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show.”
Source: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...
[+] [-] rb808|7 years ago|reply
http://gothamist.com/2017/06/28/new_south_ferry_subway_stati...
[+] [-] ghobs91|7 years ago|reply
It's because there isn't a proper bidding process. Politicians just give sweetheart bloated contracts to the same contractors every time, and those contractors then "donate to their campaign". If they instead used things like sealed bids and had contractors compete against eachother, it wouldn't cost $1B per mile for NYC's 2nd avenue subway, absurd.
NY Governor Cuomo surprisingly called this out recently, describing it as a "transit industrial complex": https://nypost.com/2019/01/04/mta-officials-are-fuming-over-...
[+] [-] Nitramp|7 years ago|reply
In Germany, labour unions are strong, but things like union security agreements are unheard of (and I was amazed something like that would exist when I first heard of it). The stories you read about corruption in US labour unions (admittedly subject to selection bias) are unheard of over here.
There are strong laws and customs around arbitration processes, and a culture of unions considering survival and success of the business above pushing through maximal demands. E.g. in a prolonged strike, if employers and union are unable to resolve the conflict, after some time arbitration by a generally respected elder statesman kicks in. They hear both sides, and then make a binding decision, which usually is generally accepted. It all seems a bit more balanced.
I'm not sure how much that transfers to other European countries. France famously has a different culture around strikes and unions, but doesn't seem to be representative (https://www.etui.org/Services/Strikes-Map-of-Europe).
[+] [-] pas|7 years ago|reply
This strange example of market failure points to us having insufficient information to understand the real transactions. MTA must get something else too from the unions to abide by their rules. (Allegedly it's Cuomo himself who benefits, thus he pressures the MTA.)
[+] [-] sct202|7 years ago|reply
[+] [-] secabeen|7 years ago|reply
[+] [-] perardi|7 years ago|reply
(They should have thrown in another billion to rebuild the Sheridan stop. Now that's a narrow platform.)
[+] [-] lukewrites|7 years ago|reply
[+] [-] magissima|7 years ago|reply
https://pedestrianobservations.com/2019/01/08/meme-weeding-u...
[+] [-] dmode|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] paulddraper|7 years ago|reply
Do any other politicians have systemic incentive to control costs? If so, how?
[+] [-] chanakya|7 years ago|reply
[+] [-] sitkack|7 years ago|reply
[+] [-] MarkSweep|7 years ago|reply
Compare this with subways and train stations in Japan which often have shops in the mezzanines and sometimes at the platform. There are always at least vending machines at the platform. I don't think this is unique to Japan, I recall there being shops in the station in Korea, Taiwan, and London too.
Why do the stations in our supposed capitalistic society not have any shops?
[+] [-] bane|7 years ago|reply
In the U.S. they are built as public works projects and owned in the end by some local municipal authority. Since they are public property, there's no incentive/ability to conduct commerce there. It would be like having a McDonalds inside of a library.
[+] [-] avinium|7 years ago|reply
I found that odd about BART, too - initially I thought this was due to crime (BART seems pretty sketchy, and opening up a shop there would be an invitation to robbers and thieves), but then I realized "safer" metros don't have them either.
[+] [-] burlesona|7 years ago|reply
[+] [-] thaumasiotes|7 years ago|reply
[+] [-] Nasrudith|7 years ago|reply
[+] [-] 3pt14159|7 years ago|reply
It is certainly worse in America, but it's not great in Canada either. The issue is this: There is no incentive alignment at multiple levels of these projects.
For example, I've worked with a couple great unions[1] but overall unions slow things down. There have been times where I've been reprimanded for lending a utility knife to open a pallet to a unionized worker.
It's too adversarial here and it really does slow things down. I've seen countless work-arounds to the rules just so employers can pay people that work harder more. For example, only valued employees are offered snow plowing work in the winter when construction is slow, but these tactics don't scale.
Then, on the other side, we do not pay our public servants enough and nor do we have high enough standards for their work. There are good public servants, to be true, but that's essentially random chance. It isn't because we've intentionally created a culture of achievement or excellence in our public works departments.
In both cases firing someone is too difficult. I'm not saying it should be easy, but I've known people that show up for work at 10:30am and leave, no joke, at 2:00pm. It's completely ridiculous.
Then there is the issue of building for the first time versus expanding or maintaining. First time construction is much easier. Standards are lower, there is less stuff in the way, everyone in the city is excited for the new thing so people make sacrifices. A new subway or sports stadium brings in business to the surrounding area, so part of the cost can be pushed on to local property owners in the area. Thirty years later when the soffit is cracked because subsurface water wasn't as expected there is none of that stuff. Just some angry commuters and shop owners wondering why it is taking so long.
I'm starting to think that capital projects, especially subterranean ones, are inherently worse than smaller alternatives. They're so expensive to maintain and once they're in there is no going back. I'd rather have lots of bike lanes or streetcars than subways. We could build a lot of bike lanes for the same cost of a subway, and even have them covered so snow and rain wouldn't be annoyances.
[0] I worked on lots of stuff for the TTC, including subway stations, and some stuff for the City of Toronto.
[1] Electrical worker union IBEW Local 353 was especially great because they pushed their employees to work hard. In exchange, they were able to negotiate default conditions like nine-hour, four-day work weeks. It fostered a sense of pride in their trade and work.
[+] [-] pimmen|7 years ago|reply
Meanwhile in Brazil, China and India curiosity reigns.
[+] [-] drpgq|7 years ago|reply
We recently added a new station for the GO regional railway transit system that currently has two trains a day and I think it was something like $50 million Canadian. I can understand needing an elevator for disability, but it could have started as something simple besides that.
[+] [-] sys_64738|7 years ago|reply
https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...
[+] [-] strangemonad|7 years ago|reply
So... a hypothesis?
[+] [-] thisisweirdok|7 years ago|reply
There were multiple problems along the way. It ultimately ended up costing $22 billion. People were also upset about this.
At the end of the day? It was an awesome project. They completely buried a highway that cut through the city, and added a ton of green space downtown (The Greenway).
The city is better for it. Taxpayers would never have allowed it if they had their way.
We need a similar program to revitalize the MBTA. It should be done regardless of the cost. I will happily pay more real estate taxes and highway tolls for the rest of my life to support it.