High-speed rail cost increase latest in public works projects 

Overpromising and underdelivering have become the hallmark of California’s public works projects, and the latest plan to engage in this dubious practice is the state’s high-speed rail system.

Originally estimated to cost $25 billion, the price tag for high-speed rail has now swelled to $98 billion, an explosion that has been assailed by critics and generated calls for the plan to be abandoned. Making that projection even more worrisome is that the original $25 billion estimate entailed the entire high-speed rail route from San Diego to Sacramento, while the newly revised $98 billion projection only details the costs from San Francisco to Anaheim.

Click on the photo to the right to see photos from projects with cost overruns.

The final tally of the state’s high-speed rail project will go well past $100 billion.

Still, the story of high-speed rail is little different than the wildly vacillating cost estimates that have plagued other major projects.

When the BART system was finally completed in the early 1970s, the total cost of the project was $1.6 billion — $624 million more than originally projected. BART’s project was so disappointing that it constitutes a chapter in Peter Hall’s 1980 book, “Great Planning Disasters.” It’s not alone.

The rebuild of the Bay Bridge’s eastern span will cost $6.3 billion — more than four times the original projection of $1.5 billion, and more than 30 times an earlier $200 million estimate to retrofit the span.

When the idea to connect Marin and San Francisco counties was first developed, the public was told that a bridge would cost $17 million. The Golden Gate Bridge ended up costing $35 million to complete.

The BART extension to San Francisco International Airport, Muni’s Central Subway and T-Third Street expansion plans, and the Santa Clara Valley Transportation Agency’s light-rail system are just some of many examples of public works projects that exceeded their original price tags.

According to a report by Caltrans, the state’s transportation department, a public works project with a value of more than $100 million is likely to have cost overruns ranging from 40 percent  to 60 percent.

Rod Diridon, executive director of the Mineta Transportation Institute and former member of the California High-Speed Rail Authority, said there are a number of reasons that contribute to this scenario.

Federal mandates require that project backers release a cost estimate at the end of a plan’s concept study — a very rough sketch that often changes greatly as the undertaking is developed.

As details emerge, the public often demands changes to the plan’s design, fearful that the project will interfere with their daily lives. That forces engineers and architects to come back with costlier versions of the original project.

Redesigns create delays, which further drive up the overall cost of the project.

“I compare public works projects to those hurricane forecasts that have these ‘cones of uncertainty’ where damage may be felt,” said Tom Radulovich, a BART board member. “Well, the further a project is from being completed, the bigger its ‘cone of uncertainty’ is.”

John Knox White, a program director at TransForm, a regional transit advocacy group, said policymakers become enamored with an idea for a project, and then put the rosiest possible projections before the public to garner support for the plan.

“If there is an idea, no one wants to overestimate the cost, because the more expensive it becomes, the less likely there will be support,” Knox White said.

Golden Gate Bridge a historic example of cost overrun

Although it’s routinely lauded as one of the world’s most notable engineering feats, the Golden Gate Bridge is also a prime example of how the price tag of a public works project can increase exponentially as it becomes more fully developed.

In 1921, engineer Joseph Strauss announced plans to build a symmetrical cantilever bridge connecting Marin and San Francisco counties. He said the span could be built for $17 million, but the design of the unseemly bridge was unimpressive to many Bay Area residents.

“It was ugly, no doubt,” said bridge spokeswoman Mary Currie.

Strauss refined the idea over the next decade, and in 1929, he came back with an idea to build a suspension bridge for $27 million, a 58 percent increase from the original cost. However, various administrative expenses — from engineering and inspection fees to financing charges — increased the final cost of the bridge to $35 million, which was paid for by a state bond measure approved by voters in 1930.

In a decade, the cost of the bridge increased by 105 percent — from $17 million to $35 million.


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Will Reisman

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