Why U.S. Infrastructure Costs So Much

http://www.bloomberg.com/view/articles/2016-04-08/why-u-s-infrastructure-costs-so-much

by mtviewdave • 10 years ago

145 219 10 years ago

Symmetry2• 10 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.

saalweachter• 10 years ago

It depends heavily on the product.

Video games cost a certain amount to produce and then $0.25 to copy.

A track requires a certain amount of iron or other raw materials; these raw materials are already being produced at scale. A certain amount of economy-of-scale can be gained on the track-specific overhead (amortize the cost of the track-factory, amortize the management/sales overhead) but there is a certain floor on the minimum cost for a unit of track, and that floor is much higher (relative to its base cost) than the cost of a video game.

Symmetry2• 10 years ago

All the facts you bring up are true but it doesn't make supply and demand less applicable to public works projects.

Recently the Green Line Extension near me was partially abandoned because estimated costs to complete it had gone up from $2 billion to $3 billion. If the project had a reasonable (by international standards) price tag there's no way it would have been canceled even if the overrun had been 100%.

jbob20002• 10 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's the unions! Please...

sickbeard• 10 years ago

This trend of clickbaity titles with no actual content needs to stop.

SCAQTony• 10 years ago

The author even back-peddled on the unions argument bringing up French unions as example.

"...Others have argued that labor laws governing infrastructure projects drive up costs. Gordon and Schleicher are dubious of that as an explanation for why the U.S. has higher costs than other countries, though, because “American laws would have to be tougher than those in Europe, where trade unions are much more powerful. (France, anyone?)” ..."

gaius2• 10 years ago

The local culture makes French and German unions very different from US and UK unions. The former are wise enough not to kill the golden goose, the latter can't see any further than Christmas.

ams6110• 10 years ago

I thought overuse of consultants and overdesign made more sense.

HCIdivision176• 10 years ago

I thought it was at least going to be something interesting about US infrastructure, but it's really focused on NYC. Unsurprisingly, the US does not place getting costs down for subways to be one of its higher priorities. Anecdata, admittedly, but I've seen very little talk about controlling union costs for MTA workers in the rural midwest; those poor guys are supporting a subway system that's barely there!

Really, though, infrastructure stuff is neat, and we probably should start fixing it up. The main problem is the size of the US infrastructure is outstandingly staggering. There's an article [0] that's an argument for pouring money back into the highway funds (and the like), and the cash involved is worse than astronomical. At the very least, I didn't know there were over 600000 bridges in the US... I honestly don't know where we put them all. (Are overpasses included?)

[0] http://www.budget.senate.gov/democratic/public/index.cfm/rep... I don't go to senate.gov much, so I'm guessing this is pretty partisan, but there's a crapton of followup links that are at least interesting.

jbob20002• 10 years ago

On that note about bridges; When I was in Cuba, the tour guide made a special note to point out this bridge they had that connected one part of the island to another over a large valley. Apparently it was a big deal to get this bridge built? The Russians built it for them in the 80s, but before that, it was a nightmare moving around. It didn't look like much to me, a regular bridge that I've seen a thousand times here in Canada.

It put in perspective for me how expensive bridges really are. They couldn't afford to build one, crucial bridge. It took a major super power to do it.

bradleyjg3• 10 years ago

What's the total population of the rural Midwest?

cauterized2• 10 years ago

Given how much more NYC pays in taxes than it gets back from the federal gov't and how much less many midwestern states pay than they get back (and how much more the latter tends to be the case for rural areas), it seems pretty unlikely that rural midwesterners are subsidizing the NYC subway.

wpietri• 10 years ago

I was disappointed that planning methods didn't come into it. US business and civil culture has shifted heavily to very plan-oriented approaches. But there are other ways to do things.

As Mary Poppendieck explains, the Empire State Building was built on schedule and under budget in 18 months. When they started work on the bottom floors, they hadn't even finished designing the top floors. But that was fine, because they were working in a flow-oriented approach:

https://chrisgagne.com/1255/mary-poppendiecks-the-tyranny-of...

(It's also covered in one of her books, and I think it's "Leading Lean Software Development".)

