More Overbudget Rail Projects

The planned Honolulu rail line is likely to go at least 30 percent over its projected costs, and ridership is likely to be 30 percent less than forecast, according to a new report commissioned and released by Hawaii’s governor. The report cost $350,000, which means it commands more respect than if one of the Antiplanner’s faithful allies had written it for free. (Actually, one of the Antiplanner’s faithful allies, Tom Rubin, did help write the report–but not for free.)

The report says the rail line, which the city projected would cost $5.5 billion, is likely to cost at least $1.7 billion more. While local voters approved a sales tax increase to pay for the line, the report projects that tax will be insufficient to pay for the rail line. Over the next 30 years, “The total capital and operating subsidy paid by local taxpayers” on top of the sales tax “is estimate to range from $9.3 billion . . . to $14.5 billion.”

“Transit system usage and fare revenue are likely to be substantially lower than is project,” adds the report, “since the Plan’s projection would require an unprecedented and unrealistic growth in transit utilization for a city that already has one of the highest transit utilization rates in the country.” Update:The full report is downloadable from a state web site.

The official report’s conclusions are similar to those of an article by Honolulu rail skeptic Cliff Slater, who reportpoints to an FTA analysis estimating that the final cost will be $7.2 billion. The FTA, says Slater, estimates that there is only a 10 percent chance that the line’s projected costs will be accurate.
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Meanwhile, in California, a planned train in Sonoma and Marin counties, known as the Sonoma-Marin Area Rail Transit (SMART), is now expected to cost $350 million more than its original projection of $695 million. The cost overrun is so large that the transit agency is thinking of building only half the original route. Voters approved this train in 2008 after twice rejecting it in earlier elections.

In other news, one more report criticizing the California High-Speed Rail Project has been published, this one written by transportation professionals such as the former state director of transportation. The report said the state rail authority suffered from an “air of unreality.” I haven’t found a link to the study itself, but when I do I’ll post it here.

While some people would say that these projects would be cancelled, they need to realize that the point of politics is to make it look like you are doing something when in fact you are accomplishing nothing at all. So long as we let politicians, instead of markets, make transportation decisions, these are the kinds of results we should expect.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

16 Responses to More Overbudget Rail Projects

  1. Borealis says:

    Interesting data. I would be interested in knowing if any high speed rail or rail transit projects have ever been built under the projected cost, or even close to the projected cost.

  2. the highwayman says:

    The Autoplanner: Actually, one of the Autoplanner’s faithful allies, Tom Rubin, did help write the report

    THWM: Then it’s just biased worthless garbage, exactly like what you write O’Toole.

  3. JimKarlock says:

    So long as we let politicians, instead of markets, make transportation decisions, these are the kinds of results we should expect.
    JK: Can we please quit talking of markets as an abstract?

    Perhaps better to talk of people making decisions about what they need and/or desire in their daily lives?

    (This is usually completely opposite of what the planners would decide for people.)

    Thanks
    JK

  4. FrancisKing says:

    The highwayman wrote:

    “Then it’s just biased worthless garbage, exactly like what you write O’Toole.”

    Well, I don’t always agree with Antiplanner, but the papers that he writes are well referenced, and if you think he’s got it wrong you could always take those sources and write your own report.

    As an example –

    “So long as we let politicians, instead of markets, make transportation decisions, these are the kinds of results we should expect.”

    That depends, Antiplanner, on whether you think that the market is free, that is to say, any option can be purchased equally. In the case of transit, for example, more cars means fewer occupied transit seats, reduced service, and so on. So the market is not free, the choice of one person directly affects the choices that other people can make.

    Politicians, therefore, need to set the market up – including possible measures such as road pricing, bus lanes, etc. Whether or not you agree with their judgement is, necessarily, another matter.

  5. OFP2003 says:

    Best quote: “So long as we let politicians, instead of markets, make transportation decisions, these are the kinds of results we should expect.”

  6. bennett says:

    JimKarlock said: “Perhaps better to talk of people making decisions about what they need and/or desire in their daily lives?”

    They’re called bond initiatives. Seeing as there is never 100% consensus and there are certain services that people “need and/or desire” that the private sector cannot/will not provide, it’s the best we have. I’m not exactly sure how a referendum represents “what the planners would decide for people.” For those who show up, the choice is theirs.

  7. bennett says:

    FrancisKing said: “That depends, Antiplanner, on whether you think that the market is free, that is to say, any option can be purchased equally. In the case of transit, for example, more cars means fewer occupied transit seats, reduced service, and so on. So the market is not free, the choice of one person directly affects the choices that other people can make.

    Politicians, therefore, need to set the market up – including possible measures such as road pricing, bus lanes, etc. Whether or not you agree with their judgement is, necessarily, another matter.”

    It makes you wonder what would happen if we focused on improving the political process instead of vilifying it at every chance. We always hear “We’re not anarchist!” from the “limited government” bandwagon, but (other than defense) we never hear about how to improve the process of government intervention from these folks. It’s always about eliminating government. Maybe many of my opponents are not plutocrats or anarchists, but they sure talk the talk.

