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Using stimulus funds but from another source

by Benjamin Kabak

Last week, I explained why I was not in favor of Gene Russianoff’s plan to use stimulus funds to cover the MTA operating gap. It’s not sound policy to move money from capital projects to operating deficits, and to do so would risk future MTA financial problems without solving the current one on hand. Today, Cap’n Transit comes out in favor of using stimulus funds but with a twist. He wants the unused Department of Transportation stimulus funds — those not being used to widen the Major Deegan or those earmarked twice for Brooklyn Bridge repairs — to fund the MTA’s operating gap. It is, of course, far better to use someone else’s capital funds to cover the MTA’s operating gap than it is to use the MTA’s capital funds to do the same thing. Sign me up.

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Alon Levy December 21, 2009 - 6:42 pm

You can use stimulus funds from the same source. I’ve just looked up subway construction costs in London, Paris, and Berlin. In Paris and Berlin, they’re $250 million per km in 2009 dollars, barely one seventh the cost of SAS Phase 1. In London, a recent extension ran up to $450 million/km in today’s money, but that extension included four crossings of the River Thames. Recall that SAS is now budgeted at $1.7 billion/km and the 7 extension at $1.3 billion/km.

So here’s my idea. Scrap the SAS process and restart it using contractors who don’t overcharge by a factor of 7, and this time build the full line, from 125th to Lower Manhattan. The MTA would come out about $600 million ahead, and would end up with a much more useful subway. Do the same to the 7 extension; you’d end up with both a station at 10th Avenue and about $1.5 billion less in construction costs.

Benjamin Kabak December 21, 2009 - 10:30 pm

I understand what you’re saying, Alon, and I know you’ve been saying it for a while. But do you have any idea why it’s so much more expensive in New York than in the other cities? Is it possible that due to labor, safety standards and preexisting infrastructure that it just will be that much more expensive? I don’t have the answers to those questions, but I don’t think it’s as simple as saying, “Start over and bid better.”

Alon Levy December 22, 2009 - 12:17 am

I’m trying to figure this out myself… It’s not labor or safety or preexisting infrastructure or any of the other factors people use to compare the US with China, though – those wouldn’t explain why NY is several times more expensive to build in than Paris and London. I’m not even sure it’s US-specific – DC and LA are cheaper to build in, and to some extent so is San Francisco (but not Chicago).

I’m actually talking about this with a friend, and the explanations either of us has come up with are,

– Manhattan’s bedrock may be considerably harder to tunnel through than, say, Paris’s catacomb-ridden underground or Tokyo’s multi-subway underground. It’s not clear, though, and nowadays it’s all done with TBMs, whereas the main difficulty of bedrock is in blasting.

– Incompetence/patronage – it’s significant that the other city in the US that can’t do cost control is Chicago. The MTA and its contractors may well be stealing things. Less nefariously, the local consultants don’t get paid based on how much money they save, and American transit agencies don’t have in-house expertise.

– The idea that what was good for my grandfather is good for me. It works against efficiency improvements, and possibly for labor-intensive construction – after all, labor wasn’t expensive in the 1930s.

– The many small things issue – it could be that EIRs, union issues, incompetence, nostalgia, etc. are not detrimental by themselves, but together they add up.

Aaron December 22, 2009 - 5:05 am

Labor wasn’t expensive in the 1930s in part because repercussions for the deaths of workers were pretty much nil. 14 people died in the course of the construction of the ESB. At the time it was treated simply as a risk that a construction worker took on for the sake of the work. Now, we as a society don’t permit those kinds of things. If during the course of a building’s construction 14 people died in 2010, there would be people in jail and companies before a bankruptcy magistrate. In our modern society, I think the vast majority of people feel that way. I’m not going to put a price on a minimum level of safety, say that I’ll be willing to pay 80% of today’s price with a tolerance limit of 10 deaths.

So, no, for me, what was good enough for my grandfather, who risked his life working in a factory with poor labor standards, is not good enough for me.

I’m not saying that’s the only reason costs are higher here – after all, Western Europe has high comparative labor costs too – at the last time I was familiar with the numbers (admittedly, quite a few years ago), their wages were a touch lower than the US’s but the increased benefits substantially higher than the US’s numbers. But you keep saying that SAS and other subway construction is vastly too expensive without identifying items where they different from that over in the UK. You can’t be the only person in New York who has noticed this – has anyone done a study of itemized costs by NYCT, TfL and Paris Metro to really see where the differences lay? I’m no accountant or I’d try to research it myself. If there is a systemic difference, I think you would be able to track it as some items (e.g. property acquisition, labor, materials, design) being outrageously out of whack, but if it’s just a generic cost-of-living issue, I suspect all line items would be correlative with other cities’ circumstances, even if higher. After all, it’s probably a lot cheaper to build a subway in a third-world city where you can pay people $5 a day and buy property for the cost of a mid-size sedan in the US.

