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Why U.S. Infrastructure Costs So Much

145 pointsby mtviewdaveabout 9 years ago

24 comments

bradleyjgabout 9 years ago
I don&#x27;t have any love for NYC construction unions and their ridiculous work rules, but the fact that France -- France! where strikes shutting down the whole country is a national pastime -- does better means that can&#x27;t be the number one answer. Similarly we can rule out corruption because even Chicago is a piker compared to Shanghai. I think both unions and corruption play a part but not of the first rank.<p>The first candidate I&#x27;d propose for the top slot is diffusion of responsibility stemming from a US obsession with localism. An MTA project might well be paid for by: the federal government, NY state, NYC, and bonds to be paid back by a dedicated tax in 10 downstate counties. There are contracting rules imposed by each of those sources. And it is administered by the MTA board, a monstrosity with appointments from eight different sources. The buck stops nowhere.<p>The second candidate is, paradoxically, the progressive era procurement rules designed to rein in corruption. They leave too little discretion. In a two sided competitive game, if one side is hampered in by slow changing inflexible rules the other side is going to dominate. That&#x27;s exactly what happens. Government contractors play the system like a fiddle and there&#x27;s little the government negotiators even when they are supremely competent and diligent can do about it.
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JumpCrisscrossabout 9 years ago
We just had a novel crane&#x2F;derrick start-up in New York shut down by the reigning tower-crane union [1].<p>I also noticed, when I lived on West 49th Street, how street-paving frequency (<i>e.g.</i> paving a road right before putting in a water main then re-paving it right before installing Citi bikes then re-paving right before making a change to the water main...) ticked up in election years.<p>[1] <a href="http:&#x2F;&#x2F;www.crainsnewyork.com&#x2F;article&#x2F;20160515&#x2F;REAL_ESTATE&#x2F;160519910&#x2F;why-is-this-little-construction-crane-illegal-in-new-york-city" rel="nofollow">http:&#x2F;&#x2F;www.crainsnewyork.com&#x2F;article&#x2F;20160515&#x2F;REAL_ESTATE&#x2F;16...</a>
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padobsonabout 9 years ago
I find it worrisome that the author starts from a place of advocating borrowing to support building more infrastructure. I was pleased, at least, to see that he seemed to believe that infrastructure funds needed to be invested prudently.<p>I don&#x27;t have a lot of faith in the levels of governments to choose the right projects. The infrastructure rot we&#x27;re seeing right now seems to be a result of the fact that economic growth is not what it was when everything was built in the first place.<p>I think it&#x27;s clear the stuff that was built in the 50s, 60s, and 70s was not sustainable outside of 6% GDP growth, and what we need now is sustainable infrastructure initiatives, rather than trying to bandaid the stuff we can&#x27;t afford anymore.
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zevebabout 9 years ago
I think this is similar to the issue that Americans tend to pay relatively high taxes and get relatively little in return, compared to citizens of other countries. I don&#x27;t know to what extent this is a result of a few folks gaming the system to their own advantage (e.g. by paying very little taxes on a lot), or to the fact that by and large America is responsible for the security and peace of the global (and hence other states need not spend as much on global issues), or to the extent that American civil service appears from the outside to be very much a handout to people who can&#x27;t get honest employment, or to the extent that government contractors are experts in milking tax dollars, or what.<p>It completely doesn&#x27;t surprise me that we spend more on less infrastructure.
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bluedinoabout 9 years ago
I&#x27;m always amazed when there&#x27;s a story about road construction in the local news, and it costs like 1.5 million dollars to repave 4 blocks of some street..how is that possible?<p>I had a friend have his average-sized driveway re-done with cement and it was like $60,000 which I thought was insane. Remove old cement, grade the dirt, pour new cement, smooth it out...and wait.
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jbob2000about 9 years ago
Well that was disappointing. I thought he was on to something regarding projects being difficult to complete because of the common law system. But nope, it&#x27;s the unions! Please...
