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For all the attention paid to the question of whether it’s wise for California to spend $68 billion on a high speed rail line from San Francisco to Los Angeles, a bigger question is being ignored. That question is how come it costs so much money? In contrast, China just completed a high speed rail line from Beijing to Shanghai, a comparable distance for about half the price. While it may seem reasonable for similar projects in China, a country with lower labor and environmental standards than the US, to be less expensive, the difference in the project isn’t just the price. Whereas the San Francisco to Los Angeles line is currently expected to be completed by 2028, the Chinese project took only three years. And it isn’t just China where these projects are cheaper.
In New York, construction is finally started on the long anticipated Second Avenue Subway, which has been planned since before the Great Depression. Right now, only a mile and a half of the line is being built at the cost of a billion dollars a stop. Should the entire planned line be built, running from the Financial District to 125th street, it is estimated to cost $22-24 billion.
Incidentally, this is the same cost as the Crossrail project currently being built in London. The only difference is that Crossrail, involves digging 26 miles of tunnels under London. In contrast, the Second Avenue Subway, which would run a mere 8.5 miles and sections of it have been completed for 40 years. (New York initially started construction in the 1970s before running out of money when the city almost went bankrupt in 1975).
Undertaking complex infrastructure projects is expensive but it shouldn’t be this expensive. There are good reasons why major transportation projects in the US should cost more than they do in China but there are no good reasons why tunneling in London provides a far better bargain than tunneling in New York.
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Ron Byers on July 07, 2012 10:25 AM:
Why is construction more expensive in the US than China? Off hand, the price of labor is higher here and the Chinese don't always build to the highest building standards.
What we should be doing is deciding whether any infrastructure project is worth the cost over the life of the project. When making that decision we need to factor in what the society will pay without the improvement. That isn't hard to do, but most politicians don't want to say that the train from point a to point b will save x billions, mostly in energy and environment, saved over the life of the project.
N.Wells on July 07, 2012 10:30 AM:
London is over soft sedimentary rock ("London clay"), while New York is on hard metamorphic rock, which will seriously affect tunneling costs. Nonetheless, that won't explain the entire discrepancy, and is only relevant to the London - New York comparison.
DAY on July 07, 2012 10:42 AM:
In other parts of the world commerce is speeded along with "baksheesh", AKA, bribery.
Since that is "illegal" here in the Land of the Free, it takes longer and costs more to buy construction permits, union labor, and politicians.
Like "Tax", "Fee" or "Penalty" the same thing takes on whatever name serves its purpose.
c u n d gulag on July 07, 2012 10:46 AM:
Some of it is the sheer size of a particular project.
NYC is also building another water tunnel from upstate. The current two are over a century old. And this one's not expected to be finished for a long, long time.
The tunnel needs to handle a lot of water securely, and most of it has to be bored through hard rock and mountains.
I'm also sure there's some Crony-Care for the politicians pals built into every project all around the world - with kickbacks as part of that deal.
golack on July 07, 2012 11:14 AM:
Time. Budgets. And really hard rock.
Most major projects in the US have nearly endless delays. Need an extra 100 million to cover a budget shortfall? Delay the big project--it's not like it's going to get done next year...
We don't like environmental reviews, so cut those agencies budgets--one way to create a backlog. Of course supporters tend to delay finalizing plans until the last minute--and wait longer to submit them for review--then blame the review process for taking forever.
We can always change the plans. New person elected--no problem at all to re-route the project. Might as well add that new park, off-ramp, etc.--they really don't cost that much more...
But it wasn't supposed to affect me! We'll have to sue to stop it--fill in reason later (typically Environmental Impact--and odds are those were glossed over initially, so there will always be grounds for any environment impact lawsuit)
Boston's big dig is a case study. It went from how to do things right--putting the tunnel in the big city with minor disruption--to huge cost overruns and cement panels crushing motorists (since fixed).
zandru on July 07, 2012 11:29 AM:
Let's Not Forget Worker Safety
Not a big thing in China, but in the US an employer is required to provide a safe workplace and/or personal protective equipment. We have the expectation that we will return from work at the end of the day alive - not killed, maimed, poisoned, etc.
Worker safety is a really big deal in construction projects. Hazards include working amongst huge dangerous machines; being exposed to dangerous levels of dust, exhaust fumes, hazardous chemicals, anoxic atmospheres (a really big concern in excavations); working at high elevations where one can fall or in deep holes where the sides can cave in or toxic gases silently accumulate to lethal levels; noise levels leading to partial or complete deafness - well, you name it.