  8. msetty says:

    There is a common thread in all the rail systems cost overruns cited by The Autoplanner here: the engineering firm of Parsons-Brinkerhoff is involved.

    Perhaps this “Parsons Brinkerhoff Effect” explains why what should be a simple commuter rail system (SMART) would cost over $11 million/mile, while New Mexico Railrunner cost about $4 million per mile–including 18 miles of totally new trackage–or the Nashville Music City Star system cost about $1.3 million/mile sans new vehicles.

    Or the proposed first California HSR trackage includes 20+ miles of elevated railroad viaduct despite the fact that the location is perfectly flat over the line’s entire 64 miles, and that the viaducts would be designed to carry 140-ton locomotives so the existing San Joaquin trains could use the trackage while waiting for the rest of the HSR system to be built–which would be a very long wait, given such a hare-brained strategy.

    Ignoring the ideologically-driven blatherings of many here, in the U.S in terms of any kind of rail transit, (1) we seem to have the worst of both possible worlds–the fact that the U.S. has lost much of its competence, engineering and otherwise, much as the later Roman empire did in its long decline into corruption and irrelevance; and (2) this is mixed in with such things as the “Parsons Brinkerhoff Effect” where the goal is to maximize billings by cloning the most expensive rail technology everywhere, e.g., BART.

    The Autoplanner graciously linked to the automaton video I supplied, so I’ll provide a (nearly) as whimsical solution: give dictatorial powers and $1 trillion to the folks who run the Swiss Railways to build what they’d build in the U.S., with no questions asked, and THEY ALONE selected the contracted engineering and construction firms, insulated from the corrupt U.S. political process. You can be sure the Swiss would build whatever made the most sense and would be as cost-effective as possible. Given the Swiss approach to things, $1 trillion may be way too much, including a nation-wide 17,000 mile HSR net…

  9. Hugh Jardonn says:

    msetty makes an interesting point about the “PB Effect.” Hopefully, someone with more free time can do an analysis of non-PB projects to see if any of them also have a history of budget-busting cost overruns.

    But pointing out the “PB Effect” sidesteps the real question, which is “why do the clients/public agencies continue to let PB (and maybe others) get away with busting the budgets with gold plated projects?” After all, fool me once….

  10. msetty says:

    Hugh Jardonn, RE the “PB Effect”…

    …part of the problem is the continuing turnover in politicans, and the fact that true transit expertise is in very short supply, not only among engineers but most certainly elected officials. This is the “serious” basis for my quip about the Swiss. Just recently, two knowledgeable CHSRA board members “got the boot” because they were also members of transit boards in Los Angeles and Orange Counties, where the transit authorities have gotten wise to the “PB Effect.”

    Since Jerry Brown is still the Attorney General that made that ruling, we’ll know soon whether it was enforcing the letter of the law, or he’s “in on” the corrupt/incompetent nature of the CHSRA and is an ally of the “bad guys” on that board. We’ll know soon enough.

    In the opinion of knowledgeable transit advocates and myself, the best thing to do is essentially junk everything CHSRA has done to date, and “reboot” California’s HSR effort by seeking open proposals from the various consortiums that have build HSR elsewhere. For the useless line “nowhere to nowhere” they want to build for a bit more than $4 billion, you could practically build a 250-mile full double track, electrified line from Tracy to Bakersfield down the middle of I-5, since there are few major structures, the route is already owned by the State of California, and is dead straight over almost the entire distance.

    If California loses the $2.5 billion in federal HSR grants right now, well, “so what” if a more rational system can be developed using the $10 billion in bonds to match private sector contributions that have a realistic chance of being paid back?? The only way I see this working is with the 75-minute travel time 250 mph+ segment on I-5 between Tracy and Bakersfield as the “core” of the network. When you add the Bakersfield-LA connection and service over upgraded existing tracks at both ends to the Bay Area, Sacramento and Los Angeles for a quarter of the $70-$80 billion+ cost of the way the CHSRA is currently headed.

  11. Hugh Jardonn says:

    msetty’s two posts above that discuss the “PB Effect” of gold plated transit projects touches on an issue that I’ve been trying to articulate for a long time.

    Assume for the moment that it’s a desirable goal of society to provide a decent public transit service for those who cannot drive or prefer not to. It’s possible to make a conservative argument for this position, as Paul Weyrich used to before he died.

    The problem comes when public agencies force through big, wasteful projects such as the Big Dig, East Side Excess, ARC, New Bay Bridge, CA HSR, BART to SFO, BART to SJ, Oakland Airport Connector, MUNI Central Subway, 2nd Avenue Subway and a multitude of maglev/PRT/gadgetbahn projects. From a true transit advocate’s point of view, these wasteful projects just reinforce the public perception that transit is a waste of money. True transit advocates would help their cause by joining with skeptics like the Antiplanner to find common ground fighting the wasteful projects.

