Friday, August 22, 2014

Infrastructure innovations

Recently Matthew Yglesias took a survey of transit construction projects around the globe and found that construction costs in the US are extremely high.

The case for doing more is in fact strong. But it would be much stronger if the United States knew how to undertake cost-effective projects.

In a way, the US has a problem with transit construction productivity.  New York City's 1900 subway system cost 35 million dollars.  In today's money that comes to 941 million dollars.  The total length was approximately 20 miles.  The cost per track mile was therefore about 47 million dollars a mile in 2014 dollars.  Compare that to today's Second Avenue line, which is planned to build 8.5 miles of subway and looking at a cost of 4.5 billion dollars.  That totals 529 million dollars a mile.  Thus the cost of construction increased 482 million dollars a mile.  More than 1,000% increase in costs.

Consider that since 1900 construction has been aided with the following innovations:  diesel engines, laser guided drills, computer automation, and GPS for starters.  Labor saving devices and productivity increases should have, in theory, reduced prices.  For all the technical advances in surveying, planning, and building; costs have skyrocketed.

It is clear that in America there is no need for innovative financing for transit projects.  Instead what is needed is innovative planning and construction that cuts costs significantly.  If cities like Chicago wish to be globally competitive, they need to adopt construction practices that brings costs down to a level comparable with European cities.