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Why We Can’t Figure Out Why Infrastructure Is So Expensive

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Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#71
post #43

Earlier quoted context omitted.

The further you are removed from "other people" with regards to "other people's money", the easier it is to waste/pocket/embezzle. Fixing that problem would go a long way.

The solution to that problem in many places is currently to have lists of approved suppliers.

And once you're on the list it's basically a license to print money so the last thing you want is changes to the system.

Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#72

Earlier quoted context omitted.

The California High Speed Rail was also corruption. It's all over everywhere, because nobody is accountable for it, except the people over-charging, while simultaneously pointing out that they are taking all the liability when things go wrong (and someone actually tries to prosecute).

From my conversations with people who worked on HSR - a lot of the problem was we outsourced the decisions to expensive consulting agencies, and those agencies saw the project as a place to stash their most useless staff members. So basically we had a bunch of very expensive idiots running an outsourced project. If they had kept the whole project in house, we'd have the initial operating segment already. See also, CE…

I think rather than generally blaming "corruption", nowadays I prefer to blame "lack of competence", although there is a lot of overlap.

That's because I see a lot of bad decisions -- stupidity over greed. It only takes a few bad decisions made by people with power to completely sink a project. Now imagine building an airport or a subway. How many of these do we build? They are basically one off projects. Following a manual to repave a road doesn't require much competence, as it's a project that's done over and over again -- but doing a one-off project with unique challenges -- that requires serious competence.

And lack of competence is a much harder problem to solve than corruption. The incompetent person doesn't admit or know they are incompetent. The incompetent person can't be scared with lawsuits or investigations to become competent. No amount of sunshine will help. The only solution is to get rid of the incompetent person and put someone competent in charge. But that doesn't work at the national level -- if there is a shortage of incompetent people, or if our hiring systems aren't able to hire the competent person. So the solutions are very long term and painful:

* change how governments hire and promote staff to focus more on competence and less on passive traits like seniority/diversity/etc.

* reduce the need for competence by focusing on standardized projects built in a steady cadence. For subways, make every subway the same, or pick just 2 variants, and develop a team of people with experience working on these all across the country, with standardized best practices and a pool of skilled workers who have experience working on these projects.

All of that requires some pretty radical reforms of how our projects are funded and what role cities have to play in building them, as well as upsetting a lot of government unions.

Then there is the issue of Federalism. The Swiss have a highly efficient infrastructure system and have strong federalism, as does Germany, but you're not in a situation where each state has completely different zoning/eminent domain laws, or separate licensing so an engineer in one state may not be able to even work in another. This makes it harder for us to adopt more standardized practices across states for big infrastructure projects as well as a national pool of experts that can go state to state and build standardized projects.

Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#74
The author briefly touched on how it's also expensive in countries with similar law-systems like Canada and Australia. It may just be that our laws make it a lot easier for contractors to jack up government contracts.

My personal opinion is that managers and regulators in Europe and South Korea are a lot more efficient because they have a lot more freedom to apply common sense and personal judgement without fear of getting sued over a stupid technicality in a contract dispute.

Whereas in US & Canada it's common for companies to sue the government over a small/irrelevant technicality and win a big settlement.

Thus regulators and contractors interpret rules as literally as possible in order to avoid this legal confrontation and I think it's precisely this that drastically reduces the construction efficiency of public projects.

One thing that surprised me in Germany, both in Munich and Berlin was that while the central train & subway stations were quite grandiose (Hauptbahnhof's interior looks like something out of Halo), the stations in the periphery of the city were surprisingly quite "thin and light", built frugally with thin weather shielding and a minimal amount of materials.

Whereas in Toronto it's the opposite. We built a $6Billion subway extension, with 6 stations at a billion each, all overbuilt in exactly the same standard. Only half of them actually have any population within walking distance and one is a complete ghost-town. The reason why this happened was because treating all 6 equally was safe and no one complained.

It's not hard to see how you can provide the same service for 1/4 of the price.

Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#75

I’m surprised by the cynicism here. Working in software we know that high complexity projects are _really_ hard to estimate. Hofstadter's Law says it always takes longer than you expect, even when you take into account Hofstadter's Law. Too many unknown unknowns. If the projects were broken down into smaller chunks, the incremental costs would be better understood as the project progressed.

Construction generally is not doing a brand new greenfield project. Experienced web developers can put together another website for pretty close to budget. As soon as you deviate from the framework and tools that the experienced web developer knows well though estimates go out the window.

Big construction projects have a lot of well understood parts. Sometimes you get unexpected rocks or something, but for the most some countries have done much better than others at controlling costs in projects of similar complexity which suggests that the difference isn't because it is hard to estimate.

Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#76

Let alone cost, one thing that boggles my mind is how slow infrastructure building is in the US. In our area, a multi-billion dollar freeway or subway line will often be constructed with 5 days of a single 8-hour shift. I get that certain work needs to be done at night, but surely the work sites shouldn't sit empty for 16 hours a day! Just think about the cost of equipment being rented, the overhead that is on salary…

Same principle applies here as with any software development effort. There are some natural bottlenecks that can't be avoided/parallelized (for e.g. waiting for a layer of asphalt to dry). Further, more people doing a thing doesn't mean it will get done faster. You have to contend with overhead of planning, context-switching and handover overhead between workers leaving/starting shifts etc. etc.

Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#77
There is a saying: it’s good to work on your weaknesses, but don’t dwell on them because otherwise you’ll spend all your time doing things you’re bad at.

If we’re bad at centrally planned public infrastructure, we should just do less of it, and focus more on the things we’re good at doing.

Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#79

Kind of weird to use a picture of the East Side Access project in New York as the lede. New York is a whole different case from the rest of the country. We do know why infrastructure in New York is so absurdly expensive. Outright theft and fraud is a big culprit: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-... > The budget showed that 900 workers were being paid to dig caverns for the platforms as par…

>> “All we knew is they were each being paid about $1,000 every day.” Assuming a 5-day work week, $270,000 a year is a crazy amount, isn’t it?

Not quite that crazy. There is a lot of overhead that comes out of that 1000/day. Medical benefits, retirement, the accountant to track their pay - they are still make 6 figures for sure, but it isn't 270k/year.

Re: Why We Can’t Figure Out Why Infrastructure Is So Expensive

#80

Earlier quoted context omitted.

In China the purpose of infrastructure projects is to get infrastructure. In the US the purpose of infrastructure projects is to enrich everyone associated with the project.

That simply isn’t true at all. There are plenty of unused or underused highways and bridges in China that made a few red families lots of money. It’s fascinating to me that some people think corruption in China is lower than the USA. Not even the Chinese would make such a claim.

I did not at all claim there is no corruption. But look at your own quote:

> There are plenty of [...] highways and bridges in China

I think we agree that the infrastructure does get built!

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