November 30, 2021

Problems with infrastructure more than just money

“Years of Delays, Billions in Overruns: The Dismal History of Big Infrastructure” reads a headline from yesterday in the New York Times. The story does well to illustrate the real problems with American infrastructure, which are not primarily about lack of funding.

Here’s the gist:

American cities and states were long renowned for some of the greatest bridges, water systems and freeways in the world, but challenges have grown more potent. Agencies have less internal technical talent. Legal challenges have grown stronger under state and federal environmental laws. And spending on infrastructure as a fraction of the economy has shrunk, giving local agencies less experience in modern practices.

On Honolulu’s rapid-transit project, there were “problems with welding and cracks in the tracks” and then “earlier this year, engineers realized that in some sections, the wheels were a half-inch narrower than the rails.”

California voters approved a high-speed rail project in 2008 that was estimated to be completed in 2020 at a cost of $33 billion. “The job is now projected to finish in 2033 for $100 billion, though those estimates are dated and there is an $80 billion funding gap.”

On the East Side Access extension of the Long Island Rail Road:

Conceived more than a half century ago, with a construction contract awarded in 2006, that project was supposed to be completed by 2011. Early estimates put the cost at $2.2 billion, then $4.3 billion in 2006 and $6.4 billion in 2008. The Metropolitan Transportation Authority now envisions completion in December 2022 at a cost of $11.1 billion. Design changes, underground tunneling problems and coordination with other agencies were some of the factors in the delays and cost increases.

On a nuclear clean-up project in Hanford, Wash., where land was polluted as part of the Manhattan Project, “an independent review in 2015 found 362 significant design problems.” The Department of Energy “announced a 17-year delay and estimated the system would become fully operational in 2036.”

These aren’t honest mistakes, either. Costs of major projects are difficult to estimate, but if this were simply a matter of statistical error, you’d expect as many overestimates as underestimates. Instead, the figures that consultants put out are almost always underestimates of the true cost. “Bent Flyvbjerg, a professor at the University of Oxford who has studied scores of projects around the world, found that 92 percent of them overran their original cost and schedule estimates, often by large margins — in part, he said, because cost estimates are ‘systematically and significantly deceptive.'”

That confirms research reported in the Wall Street Journal earlier this year that focused only on the United States. The logic for decision-makers makes perfect sense when you consider the incentives. For a “candid admission of how the political world operates,” the Times quotes Willie Brown:

“In the world of civic projects, the first budget is really just a down payment,” he wrote in a guest newspaper column in 2013. “If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big there’s no alternative to coming up with the money to fill it in.”

We’ve known about these problem for years (Flyvbjerg wrote a whole book on it in 2003), and marathon construction projects make people’s everyday lives more difficult. Yet few Americans seem to care. Infrastructure spending is still a popular idea with most of the electorate, as the bipartisanship of the most recent bill demonstrates, and politicians are basically never held accountable for the overruns that inevitably come to pass.

Aside from some tinkering around the edges, the bipartisan infrastructure law just shovels money into a broken system. We aren’t getting what we pay for now. The solution to that problem is not to spend more money.

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