As noted here before, a light-rail line from Minneapolis to the wealthy suburb of Eden Prairie was originally supposed to cost $1.2 billion for 15.8 route miles, or less than $80 million a mile. Now the projected cost has risen to more than $2 billion for just 14.5 route miles, or around $140 million a mile.
On top of this, the Metropolitan Council, which is planning the rail line, is in a dispute with a local railroad whose right-of-way Metro wants to use for the light rail. The railroad is concerned that light-rail construction will delay its trains. This dispute is being dealt with in a time-honored American fashion in which the railroad is suing the Met Council.
The Met Council is counting on getting $929 million from the Federal Transit Administration, but the FTA hasn’t signed a full-funding grant agreement and the Trump administration is resisting funding any projects without such agreements (though, as noted yesterday, it has made some exceptions). Local governments, however, would be responsible for covering all cost overruns including the recent $200 million increase in projected costs.
The costs aren’t the only things to have changed. When planned, the project was supposed to open in 2017 and carry 22,800 trips per average weekday, growing to 29,700 by 2030. Now completion is not expected before 2023, and planners have reduced ridership estimates to 18,900 the first year and 28,800 in 2035.
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When the Southwest line was planned in about 2010, light rail seemed to be a success in the Twin Cities. Many other cities that had built light rail saw bus ridership take a big hit. But in the Twin Cities, both light-rail and bus ridership were growing.
That’s changed since then. Now, rail ridership is growing slowly, but bus ridership has been falling since 2013. Between 2015 — the first full year of operation of the region’s second light-rail line — and 2017, the region lost more than five bus riders for every rail rider it gained (including both light and commuter rail).
Add rising costs and declining ridership to the fact that light rail is really a low-capacity transit system, and that buses can move more people faster at a far lower cost, and there really is no reason to build this project. The Met Council should use the lawsuit and cost increase as opportunities to simply kill this turkey.
The Antiplanner wrote:
Now the projected cost has risen to more than $2 billion for just 14.5 route miles, or around $140 million a mile.
Professor Bent Flyvbjerg of University of Oxford has documented massive cost overruns associated with many transportation projects (including the Channel Tunnel between France and Great Britain and the new (in 1995) Denver International Airport).
Dr. Don Pickrell of the U.S. DOT Volpe Center made similar observations about U.S. rail transit project in a report published way back in 1989 (scanned copy here).
But projects that propose to carry passengers in vehicles that run on steel rails seem to be especially prone to giant increases in cost over the early estimates that are used to secure the approval of a project.
Quoting the Flyvbjerg Wikipedia entry linked above:
His research has shown that competition between megaprojects and their sponsors creates political and organizational pressures that leads to the consistent overestimating of project benefits and the underestimating of project costs. The best megaprojects do not get implemented, but rather the ones that look best on paper.
Quoting Pickerell’s report (released in (!) 1989):
[Emphasis added]
Actual ridership that differs significantly from its forecast level indicates that a project’s benefits are also likely to vary from the expected level that led to its selection from among the alternatives under study.
Capital costs that differ markedly from their anticipated level can substantially increase the financial burden on the government program and agency funding the project resulting in postponement or cancellation of other projects competing for its support.
Similarly, operating expenses that exceed their projected level can increase operating deficits or require reductions in the level of other transit services that an agency can operate within its budget.
If the divergence between a project’s forecast and actual cost-effectiveness in attracting new transit passengers exceeds the margin by which the chosen alternative was preferred
to others that were rejected, the planning process may not have led to selection of the most desirable project.
Any transportation project that costs more than a billion dollars there’s gonna be cost overruns. Road, rail, airport, ports, whatever. Where government corruption, nepotism and shear stupidity reign there’s gonna be cost over runs. The question is, which one absorbs the brunt of it’s cost overruns, which one holds up in the long run.
A year or two ago a decision was made to shorten the line somewhat, cutting off one or two stations on the western end of the line. This was of course in response to yet another of the project’s “unforeseen” cost increases. It may also have something to do with the downgraded ridership forecast. Moreover, it suggests that the project’s cost overruns are even larger than the current $2 billion construction cost estimate indicates.
I wouldn’t be suprised if ridership on this live, if it’s built, is as low as Northstar on the portion between Eden Prairie and Hopkins. Those working in Downtown MPLS the only sizeable place with density on the line, will still have express buses they can take. Instead of a long, slow train ride with all sorts of characters, they’ll be able to ride a proper coach bus with a plush seat and wifi surrounded almost exclusively by other white collar workers AND go direct to downtown.