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. . . . 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.Engineer David Levinson explains that this applies even to small projects like putting up traffic signals at an intersection, which costs around $175,000. He had some thoughts on why here, of which I liked these two:
- 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?
- Principal-agent problem. Public works agencies are spending Other People's Money, and so are less motivated to get value for dollar than an individual consumer on their own. This principal-agent problem prevails in lots of organizations, but especially so in public works where the bias is not to have a failure.