As we know with software, big up-front design approaches can get unnecessarily long, confusing, and expensive. (See, for example, the healthcare.gov fiasco.) But we also know that approaches that optimize for cost- and time-effectiveness can work much better. (See, for example, Lean Startup methods or the healthcare.gov rescue.) We haven't really learned the lesson in software yet, so I can't blame people for not rediscovering it in other spaces yet. But I hope one day they will!

bluedino2• 10 years ago

I'm always amazed when there'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?

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.

jschwartzi• 10 years ago

On a road they typically have an underlayment that has to be packed to withstand trucking. There are usually also new street lights, and sidewalks. In my area they plant trees either in the median or between the sidewalk and the road.

When you factor in the cost of those changes, 1.5 million seems reasonable for roughly a mile of road.

dhd415• 10 years ago

Where was your friend located? I've had my 40'x20' driveway re-done (old one torn out and recycled and a new one formed and poured) for 1/10 of that price in Texas.

hrktb• 10 years ago

So from your friend's driveway to 4 blocks of streets it only costs 25 times more ?

Taking into account that public roads are not just random cement but usually a special mix for durability, sound properties and water resistance, and then you have all the cables and tubes going under that might need to be taken care of when removing the current layer and putting back the new one. All of this has to be done on public property by qualified staff.

Overall a 25x increase in cost seems pretty fair from an external point of view.

PantaloonFlames2• 10 years ago

All of this has to be done on public property by qualified staff.

With safety measures erected for the public, traffic direction, signaling, etc.

HCIdivision176• 10 years ago

You might need to be amazed at the savings at scale. The land area covered by a few city blocks of road compared to a driveway is pretty large. The $1.5M is likely a pretty good buy.

Napkin calc: assuming a driveway that's 20 feet wide and 30 feet long, the area will be 600 feet^2. The typical residential road's going to be something like 30 feet wide (enough for a parked car and two opposing lanes with comfort) and a guess at a block being like 1/20 of a mile, or 250 feet; that gives each city block of road about 7500 feet^2. So guessing conservatively, about one city block is probably at least 10 times larger than the driveway.

And that's before the actual road complexity. A city road also likely has to account for sewage, powerlines, telecom cables, drainage, etc. There's also a trade-off in road design: your friend likely never wants to build his driveway again, so he'll want something permanent like cement. But the city may want to make different trade-off; blacktop can be more easily maintained and expanded and upgraded than pavement, but also costs more in the long run (but pavement is more expensive up front).

XorNot• 10 years ago

Also account for time - you absolutely can't close down the entire city block, so all the major construction tends to have to be scheduled at night.

dclowd99012• 10 years ago

By your own explanation, it should cost maximum $600,000, especially since a well trained crew could leverage their skill at scale. But this even seems like a lot to me: $60k is an enormous sum to pave 20 feet of driveway. I was looking at having it done and it was closer to $6k so it should be even less to pave 4 blocks.

This issue, to me, is hugely concerning. Why did one mile of the bay bridge cost as much to build as funding NASA for 6 years?

antman• 10 years ago

Repave in Greece costs 10€^m2 including materiald

chadgeidel3• 10 years ago

Finally! Here's where my extensive background in concrete construction pays off! :-D (Seriously though, my father and brother run a concrete construction business and I have worked on both residential and commercial jobs for 10+ years of my "youth")

For starters - $60k is a LOT for a driveway. My brother's company charges $10 per square foot (at the top end) to remove and replace a driveway. This assumes the ground is appropriate (drainage is acceptable, no need for fill, etc.) This is based on 4" of concrete and steel reinforcing mesh and no subgrade prep. As with anything there are "price boosters" but that's a reasonable estimate. Average driveway is maybe 20x40, so that works out to be $8 grand max. This is in suburban South Dakota, so it might be more in larger metro areas.

A highway is nothing like a driveway. As others have pointed out, the thickness of concrete alone is double or triple (probably a minimum of 8 inches - more like 10 inches) and the reinforcement is considerably more (3/4 inch steel rebar mat 16-18 inches on center). You have to also consider that the subgrade needs at least a few inches of gravel, which is fairly expensive. It doesn't stop there - once the concrete is poured, there is typically a curing agent applied on top of the surface, and then the expansion joints have to be sawed and sealed. This is just for the road surface. I'll bet this cost also has to take into account curbing and sidewalks.

