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Transit Costs Project Webinar - Shared screen with speaker view
Eric Goldwyn
23:12
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Alon Levy
35:06
If anyone has questions, you can post them in the Q&A and we'll answer in text or on stream.
Parag Bhandari
37:22
I have a few questions:
Parag Bhandari
37:27
1. Have any agencies from canada or the US contacted you guys in asking for ways to bring construction costs down?2. Do you have a step by step list of actionable items for agencies to implement to systemically bring costs down near the levels of low cost countries? Is it as simple as hiring experts from spain and italy and let them lead projects to build?3. At one point, countries like canada and the us were able to build big construction projects at a reasonable cost. How did we lose this skill?4. How optimistic are you that some agencies in anglo speaking countries will adopt some of the best practices to lower construction costs?5. Speaking as a non transit expert, how exactly can i lobby my transit agency or politician to try to adopt some best practices to lower construction costs?
Alex Armlovich
39:21
Why hasn't any learning curve shown up in NYC MTA's 2nd Ave project? Phase 2 is budgeted to cost 30%+ more per mile than Phase 1, despite being produced inside the same MTACC/C&D agency. (And does this have implications for the "just keep building and we'll get better" argument)
Matthew Bornholt
40:40
1. How have your non Anglo case studies responded to your telling them they are awesome?
Yangbo Du
41:08
@Alex Apparently procurement is getting worse, as Levy et al have been observing.
Alon Levy
41:26
@Alex: very few places have such a learning curve - costs do sometimes go down over time (as in Turkey and Italy) but it's rare even in low-cost countries, for the most part they just got it right from the start.
Matthew Bornholt
41:30
2. How have you not asked the Korea foundation for money to tell them Korea is awesome in both urban rail and HSR?
Marc Grégoire
41:35
To reduce costs, is it important to have standardised specifications for construction? In some places every agency has its own specifications, but that need not be the case. Is it more useful to standardise technical specifications, or general contractual provisions?
Alon Levy
44:46
Parag, to take your questions one at a time:1. Yes, e.g. Sound Transit invited Eric to its technical advisory group.2. Yes, but they're pretty complicated - and "hire people from abroad" is not that simple either, because how is (say) Janno Lieber going to know how to evaluate a job applicant who's never worked in an English-speaking country?3. Canada Anglicized 10-20 years ago, same thing I worry France and Scandinavia will do in the next 20 years. The US has a separate history of how it got so bad - in New York it goes back to the IND, which Robert Caro has harsh words for.4. I really don't know, to be honest. People do clam up when I say "New York should be more like Milan" or something like that.5. Hmmm. Good question and we're not the best-equipped to answer, but I think it's useful to be supportive of cost-saving measures and counter NIMBY demands for betterments.
Alon Levy
45:52
Matthew:1. Sweden doesn't really think this way. Italy and Turkey certainly don't - they're riven by cultural cringe.2. Hmmm, we may follow up with them...
Alon Levy
46:36
Marc: it helps, but there is some standardization in the US, it's just sometimes around bad standards, like full-length mezzanines.
Connor Harris
46:58
@Elif and Marco, or anyone else if they want to take it - what is the process for historic preservation in old cities in Turkey and Italy? In the US this is (to my understanding) generally part of the EIS process and "historic" can include anything that local NIMBYs feel sentimental about
Ryland Lu
48:16
Qs: 1. I know you're not a fan of consultants but is there any constructive role consultants can play in bringing costs down (my firm has projects in Turkey so its not like there are no consultants there)
Jaime Garmendia
50:01
just hiring experts is doomed to failure if you don't have an integration plan. the institutions need a culture and process that is amenable to course correction. without that, all you are doing is setting people up to fail.
Alon Levy
50:57
Connor:In Italy, the monument protection bureaucracy is very powerful - it's done bureaucratically, not adversarially. It has exacting standards - building settlement is limited to 3 mm in sensitive areas (cf. the North-South Line in Amsterdam, which due to poor construction had 30 cm). Local NIMBYs do not get to decide whether a building is actually from the Renaissance or just some late-19c tenement.
Alon Levy
51:16
(What Jaime said. ^^^)
Yangbo Du
53:09
Try virtually touring some European cities from above using Google Earth. Built environment is actually not dissimilar to that of U.S. cities; key difference is extensive hollowing out of the inner urban core in the latter.
