Megaproject expert Bent Flyvbjerg–who is now at Oxford University–has a new book called, coincidentally, the Oxford Handbook of Megaproject Management. His introduction, which he was nice enough to make available on line, introduces the Iron Law of Megaprojects along with “ten things you need to know about megaprojects,” at least if you think you are going to try to manage one.
The Iron Law is, simply, “Over budget, over time, under benefits, over and over again.” He says that 90 percent of megaprojects go over budget and most end up under performing. Continue reading
Thanks to the wonders of government planning, San Diego County residents have to pay more for water they are not allowed to use. California, as everyone knows, is suffering a drought, so the state legislature mandated water conservation statewide, whether it is needed or not.
San Diego is one place where it isn’t needed, as that county has 99 percent of its normal amount of water. Yet residents are still required by state law to “let their grass die.” The costs of providing water haven’t declined, so the reductions in water usage due to mandatory conservation measures have forced the county water authority to raise its rates to cover those costs.
But it gets worse. San Diego is about to get an overabundance of water that is more costly than ever as a new $1 billion desalination plant is about to open that will increase the county’s water supply by as much as 10 percent. The plant is privately financed, but was built only after the county signed a contract agreeing to buy water from the plant whether it needed it or not. The water authority expects to spend $114 million next year buying water that was previously costing it only $45 million. This has led it to increase in water rates yet again.
Before being shut down, the Columbia River Crossing–a consortium of eight government agencies–spent $170 million. The lion’s share of that went to one consulting firm, David Evans and Associates, which was supposed to write the draft and final environmental impact statements for the bridge.
In fact, it turns out that Evans hired a lobbyist to convince the Oregon state legislature to appropriate well over $400 million to built the bridge. But the lobbyist, Patricia McCaig, never registered as a lobbyist or revealed her source of income. Instead, she claimed to be a “special advisor” to the governor.
Although McCaig’s true job was made public by Willamette Week last February, no one in the state government did anything about this likely violation of Oregon’s lobbying law until after the legislature adjourned. Now, the Oregon State Ethics Commission says it is investigating McCaig for possibly violation of eight different laws. It seems likely that Evans also hired someone to lobby the Washington state legislature, which narrowly defeated a bill providing funds to the project.
The dark nature of the consulting world–where government agencies overpay consultants to do various analyses and then the consultants promote the projects–always seemed apparent. But this is the first case in the Northwest at least where a consultant was caught redhanded covertly spending money lobbying for an expensive project. This is just one more reason why government should avoid doing megaprojects like the Columbia River Crossing, which involved a bridge, a light-rail line, reconstruction of numerous highway intersections, and other work.
The Antiplanner’s presentation at last night’s debate over Plan Bay Area is now available in PowerPoint or PDF format. You can also download Tom Rubin’s presentation in PDF format.
The debate was one-sided in the sense that close to 90 percent of the audience opposed the plan. One little incident sticks in my mind. During the debate, one of the plan’s supporters admitted that it was hard to predict the future, but added, “As Abraham Lincoln said, ‘The best way to predict the future is to create it.'”
I am a stickler for sourcing such attributed quotes, and that didn’t sound like something Lincoln would say. So I pulled out my iPhone and looked it up. Sure enough, it has been attributed to Lincoln–and to Peter Drucker, and to some other people. But it seems the person who actually first said it was computer programmer Alan Kay in 1971. I hope readers will understand what I mean when I say that knowing that Kay said it gives it a completely different meaning than if Lincoln had said it.
Reports of riots in Stockholm suburbs probably brings to American minds images of single-family homes and SUVs burning. Though Stockholm has plenty of American-style suburbs, the riots were not in those areas.
Instead, they were in high-density housing projects that Sweden built in an effort to promote transit ridership, which planners today would call “transit-oriented developments.” Most Swedes, however, refused to live in these projects, so they became home to Sweden’s second-class citizenry, namely immigrant and often Muslim workers.
Portland Streetcar, the non-profit organization that operates streetcars in Portland, is demanding that the city cough up $145,000 to fix its brand-new, American-made streetcar. Let’s take a look at the history of this car.
First, the city used its own money to buy streetcars from the Czech Republic for an average of $1.9 million apiece. Each streetcar has just 30 seats, but the cost per vehicle is about six times greater than a 40-seat bus. But that wasn’t expensive enough.