I've personally worked on both kinds of jobs - residential driveways and suburban streets. It's at least 10x more work "per foot" to do a road over a driveway. It's the difference between building a weekend "hacker project" and a production ready ecommerce website.

angersock2• 10 years ago

Our highways will probably last centuries if not millenia once cars and trucks stop banging on them. The Romans would be envious.

kinkrtyavimoodh• 10 years ago

As someone who's come from a third-world country to the USA, I have great respect for the quality of roads in America. The fact that we have thousands and thousands of miles of consistently well-paved roads, such that no matter where you are, you can expect the same high construction quality in freeways and city roads is something people here probably take for granted, but it is no trivial matter.

padobson2• 10 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.

I don't have a lot of faith in the levels of governments to choose the right projects. The infrastructure rot we'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.

I think it'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't afford anymore.

mason2402• 10 years ago

We have more than enough tax revenue to fund maintenance and development of infrastructure. It's political prioritization issue, not a funding one.

jessriedel• 10 years ago

The benefits for the infrastructure accrue to citizens in the future, so its sensible to borrow money (at the very low rates that the government can obtain) and pay for the benefits as they are enjoyed. If the additional cost of the interest makes the project not worthwhile, then this means the project shouldn't be undertaken, not that it should be paid for upfront.

padobson2• 10 years ago

Agreed. I won't discount the benefits of infrastructure now, pay later, so long as the infrastructure being built is economically maintainable later.

justavoice• 10 years ago

I think you bring up a good point: the growth of the 50s-70s was an atypical period, large swaths of Europe and Japan were recovering from the after-affects of WWII. That put the US in position to supply the world, and we did. That is no longer the case, and we need to scale our infrastructure expenditures to match our reduced growth.

kolapuriya• 10 years ago

I found Node.js a much simpler platform to use, mainly because there is no worrying about concurrency.

Because of the asynchronicity of Node, don'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'm a little confused by this statement.

gherkin0• 10 years ago

Did you reply to the wrong post?

PantaloonFlames2• 10 years ago

If only we had more unions, and.... the unions seem to be presenting obstacles to getting projects done.

Which is it?

sageikosa4• 10 years ago

Neither. Collectivism of labor is a symptom of centralization of budgets. Large companies and large departments need large workforces.

randyrand2• 10 years ago

Large companies and large departments need large workforces.

yet, google, Apple, Facebook etc all have non-unionized employees.

A large work force does not necessitate a union. What a silly argument to make.

saosebastiao4• 10 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'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 were building these things, labor typically only accounts for 20-30% of construction costs, so they couldn't possibly account for much of the 2-5x increase in costs compared to Spain or France.

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't know the answers, but I'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.

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're in some of the reddest land you'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'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.

Compare that with Seattle, one of the most liberal cities in the US. We'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's gotten so bad than transit activists are worried that they won'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'm fairly liberal and inclined to vote for transit in general, but I just can't justify paying hugely increased taxes for 40 years so I can finally have a subway stop in my neighborhood once I retire.

rayiner• 10 years ago

It's crazy how overdone the new Silver line is in D.C. It rides on a massive raised concrete platform: https://www.google.com/search?biw=1188&bih=726&tbm=isch&sa=1....

This is the rickety sort of elevated track that has held up just fine in Chicago for nearly a century: http://www.chicago-l.org/trains/gallery/images/2400/cta2483.....

tynpeddler• 10 years ago

Doesn't SF have significant earthquake hazards? That would explain the extremely heavy structural design.

maxerickson6• 10 years ago

It seems quite possible that the concrete is cheaper.

basseq• 10 years ago

We don't do much in the way of all-steel construction anymore: it wouldn't surprise me if the "rickety" steel approach would actually cost more than concrete in today's economy.

(Not that I think we'd look to build "rickety" new construction in any case.)

gamblor9564• 10 years ago

The elevated steel tracks have not "held up just fine" in Chicago. They've been neglected for decades, and they recently had to shut down a major line for almost two years just to perform necessary deferred maintenance--essentially, rebuild the line--to keep it go.

mmoche2• 10 years ago

For what it's worth, art does not typically contribute meaningfully to cost. In Boston, a budgeted $2 billion dollar expansion of the Green Line is now projected to cost nearly $3 billion, and the response from the MBTA has been to cut $2 million worth of art installations.[0]

There are plenty of issues, but calling out public art as an example of waste is shortsighted given its minuscule costs.

