November 11th, 2009
Someone’s got some ‘xplaining to do: More transit cost overruns
By Jacob Larsen // 5 Comments
Image from kevincrumbs on Flickr Creative Commons
Only one day after the STM announced that the projected cost of replacing its ageing fleet of Metro cars will likely double, the AMT today made a similar confession.
The best case scenario for the AMT - for day-to-day maintenance and new investments - is that costs will be 30% higher than originally predicted. In the case of the Lucien L'Allier renovation, the real cost will likely be 400% higher than expected.
Of course, this situation is not new. The metro extension to Laval cost about four times as much as predicted. And these wild miscalculations are not limited to transit projects: the Auditor General estimated that the cost for the proposed Turcot reconstruction could go from $1.5 to $3 billion. (Although that project may be on ice for a while.)
What explains these astronomical increases? For the metro cars, I imagine it has a lot to do with the closed bidding process, which initially handed the contract to Bombardier, only adding Alstom as a partner in a consortium after intervention from the courts. But the AMT's cost overruns also stem from regular operating costs, not just major new investments.
Certainly, the consistency with which transit project costs are underestimated hurts the credibility of these organizations, and makes arguing for new transit investments more difficult. However, this is a worldwide phenomenon: Danish researchers revealed that the average cost escalation for new rail projects is 45%; for new road projects, it's 20%.
Should we just grin and bear it, and chuckle to ourselves? Is there anything to be gained from putting up a fight, when better suburban transit may be the city's greatest need?
Loading ...
Facebook
Twitter!
stumbleupon
Reddit
TechnoratiComments
Neither the author nor Spacing necessarily agree with the comments posted below. Spacing reserves the right to edit or delete comments entirely. See our Comment Policy.
Don't know if this makes me chuckle... more like... grunt in disgust. This gives better transit solutions a bad name. And no one can tell me it has nothing to do with shady bidding processes, corrupt politicians and greedy contractors. The only people making good money in this recession economy is the constructions sector. And it's easy enough to see why.
Cost estimates cannot possible be off by so much (public funds!!) every single time we decide to give huge infrastructure projects the go-ahead. Someone is profiting and public enquiries should be made every time to see who's unfairly pocketing my tax dollars!
Hello NEU, I agree with the general principal and am myself no fan of urban sprawl (and all its inherent inefficiencies). Ironic then that development of suburbs can be encouraged by better transit within the city core, which makes it easier for people to live outside of it.
What the city needs most is affordable multi-story housing "in" the city core, and no I don't just mean 200,000$ condos...
Whoa -- the Gazette article cited above merely says the contract has changed to include more train cars. That is a good thing.
Has the price/car shot up dramatically?
No, they merely want to buy more métro trains to be able to replace not only the MR-63s but the later 1970s model and also have enough spare trains to cover any eventual métro extensions.
There's nothing particularly scandalous about increased public investment in clean, already fully-electric transportation during a time of intense demand-destruction -- this is probably the best time to launch new capital spending in métro infrastructure -- unless you are a big fan of Milton Friedman. In which case, why are we bothering?
PS The letter on cost overruns is now available: http://bit.ly/2iypEC
Well, obviously, at this point in time we cannot rule out corruption as a major reason behind the escalation in final costs.
"better suburban transit may be the city’s greatest need"
Well, I would disagree there. A city's greatest need is probably eliminating its need for suburbs.
This topic is addressed in a letter by Richard Bergeron which I will post on my website post haste.
Comment by NEUmontréal
November 11, 2009 | 10:14 am