Why Does Transit Cost So Much to Build in the U.S.?

With Manhattan's new Second Avenue subway expected to cost five times as much as comparable projects in Europe and Asia, Stephen Smith looks to transit-construction practices from abroad for lessons on how to contain costs in America.

1 minute read

August 27, 2012, 11:00 AM PDT

By Jonathan Nettler @nettsj


New York City is not alone in paying outrageous prices for new rail infrastructure. As Smith notes, the "$151 billion master plan for
basic high-speed rail service in the Northeast corridor is more
expensive than Japan's planned magnetic levitating train line
between Tokyo and Osaka, most of which is to be buried deep
underground, with tunnels through the Japan Alps and beneath its
densest cities."

So what makes transit so expensive to build in the U.S. compared with developed cities in Europe and Asia? Smith looks to Spain, which "has the most
dynamic tunneling industry in the world and the lowest costs," for some lessons. "In
2003, Metro de Madrid Chief Executive Officer Manuel Melis
Maynar wrote a list describing the practices he used to design
the system's latest expansion. The don't-do list, unfortunately,
reads like a winning U.S. transit-construction bingo card."

Among the obstacles to reducing costs in the U.S. identified by Smith are the slow pace of construction, complex and outdated legal requirements and procurement rules, conflicts of interest, and a lack of effective incentives and oversight.

Sunday, August 26, 2012 in Bloomberg View

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