Yangbo Du
53:38
And suburban lot sizes are not that much smaller (though single-family houses are a fair bit smaller)
Alon Levy
53:56
Ryland:Hmmm. My understanding is that consultants can suggest lower-cost techniques, but often prefer not to rock the boat? So in that case, insisting on rocking the boat may be valuable, I'm not sure. Another thing: it's useful to assimilate knowledge from lower-cost places - often what we see is that Anglo consultants have some respect at a distance for France or Germany but don't know how things work here.
Yangbo Du
55:44
@Ryland Rocking the boat might be worth a try if elected officials are willing to circumvent intransigent management at agencies.
Alon Levy
57:24
Garrett:New York is worse than the rest. Hard to say otherwise - Chicago isn't building subways, Boston built the GLX at horrifically high costs but there's no clean comparison, Philadelphia proposed a decently-priced Navy Yard extension and then it blew up (to normal-US costs, not even San Jose costs, let alone New York costs).
Alon Levy
57:56
P.S. Chicago is pretty efficient at operations, unlike New York.
Ryland Lu
58:06
Alon: Definitely an issue I've noticed re: rocking the boat. I asked recently about transferring to an office in continental Europe and was advised that "they don't English" (though I know some of local languages)
Marc Grégoire
58:32
In terms of standards, I was thinking more about how construction contracts are structured: unit price, lump sum, a mix of the two; terms of payment; role of the independent engineer (if any); prequalification for contractors; how "value engineering" is treated. It seems to me that agencies are often very independent on such matters, so that there is a lack of learning from each other, and contractors have to budget more money for lawyers to study each contract. But I could be wrong, maybe this is a minor factor.
Kasper Jensen
58:47
Watching from the outside it seems like the layer between the transit agencies (who love pouring concrete and don't care much about the cost) and the politicians (who don't know much about transit) is very thin in the US. At least here in Denmark there's another bureaucratic layer of transit planners, economists, engineers and so on in between who's job is to make sure things are well-planned and cost-efficient. Is that missing in the US?
Mike Lindblom
59:08
Seattle: U Link is about $600m/mile but provides excellent ridership (by US light rail standards). Though Ballard-West Seattle is only 1/3 or so tunneled, the proposed vertical tunnel stations go as deep as 150 feet, and additional tunnels are likely on the outskirts. Eric Goldwyn was kind enough to explain how costs explode as you dig deeper. https://www.seattletimes.com/seattle-news/transportation/rolling-in-the-deep-sound-transit-riders-would-descend-nine-levels-downtown/
Egemen Sentin
59:24
@Ryland Lu: I've seen some of the projects your company is involved with in Turkey. Most of them are massively unpopular due to exorbitant government guarantees attached to them - so unpopular that a country-wide debate about "odious debt" sprung up. I wouldn't bring up Turkey as an example *at all* for the supposed good consultants can do, especially in bringing the costs down :)
Yangbo Du
01:00:58
Santo Domingo might be a better example of what consultants can do (Int$150M/km of New York-style underground rail, using Spanish consultants to the best of my knowledge).
Alon Levy
01:01:18
Marc: yes, these are all important - and the important bit is to not just learn but also learn from places that get it right, rather than adopt the London method and wonder why you get London costs in the process.
Alon Levy
01:02:01
Kasper: that layer exists in the US too, but it's disempowered in favor of political appointees.
Alon Levy
01:02:02
Mike: yeah, U Link is $350m/km, Ballard-West Seattle is more like $600m/km and is majority-above-ground.
Jaime Garmendia
01:04:44
@Marc the FTA pulls a lot of strings that are tied to capital funding. a lot of practices are standardized because of federal funding requirements.
Jaime Garmendia
01:05:35
every state does things differently, almost out of a bizarre sense of pride, but the federal government imposes a little bit of procedural order
Jaime Garmendia
01:06:58
I would look at design-build (alternative construction procurement methodology) and owner's representation as two facets that are incredibly variant across the country
mark vallianatos
01:09:12
In the US, do you think it is more likely that agencies can build up internal capacity to reach higher levels of internal design etc, or for state agencies to do so? (ie caltrans vs BART + Metro). Or do both need to try?
Connor Harris
01:09:34
@Alon: there's a project in the Philadelphia suburbs that ruled out the best route largely based on environmental impacts (someone complained that an elevated viaduct over a hideous five-lane stroad would look bad)
Alon Levy
01:11:04
Mark: this really depends. In New York the agency is big enough it could do it if it wanted (and I suspect this goes both ways: size means it can ignore trends elsewhere and not notice the cost explosion). In smaller cities it's harder and that's why in France, RATP and SNCF build megaprojects for provincial cities.
