Cap Metro is taking Austin down this same track of severely understated costs, and greatly exaggerated estimates of ridership benefits.
Following is a recent article by Emory Bundy of Seatte. Mr Bundy is the a former director of The Bullitt Foundation, a private philanthropic foundation providing funding to nonprofit organizations working to protect, restore, and maintain the natural physical environment of the Pacific Northwest.
Mr. Bundy is former director of public affairs of Seattle’s King Broadcasting Company, co-chair of Citizens for Mobility and Board member, Sane Transit. He was a Columnist for Seattle Business Magazine, 1985-1990 and Director of the US/Soviet Exchange Program for the Seattle Goodwill Games, 1990. He is recipient of the Society of Professional Journalists’ national public affairs award, for The Eighth Day, on the future of the environment of the Puget Sound region, 1971 and recipient of the Champion Media Award for Economic Understanding, for major US television markets, for The Electrical Storm, on the Northwest’s nuclear power projects, 1983.
Mr. Bundy is an avid bicyclist, riding to work for several decades.
Mr. Bundy has written extensively on transportation including “Why Rail” published in Open Spaces magazine in 2002.
Urban Rail Transit–Latest Cost Overruns: Charlotte and Denver light rail
Urban rail projects are sold to the public at severely understated costs, and greatly exaggerated estimates of future ridership benefits.
Dr. Don Pickrell, a senior research economist at USDOT, documented this phenomenon 18 years ago, with a careful study of ten Federal Transit Administration “New Starts” rail projects. The popularized version of his study, “A Desire Named Streetcar,” appeared in the Journal of the American Planning Association, spring 1992. On average, the projects were twice as expensive as claimed, with half the proffered ridership benefits–hence the cost/benefit ratio was merely one-quarter of that represented in order to win approval. Usually they were the most costly public works projects ever undertaken by the sponsoring jurisdictions, representing a tragedy of enormous waste of public resources, and forfeiture of superior transportation opportunities, whether bus, bus rapid transit, bicycling, vanpooling, carpooling, demand-reduction, congestion pricing, HOV and HOT lanes, whatever.
An international team of scholars headed by Dr. Bent Flyvbjerg evaluated 258 public works transportation projects of all kinds, including 58 rail transit projects. Misrepresentations were the norm, but the most flagrant violators were the rail sponsors–with radical understatements of development costs, and even worse exaggerations of ridership benefits. (Bent Flyvberg et al, Megaprojects & Risk, Cambridge University Press, 2003.) The researchers probed why such egregious misrepresentations consistently occur, in the same direction, with no learning curve. They conclude that the primary reason is “strategic misrepresentation”–lie, in order to get the money flowing.
We conclude that the cost estimates used in public debates, media coverage, and decision making for transportation infrastructure developmentŠare highly, systematically, and significantly deceptiveŠ.The key policy implicationŠis that those legislators, administrators, bankers, media representatives, and members of the public who value honest numbers should not trust the cost estimates presented by infrastructure promoters and forecasters. [Flyvbjerg et al, “Underestimating Costs in Public Works Projects: Error or Lie?, ” APA Journal (Summer 2002)]
DC Metro rail is a splendid system–but it imposes gargantuan costs and subsidies. It “works” because it’s in the capital city of the richest country in the history of the world. Even so, it’s proving unsustainable. Capital costs, paid mainly by the federal government, supplemented by Maryland and Virginia, grossly exceeded estimates. Ridership fell far short, hence farebox revenues proved deficient. Operating costs are much higher than projected. The proffered business model featured a large Washington DC sales tax subsidy that, with the fares, would suffice to operate the system, and accumulate capital reserves sufficient for major maintenance, equipment replacement, and system capital improvements. But short on ridership and long on operating costs, NOTHING was saved: The system’s fares and tax subsidies can hardly make ends meet, year-to-year, hand-to-mouth. Now in its fourth decade, DC Metro needs $6 to $12 billion capital to address deferred maintenance needs, replace aged equipment, and marginally improve its operations–more than the entire original cost. Its strategy is to start with a federal grant (a notorious pork-barrel “earmark”), to leverage another round of subsidies from Maryland and Virginia, to leverage another large sales tax increase from the District of Columbia. The escalation of already prodigious subsidies might sustain DC Metro for another round, whereupon today’s fiscal crisis will be repeated.
Meanwhile, much more efficient bus transit in DC, on which many lower-income residents depend, has been shamelessly short-changed as resources are siphoned into upscale rail:
Each day, 443,000 passengers — many without options — grapple with a transportation system of last resort. Buses are so unreliable, even Metro’s chief executive has acknowledged that the schedules are fiction. [Washington Post, 12.27.05]
Bad as the general picture is, Sound Transit rail is off-the-scale, with misrepresentations worse than any of the 58 projects studied by the Bent Flyvbjerg team. Though neither Sounder commuter rail nor Central Link light rail are anywhere near complete, it’s clear that the capital cost of Sounder will exceed a 100% cost overrun, and Central Link could exceed 200%. Sounder has about half the promised riders for this stage, five years after service began. On a per-train basis, operating costs are 2.5-times the level predicted by the agency, hence six Sounder trains cost $30 million to operate, which was supposed to suffice for 15 daily trains. Central Link is poised to violate its ridership and operating cost projections, just like its egregious excesses of its capital cost and construction schedule promises. Sounder was to be complete in 2002; latest estimate is 2012. Central Link was to be fully completed in 2006; now its initial segment might go into service by late 2009, and its second phase in 2016/17, maybe–but even then Central Link still will be far from finished, and Sound Transit won’t be able to complete it unless it gets an infusion of more taxing authority from its Phase 2 proposal.
Recent news reports indicate that Charlotte’s light rail project–guided by Parsons-Brinckerhoff, just like Boston’s notoriously misrepresented Big Dig project, and Sound Transit’s rail projects–is experiencing enormous cost overruns that have resulted in a citizen initiative campaign to stop the project. The big election-season money will favor the rail promoters, as vendors pony-up to keep their boodle flowing. But the initiative is a sign of citizen resistance to the dissembling rail promoters and their political sponsors.
In Denver the transit agency has been forced to admit that its projected capital cost has escalated from $4.7 to $6.1 billion–up $1.4 billion, 30%, in one year. With time, it’ll get worse.
The consistent pattern of mendacity is evidence that the sponsors know their rail projects cannot measure-up to an honest cost/benefit evaluation. And they know that the public can be persuaded to vote the money only if it’s hoodwinked. As University of California, Irvine, economics professor Charles Lave observed,
[We have] an odd marriage between idealistic planners and cynical profiteers. The idealists…perceive cars as a problem…The profiteers are the engineering companies that go around the country pandering to the idealists….[L]ike cancer quacks, consistent failures do not bother them. They know there is money to be made by peddling hope. [LA Times, 6.30.98]
Which is what Sound Transit is doing in the Central Puget Sound area, today, as it seeks voter support to double its tax subsidy, in order to develop an increasingly wasteful, unproductive transit system.