Rail transit projects built in the United States typically suffer severe cost overruns and end up carrying far fewer riders than originally projected. The latest studies published by the Federal Transit Administration (FTA) indicate that the projections made for some recent projects are better than those made in the past. However, this is partly because the FTA has changed its definition of “cost overrun” and partly because the FTA has not yet looked at some projects that we know have huge overruns, such as the Honolulu rail project.
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The Department of Transportation first looked at this issue in a 1990 report by Don Pickrell, who looked at four heavy rail, four light rail, and two automated guideway (“people mover”) projects in nine cities. On average, Pickrell found, building these projects ended up costing 62 percent more than projected, operating them cost 130 percent more than projected, and ridership was 47 percent less than projected. Continue reading