  12. msetty says:

    Hugh, you don’t get any argument from me about what “true transit advocates” should be fighting, or supporting, as the case may be with cost-effective projects.

    The problem with allying with The Autoplanner, CATO, Reason Foundation and those of similar viewpoint is that while they will agree about wasteful spending, they ALSO will never admit that there may be cost-effective transit projects, or if there are, they are exclusively bus projects that can easily be privatized–as though privatization in itself, a priori, was good regardless of the impact on the public good.

    In much of the research I’ve completed in the past, my associate Leroy Demery and I have found strong evidence that full economic justification of new rail services requires at least 5,000 daily passenger miles per 2-way route mile, or a minimum of 10,000-12,000 daily riders on a given line assuming average trip lengths of about 50% of the total line length. For this research, see http://www.publictransit.us/ptlibrary/specialreports/sr2.trafficdensityretrospective.htm or http://www.publictransit.us/ptlibrary/specialreports/sr2.trafficdensityretrospective.pdf.

    Several years ago, I got into an argument with outspoken rail critic and libertarian fellow traveler Tom Rubin about this very issue, when he was making the claim that only very high ridership could justify rail transit, such as BART across San Francisco Bay (which exceeds 150,000 trips per day). I tried to pin him down about the minimum threshold where rail might be justified, including citing much of the information that later wound up in my Special Reports. Of course I wasn’t surprised when he would have none of it…but I digress…

  13. FrancisKing says:

    msetty wrote:

    “give dictatorial powers and $1 trillion to the folks who run the Swiss Railways to build what they’d build in the U.S., with no questions asked”

    Which would have exactly the opposite outcome to the one expected. The point is that the Swiss public have to be consulted before a major transport project is built, and so the result always addresses the needs of the public.

    It is also worth adding that they supply transit even to very low housing densities as a matter of policy. They don’t hold utopian views about cars.

  14. Hugh Jardonn says:

    msetty, I get that you and the Antiplanner will never agree that there may be cost-effective transit projects besides bus projects that can easily be privatized. I’ve followed this blog long enough to understand this and it’s not my point.

    The problem of gold-plated public works projects, not just transit (see Big Dig, new Bay Bridge) is giving public works a bad name. This is a much, much more serious problem than the threshold of cost effectiveness of certain projects.

    Find common cause with The Autoplanner, CATO, Reason Foundation et.al. long enough to shed light on the “PB Effect” and then you all can go back to arguing about how many angels dance on the head of a pin.

  15. msetty says:

    Hugh Jardon:
    The problem of gold-plated public works projects, not just transit (see Big Dig, new Bay Bridge) is giving public works a bad name. This is a much, much more serious problem than the threshold of cost effectiveness of certain projects.

    Find common cause with The Autoplanner, CATO, Reason Foundation et.al. long enough to shed light on the “PB Effect” and then you all can go back to arguing about how many angels dance on the head of a pin.

    So how do you proposed to do such a thing? A website? Funded and fronted by whom?

    Francis King:
    Which would have exactly the opposite outcome to the one expected. The point is that the Swiss public have to be consulted before a major transport project is built, and so the result always addresses the needs of the public.

    If you know the history of the ZVV, this most certainly wasn’t the case a few decades ago. Canton Zurich voters turned down subway proposals more than once, as well as an early regional rail proposal. The public insisted on keeping Zurich’s massive tram network, and only approved an upgrade to the Zurich S-Bahn network after LOTs of public consultation. The current success of Zurich Canton’s VBZ transit integration program is built directly upon earlier voter revolts. For a quick history, see Chapter 8 of Mees’ most recent book, Transport for Suburbia: Beyond the Automobile Age.

    Of course, my semi-serious proposal for a Swiss transport dictatorship in the U.S. was to make a point, and will never happen.

    But perhaps we can put together a few federally-funded transit demonstration projects based on Swiss transport planning principles–PROVIDED such efforts can be insulated from the PB Effect. Certainly there are any number of cities that would be good examples, but I’d also consider rural areas modeled on what they’ve accomplished in Graubunden…how about Missoula and the Bitterroot Valley in Montana, which has similar densities to Graubunden but only ONE traffic corridor along U.S. Highway 93…

  16. Hugh Jardonn says:

    msetty: “So how do you proposed to do such a thing? A website? Funded and fronted by whom?”

    Well, this website would be a place to start. And you have your informative but infrequently updated and poorly formatted publictransit.us site. At one time, you had a post where you discussed the BART-to-SJ project and admitted that the Antiplanner made some valid points against it.

    I’m not stupid enough to think that you and the Antiplanner will join hands and sing kum-buy-ah. I’m trying to urge you to focus on what is the biggest problem in public works these days.

    If the USA and the USSR can find common cause to defeat Nazi Germany, than certainly you and the Antiplanner can team up to have a go against PB.

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