The most recent expansion of Portland’s streetcar system was funded by the federal government, which has a buy-America requirement. So Oregon’s congressional delegation and lobbyists persuaded the Federal Transit Administration to give Oregon Iron Works $4 million to build a prototype streetcar. The company used plans purchased from the Czech manufacturer of Portland’s streetcars to effectively produce a replica of those cars.
The Economist reviews housing prices in London, one of the most expensive cities in the world, and what do you know, it finds that high housing prices are due to urban planning. “The biggest constraint on development in London is the Green Belt,” says the magazine that calls itself a newspaper. “Tt runs (with perforations) all around London, to a depth of up to 50 miles, and bans almost all building on half a million hectares of land around the city.”
Ah, but Britain has 62 million people in an area slightly smaller than the state of Oregon (94,000 vs. 98,000 square miles), so those greenbelts are needed to preserve farms, forests, and open space, right? Not really.
As a BBC writer points out, urban areas cover just 6.8 percent of the United Kingdom (10.6 percent of England, 1.3 percent of Scotland, 3.6 percent of Northern Ireland, and 4.1 percent of Wales). Moreover, much of the land inside those urban areas is open space, so less than 2.3 percent of England, and even smaller proportions of the rest of the kingdom, have been “paved over.”
Last night, the Antiplanner dreamed that Apple, the company with the highest market capitalization in the world, was spending some of its $97 billion in cash on roads, bridges, and other local infrastructure. A crazy idea, I know, but then, in the dream, some politician says, “What a great idea! Let’s create some TIF and special assessment districts so other corporations can help our infrastructure too.”
Somewhere between dreamland and waking up, I tried to explain why this was a bad idea. Suppose a town has two business districts, I said, and one is doing poorly compared to the other, possibly because it is older. Shops, restaurants, and other tenants turn over frequently, vacancy rates are high, and the shops that do exist tend to be downscale, including thrift stores and antique malls. The other district, perhaps because it is newer, is doing much better.
Suppose the city creates a special-assessment district around the older area and uses the funds to update the infrastructure. Unfortunately, the assessments, i.e., taxes, paid by the property owners in the district force them to raise rents, which causes even more turnover. The other district will probably complain and demand its own infrastructure improvements, which the wealthier property owners will more easily afford and thus give that district an even greater advantage over its rival.
Someone named Marc Fasteau urges the United States to adopt an industrial policy. Because, after all, it worked so well in Japan (two lost decades of nearly zero economic growth), China (rapid growth but rampant corruption), and Germany (which has fined one of its biggest manufacturers more than $1.5 billion for bribing local officials to sell its products).
Fasteau’s column is accompanied by the above mindbogglingly complex (and almost unreadable) chart showing how five federal departments or agencies would work with banks and corporations to create a US Tech Strategy Board that would engage in a “technology based planning system.” This system would be sure to bring the rapid pace of technological advancement in computing, biotech, and other fields to a near standstill. The board would no doubt endorse high-speed rail, minicomputers, composting toilets, and other “modern” technologies.
The World Trade Center that was destroyed almost ten years ago was a frequently photographed symbol of New York City, but it was also a huge boondoggle of the New York & New Jersey Port Authority that was heavily subsidized by motorists paying bridge tolls. So of course, it is completely appropriate that the building that will replace it will be an even bigger boondoggle, costing $3.3 billion. As New York Times columnist Joe Nocera says, this is “an example of just about everything wrong with modern government.”
Still under construction.
Flickr photo by Sergey Shpakovsky.
This price tag will make it “by far, the most expensive office building ever constructed in America,” yet it “will add 2.6 million square feet of office space in a city that doesnâ€™t need it.” At the time the original, 13.4 million-square-foot World Trade Center was destroyed on 9/11/01, Manhattan already had more than enough vacant office space to make up for it. At the most recent report I can find, downtown Manhattan alone currently has more than 10 million square feet of vacant space.
The building will be just one part of “a staggering $11 billion worth of government-sponsored construction,” says Nocera, including a subway station that is already $1 billion over budget. How fitting that we celebrate the attack that led to the most expensive war we’ve ever fought with the most expensive war memorial ever built. Of course, somewhere with 72 virgins, Osama Bin Laden is laughing away, because what better way to defeat the Americans than to get them to spend themselves into oblivion.