Alon Levy
01:11:47
Connor: you mean Roosevelt? (Then again, bear in mind - this is a pretty egregious example, but new els are rare in developed countries nowadays.)
Connor Harris
01:12:14
@Alon: King of Prussia Rail
Alon Levy
01:13:21
@Connor: oh, that one! Isn't that a pretty low-ridership line? Or am I misremembering?
Patrick Spence
01:13:30
I'd like to hear about the differences in funding structures between countries and how that might contribute to cost. The U.S.'s funding where authorities cobble together competitive grants from the state+federal governments has always struck me as...weird. To what extent does a solution mean the USDOT, etc. unilaterally plan for and prioritize projects, rather going ahead with this awkward bottom-up approach?
Connor Harris
01:13:45
The ridership projections were pretty bad iirc
Connor Harris
01:14:05
The new route is also mostly an el, but IIRC it runs through an easement for a high-voltage power line (the EIS had extensive discussion of the impacts on open space that this would have)
Alon Levy
01:15:15
Patrick: excellent question! Sadly, Turkey is a pretty bad example - projects are done by the city or the state. Sweden does have this cobbling - Scandinavia has very high levels of fiscal devolution - but has better coordination than the US, for example it's normal for people to move between Trafikverket managing projects that Trafikverket manages (like Citybanan) and SLL managing projects that SLL manages (like Nya Tunnelbanan).
Lee Caragiale
01:17:45
@Alon --hoping you can elaborate on your answer to my "commercial sensitivity" question, so I can share insights with colleagues and try to move the needle. Why is it an illegitimate issue? What would you respond to someone refusing to share costs for that reason besides "don't play spy games"? Thank you!
Alon Levy
01:19:10
Garrett: depends? Sweden has excellent unification of such planning, which is how Stockholm has such high mass transit usage for its size. But Switzerland is as I understand it very NIMBY.
Alon Levy
01:20:32
Lee: reference prices are important public information - they let the public know how its money is being spent, helps inform public debate (on matters of labor costs, competition, contractor profit, etc.), and provide a public anchor for any potential disputes in case of inevitable change orders.
Alon Levy
01:22:19
There's just a culture of public secrecy in the US and the UK; Australia won't even tell you how much projects cost until almot the moment of the decision to build. Insiders love that, it makes them feel powerful for having knowledge others don't.
Connor Harris
01:27:09
@Alon: my (very limited) investigations of freeway costs in Europe suggest that they generally follow the same rank order as urban transit costs; e.g. Germany and the Netherlands are the highest, one disastrous in-progress PPP in Italy excepted. Would this combined with your other research suggest that municipal government factors are generally not that important?
Alon Levy
01:27:48
Connor: mostly I want to see your database because I'm interested. Do you have a US comparison for these as well?
Marc Grégoire
01:31:30
Regarding sharing cost information, in principle this could help contractors collude to raise prices. "Hmm my major competitor bid $6/kg for reinforcing in this project, I would be competitive bidding somewhere around the same for the next one." OTOH, if there's good competition, contractors could look and see a place to sharpen their pencils. I agree that such information should be public.
Connor Harris
01:31:49
@Alon: the extent of my research is basically what I wrote in https://www.city-journal.org/building-costs-are-high-in-red-states-too - I chose some countries from the SkyscraperCity thread and tried to find prices for the longest recent projects
Alon Levy
01:33:42
Marc: most of these reference prices are based on labor agreements (and New York is heavily unionized), or materials prices - the competition is more about quality than about price.
Connor Harris
01:35:01
@Eric: Purple Line construction in LA had a big segment of Wilshire closed when I was there in August 2021
Mike Lindblom
01:35:27
The CEO of Tutor-Perini, a huge construction firm based in California, often boasts that only a half-dozen U.S. companies are capable of building megaprojects, such as high speed rail and road tunnels, so they can charge lucrative bid prices. In that climate it's hard to use reference pricing as an ideal guide to final construction price.
Ryland Lu
01:35:37
Connor: I believe tunnel is tbm stations are cut and cover for Purple Line (stations being cut and cover is an issue elsewhere)
Marc Grégoire
01:35:52
Looking internationally, are projects generally awarded to contractors on the basis of lowest conforming bid, or some other approach?
Patrick Spence
01:35:57
In LA, they closed Wilshire to briefly deck over the boulevard where cut and cover stations are being build, but it was 1. brief and 2. geographically limited.