[0]https://www.bostonglobe.com/metro/2015/11/19/mbta-suddenly-c...

saosebastiao4• 10 years ago

I wasn't trying to call out the art as a significant reason for station expense, but rather like a marker of extravagance. Much like how you can assume that someone wasn't very frugal with their car purchase if they are wearing a Patek Philippe watch.

gamblor9564• 10 years ago

Geography and density matter. It's way easier, and cheaper, to build an at-grade rail line in a low-density metro like SLC than it is to build a rail line of any type in a comparatively high-density/geography-restricted metro like Seattle.

SLC has plenty of available space in which to build it's rail line, Seattle does not. Even before construction costs become a consideration, Seattle's rail line will be more expensive because of the additional cost of acquiring the land (or easements) on which the rail line will be built.

saosebastiao4• 10 years ago

Aquiring land to build for transit projects isn't typically an issue because these projects are either built below ground at a level that doesn't interfere with property rights, or on existing public rights of way. It can matter for stations (and that definitely gets worse the bigger and more extravagant that you build), but not the lines themselves.

JumpCrisscross• 10 years ago

We just had a novel crane/derrick start-up in New York shut down by the reigning tower-crane union [1].

I also noticed, when I lived on West 49th Street, how street-paving frequency (e.g. 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.

[1] http://www.crainsnewyork.com/article/20160515/REAL_ESTATE/16...

whatok• 10 years ago

Crain's story is tragic. Geez.

stcredzero• 10 years ago

how street-paving frequency (e.g. 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

Houston has the same problem. This is a form of corruption.

jcoffland2• 10 years ago

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.

This is also true for construction. Anyone who'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.

Shivetya• 10 years ago

You want a true transit authority horror story go read up on Washington DCs. The unions are not their big issue though they do cost the TA a lot of time and money, its the money games that came about because of years if not decades of mismanagement by government appointees and officials.

https://www.washingtonpost.com/local/trafficandcommuting/met...

and its not just infrastructure. Canada privatized into a non profit entity their air traffic control to good success. We have the TSA running security in airports where if you want timely service it will cost you hours of time and nearly a hundred bucks for membership and even that is not guaranteed. The worst example of how government mismanages everything is sadly still not fixed, the VA

There is just too much up front cost in government projects that weighs down the economy but the real danger is all the deferred costs from maintenance to pensions.

MicroBerto3• 10 years ago

In general, we do make the worst deals. I know this place hates Trump, but that statement is not false.

The major issue of having a business-driven economy is that the best (or most "tactical") businessmen are running businesses, not the government.

As it stands right now, there is very little incentive for US government officials to run things efficiently. Whether they'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.

I don'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...

Take a look at how Hong Kong's rail system operates, that's the best model I've seen.

Bartweiss4• 10 years ago

There's also an argument that a mandate to select the lowest bid massively increases cost overruns, even when everyone in government is sincere and not corrupt.

If you're selecting a crappy company that lied about their bid over a competent, accurate higher bidder, you tend to get massive cost overruns that outweigh the promised savings. Everything looks good up front ("we'll build a new railway for only $XXX,000,000!") but in practice it's a disaster.

MicroBerto3• 10 years ago

That falls under the category of "bad deals" too.

bradleyjg3• 10 years ago

I don'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'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.

The first candidate I'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.

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's exactly what happens. Government contractors play the system like a fiddle and there's little the government negotiators even when they are supremely competent and diligent can do about it.

rtpg2• 10 years ago

I was talking to somebody about how education ends up being so expensive in the US, and I kind of feel like there are similar reasons.

Subcontracting out work + massive federalism creates $200 textbooks. Now I know national textbooks are a bit much, but I would be interested in seeing a state completely co-opt the textbook creation process and produce some textbooks and learning material at cost.

As for the budget distribution, this pretty much happens in other places too. My French school's expansion was half funded by the ministry of industry, some by the region, some by the national government... I think that's a side effect of how budgeting works.

random28345• 10 years ago

Subcontracting out work + massive federalism

I think you meant massive anti-federalism.