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mschuster91about 9 years ago
It&#x27;s not just the US that is expensive and riddled with cost explosions. This seems to be a failure of pretty much every political system - for example, Germany, where construction costs explode (BER, Stuttgart 21, Hamburg Opera House).<p>The most common cause why costs have exploded is that, unlike &quot;old times&quot;, where either the state itself has employed all kinds of construction planners and workers or awarded a specific company all construction projects in a given timeframe, now everything has to be available for bidding - usually the lowest bid recieves the contract. This, in turn, creates incentives (often lined with kickbacks for the responsible politicians!) for the construction companies to underestimate the bids and charging the government for each and every change to the contract, to cut corners and generally mismanage the projects.<p>Also, in the EU, projects above a certain threshold have to be advertised in the entire EU - leading to projects with little to no &quot;native&quot; people employed on site, and regular language problems and misunderstandings due to different legal requirements in the EU states (e.g. training of the work force, different specifications - what may very well be an acceptable project under Polish regulations is totally unacceptable by German standards).<p>Furthermore, regulatory oversight has been on a massive decline as competent people leave or don&#x27;t even enter state service, so that too few people in government employment are available to properly assess and control construction process.
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transfireabout 9 years ago
Trickle-down contracting -- the many guys on top rake in big $$$, while the guy on the bottom who actually builds the thing gets a few cents.
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MicroBertoabout 9 years ago
In general, we <i>do</i> make the worst deals. I know this place hates Trump, but that statement is not false.<p>The major issue of having a business-driven economy is that the best (or most &quot;tactical&quot;) businessmen are running businesses, not the government.<p>As it stands right now, there is very little incentive for US government officials to run things efficiently. Whether they&#x27;re promoted for incompetence, applauded for employing so many government employees, or getting paid by dirty contractors, it all leads towards the corrupt situation at hand.<p>I don&#x27;t know the solution, but true campaign finance reform, removing corporate money from politics, would be the best blanket to start with. Good luck with all that, though...<p>Take a look at how Hong Kong&#x27;s rail system operates, that&#x27;s the best model I&#x27;ve seen.
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exeliusabout 9 years ago
It&#x27;s simple: there is so much money in our political system (and there always has been) that unless you&#x27;re donating to a candidate &#x2F; party machine, your pet projects don&#x27;t get done. This means a lot of things that matter to average citizens like roads, schools, parks, etc. don&#x27;t have anyone championing them -- unless there are investors who want to build up the area and want to externalize some of their costs.<p>So they make a small investment in getting some friendly candidates elected to city council or smaller county positions to ensure the access to the various groups they need to lobby to get their projects approved. In return for this investment, they get 100x in public money.<p>What it also means is that unless your project (or collective projects as often the case in gentrifying neighborhoods) promises a big return, it&#x27;s not gonna get done. What&#x27;s more is that so much of our infrastructure is so old and in such poor condition that it&#x27;s often cheaper to just build new stuff in another area than it is to rip out what&#x27;s already there and replace it. In Philadelphia where I live, large parts of our water and sewer infrastructure date back to the early 1800s.
scotty79about 9 years ago
Usually question &quot;Why X is so expensive in US?&quot; can be answered with &quot;Because such and such for-profit entity wedged itself between buyer and a seller and siphoned so much money that can buy off politicians that in other circumstances would kick it out.&quot;<p>I guess case with infrastructure is more complex.
baron816about 9 years ago
One thing people don&#x27;t realize is that Union affiliation is actually still quite high in New York state--25%, and probably higher in the NYC area.<p>New York YIMBY address the topic two years ago: <a href="http:&#x2F;&#x2F;newyorkyimby.com&#x2F;2014&#x2F;09&#x2F;the-mta-wants-second-avenue-subway-downpayment-but-cant-tell-us-how-much-itll-cost.html" rel="nofollow">http:&#x2F;&#x2F;newyorkyimby.com&#x2F;2014&#x2F;09&#x2F;the-mta-wants-second-avenue-...</a><p>In it, they cite union rules that require <i>four times</i> the necessary personnel on underground construction projects. They don&#x27;t blame it all on unions, but I&#x27;m definitely in the camp that unions do much more harm than good.