Back in the 1800s and early 1900s, employers didn't care; you could always find foolish or desperate young men who would risk their lives and health for a few bucks. So projects were a lot cheaper to run, and the social cost of the dead and maimed was passed on to the victims and their dependents.
While there is no doubt waste and graft and featherbedding in big construction contracts, and it needs to be reduced, don't go throwing worker protection out the window, as they seem to do in China.
tsts on July 07, 2012 12:04 PM:
"China just completed a high speed rail line from Beijing to Shanghai, a comparable distance for about half the price."
No. SF to LA is 380 miles, BJ to SH is 760 miles. Factor of two difference. Now, the line in CA is actually projected to be 520 miles, not 380, while BJ-SH is 820 miles, but that is at least partially a choice.
Anyway, comparing to China does not make that much sense. But comparing to other industrialized nations does. And while there are various reasons why an individual project in one place might cost more than in another (e.g., tunneling costs), it does seem that US costs are mostly higher than in other places. Something is broken here.
Tigershark on July 07, 2012 12:17 PM:
Sarcasm alert.
The reason things take so longs is because of rich people and their lawyers. In Los Angeles they are trying to complete the "Subway to the Sea" from downtown to Santa Monica. The City of Beverly Hills, and the Beverly Hills School District are suing because the proposed route would tunnel under BHHS, subjecting the students to risks of explosions or terrorist attack.
PeakVT on July 07, 2012 12:18 PM:
There are a number of reasons for the added expense vs. other western country, but the two most prominent are: 1) intermittent, uncertain, and inadequate (on an annual basis) funding; and 2) insufficient learning-by-doing in the supervising agencies. 1) A project is designed and then a budget is projected, but often the annual funding isn't enough to complete the project in the original time expected, which increases costs. And since it is rare that a project is fully funded at the outset, contingencies have to be built in on the chance funding doesn't come through in future years. 2) The agency undertaking a transit project most likely hasn't done one in decades, so it has little experience in keeping a project rolling and contractors in check. A lot of the design and oversight is outsourced to the prime contractor or to yet another contractor, which again increases costs. Even if a similar project was done elsewhere in the country the expertise doesn't easily transfer between state and/or local agencies.
grpbyr on July 07, 2012 12:27 PM:
Let's add health care to the list of differences between London and NY...there financed through the government; here financed through the construction project budget. This skews the cost of upgrading and extending our infrastructure. And where's the sense in that?
JustBeingPedantic on July 07, 2012 12:32 PM:
@c u n d gulag: The third water tunnel in New York has been under construction for more than 40 years. It's as much as 800 feet deep in places and includes a 600-foot-long valve chamber beneath Van Cortlandt Park (just about the same size as a typical subway station, though deeper underground at 250 feet). It's scheduled to be completed in 2020.
Anonymous on July 07, 2012 1:09 PM:
I think it's ridiculous to pluck construction projects out out of the air and decide that since one costs A and another "apparently similar" one costs B, something is "going on".
Terrain, sub-terrain, fault zones, weather, easements, eminent domain, engineering complexity, etc are all just too different from one project to the next to conclude from bloggerville that something's amiss.
Sebastian James on July 07, 2012 1:30 PM:
I agree. China isn't the best model of bureaucratic efficiency. It will get done, but will it work properly 3 years from now? What shortcuts were taken?
Unless you're willing to find a few metrics that get closer to the heart of the argument, the story sounds better than it actually is.
schtick on July 07, 2012 1:56 PM:
I'd hate to say money or politics has anything to do with it, (HA!), but with a few bridges to nowhere and railroads built subsidized by the government from day one knowing they would never turn a profit, I'm surprised it doesn't cost more to build anything here.
Then again, when we decided to show Iraq how great our democracy was, I still can't get over the fact contracts to rebuild Iraq were given to American companies over Iraq when the cost of rebuilding were ten times higher using American companies.
Of course, we ARE the greatest country in the world and number one in everything like education, healthcare, and infrastructure. Oops! We're not? Silly me.
exlibra on July 07, 2012 2:21 PM:
Currently, China isn't the best place for comparisons. Somehow, whenever I hear "China" and "train" put together, the result is "derail"; not something I'd want to see here. And, here, you can't just clap the families of victims in jail, to shut them up.
"power tnhorse". Maybe. After nearly 8 days without power, I do feel like it's being managed by a horse. Or, at least, the rear part of it.
b on July 07, 2012 3:36 PM:
Something to consider about the California High Speed Rail line is that it's' plowing through some of the density, high value residential land in the country. Eminent Domain doesn't mean you get the land for free, you still have to pay market value for it. That's a lot of high priced land. And there will be a lot of law suits to prevent land seizures or to get a better price for the land.