If we had a federal procurement system for math and english textbooks, after being put out for a nationwide bid, the per-unit cost would be about 10% over the cost of paper and printing. (the 10% premium is the bid adjustment for a women or minority owned business)

Now $8 textbooks wouldn't save a lot of money compared to the national education budget, but it would be a good start. And do we really need regional variations in math textbooks?

joe_the_user2• 10 years ago

The ultimate cause is regulator capture. A series of large companies extract massive rent through their ability to direct state funds into their coffers.

If the US as it exists now tried a Federal textbook, those would cost $200 again at the very least and would be put together by all the major textbook companies combined (unless one of managed a clever end-run). We see this in military contracting for example.

The capture is probably strongest at the State and Federal level just because centralization is easiest but these hand-down regulations that force the hand of local authorities - not controlling them entirely but preventing any tactics that cut-out the mass of rent seeking monopolies that now count on state funds for their sustenance.

Zigurd• 10 years ago

Now I know national textbooks are a bit much

We have an enormous federal Dpt. of Ed. but we don't have no-cost, open source curriculae, textbooks, school operations software etc. That's a damn shame. That kind of resource could transform education in non-affluent school districts.

jcoffland2• 10 years ago

Employees generally don't get paid during a strike.

the-dude• 10 years ago

Unions generally have a fund for this.

etjossem• 10 years ago

They don't get paid by their employer, correct. To cover costs, the union backing them will typically issue strike pay.

But the project doesn't make any progress until they're back to work, and labor costs may be higher after negotiation. That's why parent commenter was surprised that France - a country with strong labor unions that strike often - still has lower per-mile infrastructure costs than the United States.

urbanhat• 10 years ago

I agree, and I suspect the union problem is a symptom of the rigid procurement rules. Only a few contractors know how to navigate the system, and so the market is not really "contestable." Even though it's the private sector, unions retain bargaining power.

Also, with major urban projects there's usually political pressure from the local community to use local union labor. That might make it into contracts even if it's not a locally managed project. Again, the underlying problem is not unions, but excessive localism.

humanrebar7• 10 years ago

The first candidate I'd propose for the top slot is diffusion of responsibility stemming from a US obsession with localism

If it were only localism, there would be localities that were fantastic at investing in their own infrastructure. Responsibilities, even funding local schools, have been nationalizing slowly over the years without an explicit change in the U.S. Constitution. So the national government has to 'hack' the system with grants and taxes to indirectly get national policies enacted. It's a corruption of the system to work around the Constitutional protection of federalism.

One solution would be to amend the Constitution to make things like education national policy once and for all. Another would be for the national government to leave things like building roads and funding schools to the local governments.

bradleyjg3• 10 years ago

If a transportation system crosses more than one jurisdiction than it doesn't really matter if some localities are fantastic at investing in their own infrastructure. It is inherently a problem that can be solved optimally only at a different level. It might be possible to design a system such that metro areas are always a single jurisdiction, but given that such areas grow and shrink over time it wouldn't be easy.

I don't think that "corruption of the system" is a cause in and of itself of the high cost of infrastructure construction or repair. Whether or not the Constitution would need to be changed, that's an implementation detail. First we need to figure out if diffusion of responsibility is actually a major problem (as I suggest), then get widespread agreement that that is the case, only then should we start worrying about what legal barters may or may not be in the way of mitigation strategies.

lifeisstillgood• 10 years ago

> One solution would be to amend the Constitution

Err. That's probably a tall order.

imglorp• 10 years ago

The feds could also do some easy, central infrastructure things that would reduce school and local govt funding needs in the first place. If the schools or localities want to buy their own, great. Three examples:

1. It seems every school uses a mishmash of Moodle, Schoology, and some Sharepoint abortion. If the feds would spend around the cost of 3 or 4 F-35 helmets ($1.6M) they could build and offer a decent school site. You know, homeworks, attendance. It could be the same software everywhere, even if you changed schools. Teachers wouldn't need retraining and kids would have their stuff follow them.

2. Fund a decent central, unbiased curriculum with open source text books. Kansas can suck an egg. Localities really _don't_ need their own curricula. The 3 R's don't need to vary with district.

