One of the enduring mantras from the Democrats about the American economy is that construction by the government of more infrastructure is the best way to achieve growth. I was reminded of just how silly this claim is by a column by Nicole Gelinas in today's New York Post. Gelinas recounts a bit of the history of the construction of the "East Side Access" project in New York by the Metropolitan Transportation Authority. East Side Access is a rail tunnel which will allow some trains from Long Island to go to Grand Central Terminal instead of to Penn Station where they currently end. The two train stations are about 15 blocks apart, and the new access to Grand Central would make the commute somewhat more convenient for an estimated 80,000 daily travelers from Long Island. The project was approved about two decades ago and was estimated to cost $3 billion with completion in 2012. As of now, with the project half built, the total cost is estimated at over 10.2 billion dollars with completion in 2022.
Now I have more than a passing knowledge of construction work done by the MTA and the reality of the estimates of time and cost which are completed prior to the start of construction. For years, I was an attorney involved in a great many projects of this sort. The one immutable fact about construction by the MTA and its agencies was that the estimates of time and cost of construction were too low. Even still, a cost overrun greater than 200% and a delay in excess of a decade in completion are extreme. This is even worse, since it is inevitable that both the cost and the time for completion will increase before the public first uses this new tunnel.
The reality is that the construction of public transit improvements of this sort cannot be completed in New York efficiently anymore. Not long ago, China built a new subway line under Shanghai in three and a half years; it came in under budget. In New York, they cannot even complete a final design for a smaller project in that time. There are just too many groups, agencies and others who get involved. The end result of that design process is a set of plans from which the project often cannot be built. There are then endless changes as the difficulties with the design are disclosed. Millions or billions are wasted due to delay, unnecessary work, inefficiency and the like.
Just over 100 years ago, much of the New York subway system was built by private companies. They got the job done on schedule and under budget for the most part. The city wanted the transit improvements, and it made sure that construction took priority so that the work could move forward quickly. The resulting subway system turned out to be one of the greatest engines of prosperity for New York in its history. Later, the government took over the system. Today, the idea of efficient construction is just a memory from the history books.
This is just one example of the problems with government construction. Throwing more cash down this rat hole would not be a smart way to grow the economy.
Now I have more than a passing knowledge of construction work done by the MTA and the reality of the estimates of time and cost which are completed prior to the start of construction. For years, I was an attorney involved in a great many projects of this sort. The one immutable fact about construction by the MTA and its agencies was that the estimates of time and cost of construction were too low. Even still, a cost overrun greater than 200% and a delay in excess of a decade in completion are extreme. This is even worse, since it is inevitable that both the cost and the time for completion will increase before the public first uses this new tunnel.
The reality is that the construction of public transit improvements of this sort cannot be completed in New York efficiently anymore. Not long ago, China built a new subway line under Shanghai in three and a half years; it came in under budget. In New York, they cannot even complete a final design for a smaller project in that time. There are just too many groups, agencies and others who get involved. The end result of that design process is a set of plans from which the project often cannot be built. There are then endless changes as the difficulties with the design are disclosed. Millions or billions are wasted due to delay, unnecessary work, inefficiency and the like.
Just over 100 years ago, much of the New York subway system was built by private companies. They got the job done on schedule and under budget for the most part. The city wanted the transit improvements, and it made sure that construction took priority so that the work could move forward quickly. The resulting subway system turned out to be one of the greatest engines of prosperity for New York in its history. Later, the government took over the system. Today, the idea of efficient construction is just a memory from the history books.
This is just one example of the problems with government construction. Throwing more cash down this rat hole would not be a smart way to grow the economy.
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