Are America’s subways and roads overpriced?
By Brad Plumer,
1. Standards have risen. Our obsession with safety, features, environmental protection, and quality drive up the cost. Engineering design is often 20% of project costs. If only we would tolerate a few more deaths, a bus without AC, pollution, and frequent breakdowns, our initial costs would be lower. But when do reasonable investments become gold plating? Does the firetruck really need to do a 360 degree turn on the cul-de-sac, or can it back out?
And here’s a broader complaint:
5. Projects are scoped wrong. We have investments that don’t match actual demands. And this is not just formegaprojects. We have big buses serving few passengers. We have overgrown highways. We have a fear of building too small and having congestion or crowding so we build too big.
Levinson provides plenty more theories at the link. One thing that’s missing from his discussion, though, are cross-country comparisons. For instance, Alon Levy points out that California’s high-speed rail will cost about twice as much, per kilometer, as the Shin-Aomori extension of the Tohoku Shinkansen in Japan, a comparable project. “And,” Levy notes, “Japan is a high-construction cost country.” The Shinkansen doesn’t skimp on amenities or safety. What has Japan figured out that we haven’t?
Over at Atlantic Cities, David Lepeska recently made a similar observation, noting the wide variety in subway costs. The 13.6 kilometer Second Avenue subway line in New York will cost $17 billion, or about $1.24 billion per kilometer. By contrast, Sinagpore’s new Circle line cost $4.8 billion for 35.2 kilometers and 28 stations — or $136 million per kilometer. Subway expansions in Madrid, Paris, and Berlin have all been far, far cheaper, per kilometer, than New York’s big project.
Why’s that? Some analysts have blamed the hard bedrock in Manhattan, restrictive regulations, and pricey real estate, while others have cast aspersions on overly inflated contracts. Then there are the cultural differences that could produce delays and other assorted difficulties: “Americans and Europeans generally hold different views of major public transport projects,” Lepeska writes. “The latter see the expense as justified, even necessary, while the former tend to embrace driving and view major construction projects as a potential hassle.” Whatever the reason, the United States appears to be overpaying for infrastructure, which, in turn, generally means end up with less of it.