3. Same as 1 but for local government operations software. Do they really all need their own?

paganel• 10 years ago

Another would be for the national government to leave things like building roads and funding schools to the local governments.

But then you'll have people from poorer neighborhoods/towns drive on worst roads and sending their kids to crappier schools compared to wealthier parts of the country. The roads' problem let's say is not the end of the world per se, but the fact that your kids will have less chances in life only because your neighborhood is not as wealthy as the one 5 or 10 miles down the road seems moraly wrong and a misallocation of resources.

fooey2• 10 years ago

It's in the national interest to have well maintained roads the military would be able to traverse. That's really why we have the interstate highway system in the first place.

It's also in the national interest to have a well educated population with a generally common knowledge foundation. Education is a cultural and nationalistic cornerstone.

emodendroket4• 10 years ago

Realistically, I don't see how an "every municipality for itself" (or even at the state level) system wouldn't make things much slower and more inefficient no matter what. It seems like a recipe for either too much duplication of function or else an unclear chain of command.

Aleman360• 10 years ago

If it were only localism, there would be localities that were fantastic at investing in their own infrastructure.

Seattle. Great water, renewable energy, lots of transit investment.

erichocean• 10 years ago

If it were only localism, there would be localities that were fantastic at investing in their own infrastructure.

There's at least one: Bellevue, Washington, USA (across the lake from Seattle). I lived near there growing up and watched in awe how they repeatedly refactored the city in record time, over and over and over again, improving it each time. It was almost like watching agile development happen physically in front of you.

thatfrenchguy• 10 years ago

France has a long history of making good infrastructure (TGV anyone ?) so there's that.

Also, more vacation (5+ weeks) + better health care -> more productive workers, especially in physical labor work.

cptskippy• 10 years ago

My wife manages large scale remediation projects and says that on average a government contract costs approximately twice what a non-government contract would due to time, not materials cost.

All contracts have to be proposed with estimates, awarded, negotiated, revised, and re-proposed. Everything has to be approved and the lead times for going into the field or requisitioning materials is counted in months, not weeks or days. All contract project managers have a corresponding Government assigned project manager who must approve everything.

She said procurement rules are onerous and have fun restrictions like "all materials must be sourced from the USA unless unavailable" that add to the time needed to find and vet sources.

Because of all this, the government typically awards contracts to companies it has worked with previously and not necessarily the lowest bidders. The contractors almost always subcontract out everything except management. It's also not uncommon when the government has to award a contract to new contractor, they will also contract with a familiar firm for PMs to manage the new contractor.

So maybe a little bit of your first candidate and less of the second?

zaroth• 10 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]

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 -> $3B were poor oversight over the bidding process [2].

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/bike path.

Nowhere in the news do I see anyone talking about labor rates, unions, health insurance / pension, or eminent domain issues causing the cost overruns.

I'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'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'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.

What'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 1/3rd.

I think the biggest problem is cultural. The people overseeing the project are not spending every dollar like it's their own. If the cost isn't "real" to the people running the project, it completely changes how the project is run. Human nature.

[0] http://greenlineextension.eot.state.ma.us/docs_about.html

[1] https://en.m.wikipedia.org/wiki/Green_Line_Extension

[2] http://www.boston.com/news/local-news/2016/01/15/report-gree...

ChemicalWarfare• 10 years ago

With things like subway stations it's not easy to compare the cost because more 'extravagant' design will drive the cost up.

Apples and apples type comparison would be comparing things like cost of building one mile of the highway.

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.

gvb• 10 years ago

We need a corollary to Betteridge's law: newspaper headlines that start with "Why..." do not answer the question.

transfire• 10 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.

betaby• 10 years ago

This. Costs go x10 because of layers of subcontractors and machinery rentals up to the smallest screwdrivers.

exelius• 10 years ago

It's simple: there is so much money in our political system (and there always has been) that unless you're donating to a candidate / party machine, your pet projects don't get done. This means a lot of things that matter to average citizens like roads, schools, parks, etc. don't have anyone championing them -- unless there are investors who want to build up the area and want to externalize some of their costs.

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.