I suspect a lot of it is that New York’s density is pretty much unparalleled except for, say, Tokyo or Hong Kong, and Tokyo doesn’t have the same aversion to visible infrastructure that the US does, which has to help keep costs down when you don’t have NIMBY’s screaming all day. They have an acceptance for (if not love of) utilitarian structures that seems to be unparalleled elsewhere in the world. Unfortunately, I haven’t been to Japan yet, but the pictures friends have sent me lead me to think that the Chicago El lines would be subtle in comparison to what they build in Tokyo.

Boris December 22, 2009 - 12:16 pm

On Sunday night I ran to make the bus, and the bus driver scolded me for risking my life. He said if he started moving he could’ve scooped me up with the rear wheels, and that for him it would’ve just been some paperwork. Customers are expendable.

It just goes to show what our society values. There is always some group that is considered disposable. I wouldn’t be surprised if there are 14 pedestrian/bicyclist/motorist injuries and deaths on Second Avenue per year, with some of them related to subway construction (blind turns, potholes, incorrect temporary markings, lane closures, etc). But the subway workers are safe!

Tokyo elevated lines run right up to buildings, and some major stations are little better than Penn Station in terms of claustrophobic low ceilings and a multitude of signs and people. But their trains run much quieter, so overall I think it’s less of a nuisance than a Chicago or New York elevated.

In theory, since subway construction contracts are generally public information (or should be, since they are built with taxpayers’ money) it should be possible to compare costs.

Alon Levy December 22, 2009 - 7:54 pm

Boris, I know Tokyo saves money by building els. But I’m comparing fully underground lines to fully underground lines here.

It would be an interesting project to compare costs item by item. I’m not sure it’s public information, though. If anyone started grilling the MTA on the cost differential it could lead to initial answers, though.

Alon Levy December 22, 2009 - 7:49 pm

Paris is as dense as Manhattan, and in general France has the same NIMBYism issues as the US. Tokyo is less dense, but has no grid system, so its density is causing more access problems. In any other city, having a 100′-wide Second Avenue to build a subway under would make the project a lot simpler.

London and Paris are both as rich as New York – and both are dominated by powerful public sector unions, just like New York. Britain and France are generally poorer than the US, but their richest cities are on a par with the richest cities of the US. And they actually have higher cost of living; as far as I can tell, both London and Paris have higher rents than New York, and so does Tokyo.

I don’t know that anyone else in the US has ever compared construction costs to costs in Europe and Japan. A lot of people compare costs to costs in China, but, I’m sad to say, the idea of learning from other developed countries/cities is foreign to the US in general and New York in particular.

Aaron December 22, 2009 - 5:10 am

LA is also cheaper to build in because you don’t have 400 years of utilities underground, and while earthquake standards make constructing new skyscrapers in California essentially impossible (my understanding is that today’s earthquake standards would not permit for buildings like the Library Tower to be built today in any form, that architects consider there to be an earthquake-driven hard limit on building height), the lack of a need to build for weather means that you can get some leeway on some practices. Also, much of what I commonly read in Boston and New York is that they can never open up a new tunnel without discovering SOME infrastructure of significance that was previously unknown to the agencies in question. I’ve heard tunneling referred to as a box of chocolates – you never know what you’re going to get ;p. LA does have some drama in terms of methane/oil, but I highly doubt it’s on the level of New York or Boston.

Alon Levy December 22, 2009 - 7:45 pm

Um, London and Paris are both much older than New York. In Paris, lines are encountering Revolution-era catacombs. Tokyo’s newer, but it has so much subway infrastructure that new lines have to run 100 feet underground at places.

Adam G December 21, 2009 - 10:54 pm

WIDENING the Major Deegan instead of, oh, scrapping it? Are you *kidding* me? What a horrible use of public money.

Duke87 December 23, 2009 - 1:36 am

What they no doubt mean by “widening” is improving the shoulders and modernizing the road to make it safer. There’s no way any lanes are getting added, there’d be no room.

Not an inherently bad use of money, as highways are important infrastructure too (especially for freight). Although, having to choose, the MTA is of course more important – so if those funds can be rerouted, doing so is a good idea.

Cap'n Transit December 26, 2009 - 12:19 am

No, Duke, they meant adding a lane.

The costs of Second Ave. construction :: Second Ave. Sagas | A New York City Subway Blog January 14, 2010 - 12:52 am

[…] 57th St. and 7th Ave. to 96th St. and 2nd Ave., this extension is, as frequent commenter Alon Levy has noted, the most expensive subway under construction. It’s budgeted at approximately $1.7 billion […]


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