The other thing is that the line is going to be close to fault lines the whole way from LA to SF, so the track is going to have to be earthquake tolerant. That's got to kick up the price a lot right there.
Bill D. on July 07, 2012 3:51 PM:
@b, actually it will not be close to fault lines when it's in the Central Valley which is most of the route.
heckblazer on July 07, 2012 6:33 PM:
The speed in which they do things in China means they sometimes screw-up. Like, say, by building a $260 million cruise ship terminal past a bridge than many cruise ships can't clear.
http://www.npr.org/templates/story/story.php?storyId=96510518
superdestroyer on July 07, 2012 6:53 PM:
The federal government in the 1970's and onward has decide that it is good to make things expensives, multiple environmental rules, adding potential roads that can be used by activist, contracting rules, bidding rules, and constant change orders. How do you plan for a complex project that will be built years from now when no one knows what the level of technology will be in 20-40 years.
TCinLA on July 07, 2012 7:09 PM:
The California high speed rail is not from San Francisco to Los Angeles, a project that would make too much sense for any politician in Sacramento to support. It's going from Manteca to Bakersfield. I am sure the 20 people a day who will use it when finished will thank the rest of us for our largesse.
howard on July 07, 2012 7:14 PM:
the comments to date have covered most of the ground; i'd say the only one missing is the high cost of nimby-ism, which is manifested in lawsuits, less-than-optimal routing and other cost-inducing delays.
memos ten on July 07, 2012 7:28 PM:
Anonymous at 1:09 PM has it exactly right. I worked for over 20 years in the freeway planning, design, construction and operations business. Suggesting a transportation project in China should cost about the same as one in California due to some similarities of length is like suggesting a Yugo should cost the same as a Lexus. (you know they've both got four wheels and an engine!).
The huge differences affecting costs are too numerous to mention here, though others have touched on a few of them. Any public works project of this magnitude needs to be scrutinized on its own.
Bob M on July 07, 2012 11:15 PM:
The wonderful 1% play a destructive hand more times than not, methinks. Look at the past with the railroads. Now, Canada, for example, is trying to build another (much needed) bridge to the US through a Detroit suburb but is being held up by the billionaire owner of the existing (out of date) Detroit bridge. Makes me suspicious of that class.
OwenG on July 07, 2012 11:39 PM:
London is underlain by clay and the tube runs in tunnels dug thru
this clay. Manhattan is on rock. Well it is easier to build sky scrapers but harder to build subways.
square1 on July 08, 2012 8:11 AM:
One big problem with this post is that it is comparing rail projects. America doesn't do rail very much or very well. I would expect rail projects to cost less in china or Europe simply because they invest so much more in rail.
jon on July 08, 2012 10:37 AM:
The US doesn't do rail? We do it very well. We just don't move people on our elaborate, highly-efficient system.
Saty13 on July 08, 2012 10:35 PM:
If the U.S. rail system is highly efficient, why don't people use it? Speaking for my area (the Boston to NY to DC corridor), Amtrak service is unreliable and not that much cheaper than air travel.
Or were you talking about moving goods but not people?
paul on July 08, 2012 10:38 PM:
In short, because the jerkwads in charge have decided that we're a poor nation run by a rich oligarchy rather than a rich democracy. In slightly longer: once you start down the road of "saving" money by spending less per year on it, everything goes to sh*t. Total prices go up, crucial expertise gets lost along the way, the banks get to skim off a billion or three while they hold custody of bond proceeds... And meanwhile there's the evisceration of manfacturing and heavy engineering: even if we actually wanted to build all these projects at a sensible rate, it's not clear that we have the local engineering and construction base to do it any more.
(Oh, and one other nit to pick on the china comparison: that three years is pretty clearly a figure furnished by the chinese government and almost certainly includes only shovels-on-the-ground construction time, not planning, contracting, long-lead acquisition, or right-of-way clearance. On most big projects, construction is the least of the items on the schedule.)
Spring Texan on July 09, 2012 11:17 AM:
Amen, Paul. We've decided on decline and we've gotten it.
Spring Texan on July 09, 2012 11:19 AM:
It may be a little unfair to say "we" decided on decline. Clinton ran on infrastructure repair and people voted for him, then he didn't do it. Same for Obama.
Obama's still talking about it and the amounts proposed are so piddly as to be laughable.
So I'll correct myself to say "our leaders have decided on decline and we have gotten it."