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ChemicalWarfareabout 9 years ago
With things like subway stations it&#x27;s not easy to compare the cost because more &#x27;extravagant&#x27; design will drive the cost up.<p>Apples and apples type comparison would be comparing things like cost of building one mile of the highway.<p>If you look at those figures they are very comparable with US having a slight edge over the EU - $6-10 mil per mile vs. €7-12 mil per km.
saosebastiaoabout 9 years ago
This is a serious issue, and I think the author does a disservice to it by focusing on unions as the problem. At their very worst, they are only a problem for operations costs, which rarely explain why infrastructure doesn&#x27;t get built. It is true that public service unions do have disproportionate political power, but they are also rarely the ones building the infrastructure, because construction is always up for bid by private contractors. And even if public unions <i>were</i> building these things, labor typically only accounts for 20-30% of construction costs, so they couldn&#x27;t possibly account for much of the 2-5x increase in costs compared to Spain or France.<p>The real issues at hand are bad planning, extravagant station designs, nominally-environmental NIMBY blockades, and plain old backwards procurement rules that affect all levels of US government. Alon Levy might claim that he doesn&#x27;t know the answers, but I&#x27;ve been following his blog since he started it and it makes it pretty clear how those things contribute. Hell, the extravagance of the stations alone probably account for 30% of the difference in costs. Nobody seems to blink an eye at massive underground stations with huge art installations and expensive tile facades...yet they end up costing 10-20x more than basic stations that serve their purpose just fine.<p>This is a severe problem for how much we build too. Those on the left like to blame blame conservatives for not wanting to build transit infrastructure, but one of the most conservative regions in the country serves as a counter-example: the Salt Lake Valley. Sure, SLC itself is slightly blue, but step outside the city itself by a mile and you&#x27;re in some of the reddest land you&#x27;ll find in the US. And yet those outlying conservative areas have been throwing their votes and money at UTA to build more and more. And if you look at what they&#x27;re voting on, it starts to make sense. They are building a very low cost, utilitarian, at-grade light rail line. They are optimizing signal priority and grade protection so they can get about 90% of the speed that a subway would give. Their stations are nothing more than simple concrete platforms. Simply put, they are getting a ton of transit for their money.<p>Compare that with Seattle, one of the most liberal cities in the US. We&#x27;re likely going to see a new transit initiative soon, and it is going to be voted down just like every other transit initiative in Seattle since the 50s. It&#x27;s gotten so bad than transit activists are worried that they won&#x27;t even have majority support within Seattle city limits. Gee, maybe the fact that it is going to cost $50B and take 40 years to build has something to do with it. I&#x27;m fairly liberal and inclined to vote for transit in general, but I just can&#x27;t justify paying hugely increased taxes for 40 years so I can finally have a subway stop in my neighborhood once I retire.
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maxericksonabout 9 years ago
I wonder how much of it goes back to the attitudes of decision makers.<p>A theme of this essay[1] is that decisions makers will outright reject ideas they are uncomfortable with.<p>So say someone believes that businesses in the aggregate will, say, do the right thing rather than mercilessly and rationally responding to maximize their benefit from a contract. It&#x27;s going to potentially be difficult to convince that person that the structure of bidding and contracts is important.<p>I agree that this is seemingly absurd and terrifying.<p>[1] <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=11577074" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=11577074</a>
Symmetryabout 9 years ago
Generally people buy more of things that cost less per unit and I expect this would apply to track miles just as much as it applies to , e.g., video games.
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PantaloonFlamesabout 9 years ago
If only we had more unions, and.... the unions seem to be presenting obstacles to getting projects done.<p>Which is it?
