Report: Why U.S. Transit Projects Cost So Much

A report released by the Transit Costs Project at the Marron Institute of Urban Management at NYU assesses the reasons behind the high costs and reduced productivity of transit projects.

Looking at New York City’s Second Avenue Subway project, the research team identified three primary factors that affect project costs: physical structures, labor, and procurement and soft costs. A lack of standardization, redundancy and overstaffing, a “pervasive culture of secrecy” and insufficient competition in the procurement sector all contributed to higher costs for the New York project than in other parts of the world.

Ultimately, lower costs can be achieved by implementing governance, civil service, procurement, and transparency reforms and using them to reduce the extent of overengineering and local extraction.

According to the report, “Physical geography, archaeology, and geology also drive costs, but in the cases we have studied, low-cost countries have figured out how to deliver projects under challenging geological, seismic, and archaeological conditions.”

The report’s authors conclude that “It is possible to realign institutions and norms in American cities to build urban rail at costs that approach what we have found in low-cost examples like Spain, Italy, Turkey, and Sweden and medium-cost ones in France. We believe the most important development should be to empower entities that build transit projects to realign regulations and practices with what is found across as wide a net as possible of low-cost cities.”