or its for similar reasons rewriting existing software can take so much time and money. It's way easier to build a subway (or software) when you don't have to worry about the existing needs of the customer or people who live in or around the area.
Why U.S. Infrastructure Costs So Much
21–30 of 272 posts
Re: Why U.S. Infrastructure Costs So Much
#22I was a management consultant ages ago and worked on large capital projects. In my experience (as the article mentions) it was a mix of: 1. Red tape & public "input" 2. Layers of contractors and subcontractors, each taking their slice 3. No real incentives for governments to be cost sensitive. Usually capital projects last well into the next administration. 4. Too many cooks in the kitchen and consultations
IMO #2 takes the cake (rest is all icing)
In my experience with construction projects, legal costs and liabilities take the cake. Once something is in court, there is zero telling how long and how much money it takes to resolve.
Re: Why U.S. Infrastructure Costs So Much
#23Once the US had railroad companies that laid rail at a mile per day (mostly crap rail, but enough to count), that was when the incentives were all aligned, and a huge amount of resources were mobilized and ready to deploy.
Once the US pulled of the completely absurd task of putting a man on the moon and then returning him safely to earth, in less than a decade. All the incentives were aligned, it had public support, and a huge amount of resources were mobilized and ready to deploy.
We're not deploying huge resources on our infrastructure projects, we're piecemealing them. I've got a branch rail line going in at the end of my street. [1] The public input/planning process went on for years, and only now are they starting to relocate utilities, put up fences, etc. There's no one entity in charge of all the layers of the project, it's all hired contractors and inter-agency cooperation. It will be done, likely in 3 years or so. This line is a total of about 9 miles long for about $945 Million.
The worst part about it for me is the insidious nature of the funding they're using. They're doing "Tax Increment Financing" which means that any increase in property tax revenues theoretically caused by the "improvement" of my house go to pay off the construction bonds.
Let's say there is NO improvement, but inflation doubles taxes in the next decade. The town now gets the same dollar amount, but half of the funding it used to get, and the rest goes to the bond holders. This will strangle our schools which depend on local real estate taxes.
[1] - https://en.wikipedia.org/wiki/West_Lake_Corridor
PS: Just across the state line is a defunct Country Club, which is in close enough to the station to qualify for "TIF" improvements, and the husband of the local State Representative pushing for the project, just happens to be the a real estate developer interested in said property.
Re: Why U.S. Infrastructure Costs So Much
#24Earlier quoted context omitted.
Local government officials have no real incentive to get the most for their money. They "get the job done", but I really doubt they are anywhere close to efficient
I think the mayor of NYC has a strong incentive to get credit for improving their subway system.
Perhaps surprisingly, the NYC subway is run by the MTA, over which the mayor has no control; it's run by the state government up in Albany.
Re: Why U.S. Infrastructure Costs So Much
#25I was a management consultant ages ago and worked on large capital projects. In my experience (as the article mentions) it was a mix of: 1. Red tape & public "input" 2. Layers of contractors and subcontractors, each taking their slice 3. No real incentives for governments to be cost sensitive. Usually capital projects last well into the next administration. 4. Too many cooks in the kitchen and consultations
I have seen some public transportation work up close in the USA -- "me first" and competition between different teams ate up quite a bit of the (expensive) time.. lots of very competent, skilled people and also quite cynical and profit-seeking management. The actions of management were sometimes directly contradictory to recommendations by hard-working staff. Worse, management that tried to get things done quickly were pushed out by others who were better at looking good (or something else I dont know about).
The old expression "we have the worst system in the world, except for all the others" .. comes to mind
edit- I would like to point to NORESCO in particular as a sponge-like entity with a long history of failed, expensive projects and a long pipeline of new funding, based on what I saw with my own eyes.
Re: Why U.S. Infrastructure Costs So Much
#26Once the US had railroad companies that laid rail at a mile per day (mostly crap rail, but enough to count), that was when the incentives were all aligned, and a huge amount of resources were mobilized and ready to deploy. Once the US pulled of the completely absurd task of putting a man on the moon and then returning him safely to earth, in less than a decade. All the incentives were aligned, it had public support,…
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Re: Why U.S. Infrastructure Costs So Much
#27I was a management consultant ages ago and worked on large capital projects. In my experience (as the article mentions) it was a mix of: 1. Red tape & public "input" 2. Layers of contractors and subcontractors, each taking their slice 3. No real incentives for governments to be cost sensitive. Usually capital projects last well into the next administration. 4. Too many cooks in the kitchen and consultations
IMO #2 takes the cake (rest is all icing)
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Re: Why U.S. Infrastructure Costs So Much
#28Why aren't contracts to build the projects tightly written to avoid cost ballooning? When a service is to be provided at a certain cost, it should be provided at certain cost. Some contingencies should be built in (if something gets discovered that was unexpected) but how on earth does every municipal project seem to have so much invested in budget oversight and contractors overbilling or needing overtime to make thi…
This is what I'm also wondering. What is the point of making a contract in the first place if the price quoted is not binding? If the provider needs more material or manpower or whatever than expected, then it should be their fucking problem and not the clients. The possibility of unexpected stuff happening should, of course, also be taken into account in the initial price quote since the provider should be much bett…
The problem when dealing with government or public works is that the provider simply isn't better at estimating that probability, since they aren't empowered to bulldoze ahead.
The contractor can accurately price in (and insure against) technical risks like the risk of accidentally striking a cable while digging, and they can mitigate this as well (looking at the quality of cable mapping data, using detectors etc.)
What the contractor can't factor in is all the (local) government politics and bureaucracy. Where things fall on the financial year calendar, whether they will have to spend the money before or after April, whether they will have to pause works because a resident legally challenges the works, whether the client has even asked for the right thing, or if it will emerge while planning the work that they have made major errors etc.
When dealing with a well-specified, fixed-scope piece of work, you are right - the provider should eat that. When dealing with an uninformed non-expert customer (i.e. most public sector or government contracts), nobody in their right mind would take on that risk, except some of the big government outsourcing contractors, who would all quote insane prices based on past "actual costs" after factoring in all the nonsense from previous work.
Re: Why U.S. Infrastructure Costs So Much
#29I was a management consultant ages ago and worked on large capital projects. In my experience (as the article mentions) it was a mix of: 1. Red tape & public "input" 2. Layers of contractors and subcontractors, each taking their slice 3. No real incentives for governments to be cost sensitive. Usually capital projects last well into the next administration. 4. Too many cooks in the kitchen and consultations
These are all things, but they're things in other countries, too. France has strong unions and subcontractors and bureaucrats and all of that. And yet it costs less there.
Re: Why U.S. Infrastructure Costs So Much
#30I was a management consultant ages ago and worked on large capital projects. In my experience (as the article mentions) it was a mix of: 1. Red tape & public "input" 2. Layers of contractors and subcontractors, each taking their slice 3. No real incentives for governments to be cost sensitive. Usually capital projects last well into the next administration. 4. Too many cooks in the kitchen and consultations
IMO #2 takes the cake (rest is all icing)
I'm leaning towards #3. There just doesn't seem to be any real incentive for governments to look for cost savings, like it's all Monopoly money.