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redthrowawayabout 9 years ago
I thought the reason NYC cost so much to build subways in was because it&#x27;s all granite bedrock, which is expensive to tunnel through, and there&#x27;s a ton of spottily-documented crap already down there.
gvbabout 9 years ago
We need a corollary to Betteridge&#x27;s law: newspaper headlines that start with &quot;Why...&quot; do not answer the question.
zarothabout 9 years ago
Perhaps the NYC subway is a special case in the cost-per-kilometer club but how about something more run-of-the-mill like the MA green line extension [0] which is $2-$3B for 4.3 miles of above ground track? [1]<p>They recently had to go back and try to slash the budget since the Fed and State have pledged $1B each and no more. Some of the reasons given for rthe explosion from $2N -&gt; $3B were poor oversight over the bidding process [2].<p>To cut cost they scaled back the station designs (apparently people were complaining after some stations became little more than a platform without even shelter from the weather), kept some bridges they originally planned to replace, and shortened a walk&#x2F;bike path.<p>Nowhere in the news do I see anyone talking about labor rates, unions, health insurance &#x2F; pension, or eminent domain issues causing the cost overruns.<p>I&#x27;ve been on the board of a small condo (27 units) which did a major residing project a few years ago. The process of spec&#x27;ing, bidding, overseeing the construction was hugely involved for the huge for us but relatively tiny project. The contractor bids, which were against a very detailed 3rd party specification, had a huge spread. During the project there were significant work items which were outside the spec and ended up being negotiated to control costs. The takeaway for me is that these projects are insanely complicated and cities just don&#x27;t have the expertise and dedication to tightly manage them and wring out the cost savings. The experts outmaneuver the municipality and we end up paying far too much.<p>What&#x27;s interesting about the Green Line Extension is the nature of the funding means the first $2B is almost like free funny money but every dollar thereafter is like spilling blood because it comes from the locals. So at least the funding structure is trying to impose some limits. And lo-and-behold if the choice is for a city to cough up the extra cash versus cutting costs, they cut the cost by 1&#x2F;3rd.<p>I think the biggest problem is cultural. The people overseeing the project are not spending every dollar like it&#x27;s their own. If the cost isn&#x27;t &quot;real&quot; to the people running the project, it completely changes how the project is run. Human nature.<p>[0] - <a href="http:&#x2F;&#x2F;greenlineextension.eot.state.ma.us&#x2F;docs_about.html" rel="nofollow">http:&#x2F;&#x2F;greenlineextension.eot.state.ma.us&#x2F;docs_about.html</a><p>[1] - <a href="https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Green_Line_Extension" rel="nofollow">https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Green_Line_Extension</a><p>[2] - <a href="http:&#x2F;&#x2F;www.boston.com&#x2F;news&#x2F;local-news&#x2F;2016&#x2F;01&#x2F;15&#x2F;report-green-line-extension-budget-issues-brewed-long-before-crisis" rel="nofollow">http:&#x2F;&#x2F;www.boston.com&#x2F;news&#x2F;local-news&#x2F;2016&#x2F;01&#x2F;15&#x2F;report-gree...</a>
excaliburabout 9 years ago
Red tape.
jcofflandabout 9 years ago
&gt; New York’s Metropolitan Transit Authority operates commuter trains that require higher staffing levels -- but as Smith wrote in another 2012 Bloomberg View piece, those higher staffing requirements are the result more of union rules than of necessity.<p>This is also true for construction. Anyone who&#x27;s seen construction in progress in the US knows that there are usually 5 guys standing around for every one working. Everyone one of them is getting health care, a pension and a decent salary if they are standing around or not. And they are getting the best health care and pensions of just about any group in the US.
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JacobJansabout 9 years ago
This article seems quite specific at first – but when you dig down, it is actually rather vague.<p>For example, the author complains that his mother needs a license to bake food. What kind of license? What state?<p>Maybe a food handlers license? These are incredibly common, and very easy to obtain.<p>Maybe a business license? Again – most states are falling over themselves to make it easy to give you a business license.<p>It&#x27;s hard to tell exactly what is being argued against.<p>Food safety is incredibly important – and food handler&#x27;s licenses are easy to obtain. States need to collect taxes, that&#x27;s the basic reason a business needs to get a license. Neither of these things are controversial. That&#x27;s why I&#x27;m guessing the author of this article didn&#x27;t go into specifics.
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kolapuriyaabout 9 years ago
I found Node.js a much simpler platform to use, mainly because there is no worrying about concurrency.<p>Because of the asynchronicity of Node, don&#x27;t you explicitly have to worry about concurrency issues? I understand that with callbacks you can make things essentially linear from an execution standpoint (per connection), but I guess I&#x27;m a little confused by this statement.
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