What it also means is that unless your project (or collective projects as often the case in gentrifying neighborhoods) promises a big return, it's not gonna get done. What's more is that so much of our infrastructure is so old and in such poor condition that it's often cheaper to just build new stuff in another area than it is to rip out what'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.

maxerickson6• 10 years ago

I wonder how much of it goes back to the attitudes of decision makers.

A theme of this essay[1] is that decisions makers will outright reject ideas they are uncomfortable with.

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's going to potentially be difficult to convince that person that the structure of bidding and contracts is important.

I agree that this is seemingly absurd and terrifying.

[1] https://news.ycombinator.com/item?id=11577074

baron8162• 10 years ago

One thing people don't realize is that Union affiliation is actually still quite high in New York state--25%, and probably higher in the NYC area.

New York YIMBY address the topic two years ago: http://newyorkyimby.com/2014/09/the-mta-wants-second-avenue-...

In it, they cite union rules that require four times the necessary personnel on underground construction projects. They don't blame it all on unions, but I'm definitely in the camp that unions do much more harm than good.

mikeyouse• 10 years ago

It's hard to blame unions in the US for any substantial part of the cost when areas with much cheaper infrastructure costs have much stronger unions and equivalent salary levels.

baron8162• 10 years ago

My point is that New York HAS strong unions, especially for the MTA. And regardless of their salaries (which are higher than their European and Asian counterparts), they have to employ 4x more people to complete a similar job.

zeveb• 10 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'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't get honest employment, or to the extent that government contractors are experts in milking tax dollars, or what.

It completely doesn't surprise me that we spend more on less infrastructure.

ido3• 10 years ago

    by and large America is responsible for the security and 
    peace of the global

A task it took on itself mostly unasked for and unappreciated by the rest of that globe.

vkou• 10 years ago

America is largely responsible for the security and peace of American overseas interests.

coddingtonbear2• 10 years ago

Unappreciated might be somewhat of a stretch; European countries were certainly able to avoid spending a significant fraction of their budget on post-war defense against the Soviet Union because the United States largely took that on.

jsprogrammer3• 10 years ago

The northern hemisphere was blowing up and both the Axis and Allies begged the US to intervene.

deong• 10 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't know to what extent this is a

I don't think it's too much of a leap to assess the majority of the blame to the way our system works. Our elections are privately funded, so political gain is easily bought by anyone with enough money, and one way to have enough money is to use your political capital to ensure the country remains an excellent place for you to make money.

There's no aspect of the past few decades of US law that doesn't have direct fingerprints of someone's personal financial interest on it. We pay a lot to get a little, because the people providing a little would prefer to extract from us a lot.

JacobJans• 10 years ago

This article seems quite specific at first – but when you dig down, it is actually rather vague.

For example, the author complains that his mother needs a license to bake food. What kind of license? What state?

Maybe a food handlers license? These are incredibly common, and very easy to obtain.

Maybe a business license? Again – most states are falling over themselves to make it easy to give you a business license.

It's hard to tell exactly what is being argued against.

Food safety is incredibly important – and food handler's licenses are easy to obtain. States need to collect taxes, that's the basic reason a business needs to get a license. Neither of these things are controversial. That's why I'm guessing the author of this article didn't go into specifics.

zanny3• 10 years ago

Neither of these things are controversial.

I'll give plenty of controversy, because your point is fundamental to the runaway problem of licensing and certification in the US and elsewhere. You think it is just one (well, you list two) licenses, but then you find out you also need commercial permits for the building, you need permits for the imports of most of the ingredients, you need certification to serve certain kinds of foods (especially in many states alcohol), and by the end you do not have just two licenses you need to get, you can have dozens of them.

And there is no established canonical way to find out which you need, because they vary not only by state but by municipality. And even if you somehow "ask" your regional better business bureau for all the licenses and certifications you need, if they get them wrong, you are still liable and at fault for not knowing.

Food safety is incredibly important. If every distributor of food needs a license, the barrier to entry by its nature either must be insanely low or a huge amount of potential productivity lost to the licensing process. If the barrier to entry is low, violating such a license is painless and easy. It is a meme now that restaurants will only clean up the cockroaches the week of food and safety inspections in New York, and that applies everywhere.