Patrick Spence
01:36:33
They didn't leave Wilshire closed for 18 months to fit out a full station, for example (I don't know if that's ever done, but....)
Eric Goldwyn
01:36:49
@marc grégoire: it varies, but low cost bidding is dominant in italy or spain, two of the lower cost countries
Eric Goldwyn
01:36:57
low cost IS NOT!
Jaime Garmendia
01:37:17
@Mike we are seeing that writ small in the Boston construction market. too many big projects, not enough firms financially capable of performance, rapidly inflating bids because the few who can compete know the market is saturated and they can name their price
Eric Goldwyn
01:37:35
@patrick, is this during covid? we followed that and that gave me some hope!
Connor Harris
01:37:56
@Mike Lindblom: and yet the planned unit costs in CAHSR's business plan were generally pretty reasonable; the issue was overbuilding (e.g. Palmdale detour, excessively tall overpasses)
Patrick Spence
01:38:19
Not sure. I'm not CA based so I only know casually. Now if you want to ask me about WMATA incompetence...
Eric Goldwyn
01:39:10
@patrick, i believe the example you referenced is a covid-era decision that advanced the construction schedule by 6 months.
Alon Levy
01:39:16
Mike: hire foreign firms, like Turkish contractors; Sweden's deliberately expanding its horizons beyond Skanska and a handful of other locals.
Ryland Lu
01:39:44
If you want to know the philosophy behind us public participation.... https://en.wikipedia.org/wiki/Advocacy_planning
Eric Goldwyn
01:39:54
the MBTA did something similar for refurbishing the green line. They moved from weekend work to a full shutdowns, i believe, and were able to do a years worth of work in a month
Miklos Horvath
01:40:06
While this discussion is v. interesting for larger transit projects and the inability of N.America (generally) to get its act together. A bigger concern of mine is at a more super local level where here in the city of Ottawa, city staff do not even know the average cost of laying a panel of concrete for a sidewalk - if we are unable to come up with that basic metric (or be willing to share) what hope do we have to identify and control costs on large projects???
Alon Levy
01:40:31
Marc: it's rare to do lowest-cost bidding - bidding is by a combo of cost and a technical score, with the technical score having 50% of the weight (Sweden), 50-60% (France), 70% (Spain)...
Alon Levy
01:40:53
[Spain is technically 50% technical, but 20% is speed and speed is elsewhere part of the technical score.]
Connor Harris
01:42:04
@All: what's the process for blacklisting bad contractors in IT/TR/SE and other low-cost countries?
Alon Levy
01:42:14
Miklos: this is where having bigger cities available for public-sector consulting is valuable - reference prices in Toronto could then inform Ottawa's process.
Alon Levy
01:43:13
Connor: Sweden just has a technical scoring process for this, rather than a debarment process.
Eric Goldwyn
01:44:25
Connor: I know for SAS phase 1, Tutor-Perini was a low bidder for one contract and the MTA just said no.
Connor Harris
01:44:43
Do technical scores include contractor history, then?
Eric Goldwyn
01:45:05
Connor: in some places, yes
Marc Grégoire
01:52:25
Very interesting. Pure lowest-bidder seems like an unwise approach, but how technical scores are calculated in different jurisdictions is something I know very little about.
Eric Goldwyn
01:53:38
@marc, yes. calibrating the formula is important. In the US some places do have best value bidding, but, i believe, cost is always at least 70% of the weight, which means it's low bid by another name
Yangbo Du
01:53:45
How much might a faster pace or larger throughput of construction reduce costs? There might be a premium as happened in Mainland China, though costs may be lower in the longer run because of reduced risk.
Alon Levy
01:54:01
Marc: in Sweden one of the factors that goes in is lifecycle costs of operations and maintenance (and one of the possible contracting regimes is to make that the *only* technical determinant but that's usually only for less complex projects than subway tunneling).
Alon Levy
01:54:46
Yangbo: I can't tell - New York's historic cost explosion happened during a time of rapid construction.
Marc Grégoire
01:55:45
In Canada, I've worked on projects with pre-qualification for contractors, but not with detailed technical scores of the bids.
Yangbo Du
01:56:11
Similar pattern as that of U.S. nuclear power plants during rapid construction era of the 1970s-1980s (bespoke designs, not standard as in French or Korean)
Egemen Sentin
01:57:11
WRT Istanbul - the works for the Marmaray line stopped for eight years due to archaeological work that needed to be carried out. There is no disregard for history when it comes to projects like this, but we are not Rome either.