In the end, the only safeguard against unethical business behavior is an informed consumer. And those do not come from annual state inspections where the inspector is often bought off in the first place. They come from consumers having communication channels to better inform themselves and others about what is or is not trustworthy. We would have significantly higher standards of food safety if instead of state agencies doing it restaurants sought certification from highly respected private firms that do such inspections, because then the reputation of both inspector and restaurant on the line, and consumers can dynamically create or trust any number of inspectors to meet demand. Compare that to how well trusted the state is for just about anything by anyone, and consider which would be better, aside from the lovely side effect of there being no outdated over-saturated government bureaucracy around food inspections.

gamblor9564• 10 years ago

In the end, the only safeguard against unethical business behavior is an informed consumer.

The point of food safety regulations is so that the consumer doesn't have to do a boatload of research every time they eat out to protect their health. This reduces friction and expands the market for food products and services.

We would have significantly higher standards of food safety if instead of state agencies doing it restaurants sought certification from highly respected private firms that do such inspections, because then the reputation of both inspector and restaurant on the line, and consumers can dynamically create or trust any number of inspectors to meet demand.

Extraordinary claims require extraordinary proof. A government agency can force a restaurant or food distributor/etc to shut down if it falls below standards, meaning lost dollars, meaning a very strong incentive to maintain standards. They can also require the restaurant to post the results of the inspection on premises, which is a strong, immediate, and visible blow to the restaurant/food distributor's reputation. Meanwhile, a private inspection agency can...say bad things about a restaurant? And this will magically cause customers to avoid the restaurant? Assuming that said customers somehow are informed of the private inspection agency's report? We already have something like this, and it's corrupt as all hell: the Better Business Bureau, and Yelp, both of which are known to remove negative reviews in exchange for money.

maxxxxx3• 10 years ago

" highly respected private firms "

If the financial crisis has taught us anything it's that those highly respected firms tend to get corrupted easily. See rating agencies. Who verifies that the private firm is clean?

Nav_Panel• 10 years ago

I think you meant to comment here instead: https://news.ycombinator.com/item?id=11714340

mschuster912• 10 years ago

It'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).

The most common cause why costs have exploded is that, unlike "old times", 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.

Also, in the EU, projects above a certain threshold have to be advertised in the entire EU - leading to projects with little to no "native" 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).

Furthermore, regulatory oversight has been on a massive decline as competent people leave or don't even enter state service, so that too few people in government employment are available to properly assess and control construction process.

sageikosa4• 10 years ago

Well, maybe Europe built itself with government projects, but apart from some dubious transcontinental rail lines, America's "original" heavy and light rail systems were built by combinations of corporate, municipal and state entities. Roads were municipal matters, heavy trucks were seldom seen as that channel grew in symbiosis with the Eisenhower Highway system. Heavy trucks drive the need for durable roads, and they just weren't the norm until the Fed subsidized the crap out of inter-city highways and regulated the rail (most predominantly: the Pennsylvania RR) until if collapsed. Light-rail had its own similar history with roads and busses (and the fight for "right-of-way" at street level).

mschuster912• 10 years ago

Weren't the beginnings of cross-US rail lines laid back at a time where regulatory frameworks (esp. cross-county/state, and noise emission) weren't that strict as today?

Also, back in the time it was customary to create stock companies where people bought shares to actually BUILD something of value?

When was the last time that a stock company was founded to build long lasting infrastructure?

Stock companies, these days, in my opinion focus WAY too much on creating short-term gains on the back of employees and unsuspecting investors...

maxxxxx3• 10 years ago

I think you are hitting the real point. Governments have less and less experts who can oversee such a project. Instead they rely on bidders who manage the project. If you ever have dealt with contractors working on your house our outsourced an IT project to a company you quickly learn that you need to stay on top of things all the time otherwise you'll get ripped off.

excalibur• 10 years ago

Red tape.

scotty79• 10 years ago

Usually question "Why X is so expensive in US?" can be answered with "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."

I guess case with infrastructure is more complex.

redthrowaway• 10 years ago

I thought the reason NYC cost so much to build subways in was because it's all granite bedrock, which is expensive to tunnel through, and there's a ton of spottily-documented crap already down there.

Why U.S. Infrastructure Costs So Much

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