Alon Levy
01:57:25
Marc: in New York, pre-qualification backfires through making it harder for new (e.g. foreign) contractors to get in.
Nathan Davidowicz
02:00:55
In Vancouver BC costs per km are high, however we get inferior stations ( compared to Ontario and Quebec ) in order to reduce cost.
Alon Levy
02:02:42
Nathan: yeah, the Canada Line was built using a lot of cost-saving techniques, some good (cut-and-cover under Cambie), some daft (undersize stations - it's cut-and-cover, station size isn't a big cost driver); and now Broadway is considerably more expensive.
Ándres Felipe Cardona
02:05:34
What is your suggestion about the procurement arrangement that should be used in Metro/Masive transtit projects?: Design, built, operate, maintain? Design apart from construction? operation different actor that builder?
Connor Harris
02:06:15
@All: pure surmise, but do lower-cost countries in Europe have a lower ratio of private sector/public sector salaries that might reduce the incentive for engineers to leave the public sector?
Alon Levy
02:07:10
Ándres: I think design and construction should be kept apart (or combined the Turkish way: 60% design is one contract, going from 60% to 100% and then doing construction is another); it's important to keep expertise in the public sector and not just outsourcing the decisions or the risk to the private sector.
Connor Harris
02:07:51
Civil engineering salaries in the US (esp. public sector) are generally quite low at least by comparison with other engineering fields, and at least one US engineer has complained to me that they get less social respect than lawyers while it's the other way around in Europe
Alon Levy
02:08:00
Connor: yes, and in Spain ADIF makes sure to pay wages above market rate to make sure to get the best engineers.
Alon Levy
02:08:48
And yes, the part where in Spain the engineer is next to God and in the US and UK the engineer is told to lower their head in the presence of a generalist politico or lawyer matters.
Eric Goldwyn
02:09:25
@chase: Fair. I dont know anything about the army corps of engineers. I was trying to navigate their site a while back and every single link i clicked on was broken, which maybe a not a good omen!
Ryland Lu
02:09:38
Speaking of right-sizing stations is fruin level-of-service used to evaluate station capacity in low-cost countries or is it a different standard? Feel like sometimes we might be assuming too much space per person
Ryland Lu
02:10:25
Fruin= pedestrian level-of-service standard that used in anglosphere
Ryland Lu
02:10:51
https://books.google.com/books/about/Pedestrian_Planning_and_Design.html?id=AydSAAAAMAAJ
Yangbo Du
02:11:06
@Ryland Korean costs are low with stations handling 200m trains, as you probably covered already in your evaluation of what the States can learn from East Asia.
Alon Levy
02:11:26
Ryland: my understanding from reading Dutch (maybe also other European, I forget) and Chinese studies is that the assumptions are the same as in the US.
Ryland Lu
02:11:31
Talking about pedestrian capacity
Eric Goldwyn
02:11:40
@ryland i have tried to find the fruin station design guidlines for a long time!
Alon Levy
02:13:27
82 peds/minute/meter is what I've seen in not-America too, maybe it's the same reference and maybe it's different research arriving at the same conclusion, not sure.
Yangbo Du
02:13:47
For one, start strengthening downtowns. Suburban Europe is not that much less auto-oriented than suburban U.S.
Denis Agar
02:15:45
Re engineer pay: Starting salary for a senior engineer at the provincial ministry that's building metro rail in Vancouver BC: $62,000 USD. Average cost of home: $1.1m USD.
Chase Matthew
02:17:47
In Italy and Turkey, does the electric/gas/water utility pay for relocation or does the transit project? Do they charge actual cost or a profit-making costs for the utility work?
Marc Grégoire
02:18:18
@Andres My opinion about procurement arrangement in general for civil projects: DBOM is best, if you choose the private partner carefully and if it's feasible to have the operations reasonably separate from the rest of the transit system. Design-Build works well (especially for speed) if you can define very clearly what the end product is required to be. If there's a lot of uncertainty about what is desired, then it's best to go with separate design and bid.
Alon Levy
02:18:27
Chase: Italy specifically has excellent utility mapping, not the 20 years out of date mapping of American or Dutch cities.
Alon Levy
02:18:41
So utility relocation costs (dominated by the surprise factor in the US) are low.
Ryland Lu
02:18:49
Alon: wouldn't be surprised if they're also referencing fruin. Its got a pretty established reputation.Eric: That's a a google books link have a pdf somewhere on my computer that can send