Strange question, maybe? I'm an expat living in Romania and I always appreciate and marvel at the efficiency of Romania to have/enable providers to sell an unlimited 4G mobile service plan, that (for me) also works in the middle of nowhere here in RO for 5 euros per month. Thoughts? BTW, it makes buying a service plan in KS, USA that barely works in various areas feel a bit like a scam...
Why U.S. Infrastructure Costs So Much
61–70 of 272 posts
Re: Why U.S. Infrastructure Costs So Much
#62Earlier quoted context omitted.
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.
I think it's a mistake to think of european unions and american unions as "the same thing". Relationships with unions in the US seem much more adversarial than there, on average. As you say, there are politics, labor relations, etc. in europe too - I wonder if they are just better at cooperating on this sort of project for some reason?
What? This could only be so naively said by someone who has never lived in a heavily prop labor socialist country like France. Les grèves are terribly adversarial and a near constant aspect of labor negotiations.
The only way they could be considered better, in the way you imply, is that the unions are considered something to negotiate with instead of something to destroy.
Re: Why U.S. Infrastructure Costs So Much
#63Earlier quoted context omitted.
> Why aren't contracts to build the projects tightly written to avoid cost ballooning? Because no legitimate construction firm will take on a project where they are saddled with 100% liability for overruns. Not without very generously padding their estimated costs, that is. Which will make them lose the initial bid. A fly-by-night operator may want to take that project, and when things go sour, they'll leave you with…
One alternative would be to have a public works department which does the work itself. It would hire people, plan, write specs, buy or lease equipment, buy materials, do the work. That, however, would be socialism, so it can't be done, even though it's done on a smaller scale in every US city for issues starting at road repair and going on up.
I think there's a real argument for the efficiency of outsourcing many aspects of public works projects. But I think you make a good point, that doing things in-house is sometimes the right move. Obviously this applies to more than turnpikes :)
Re: Why U.S. Infrastructure Costs So Much
#64I 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.
> 1. Red tape & public "input"
> [...] and bureaucrats and all of that.
On a recent episode of the Ezra Klein show, Jerusalem Demsas argued that part of the problem is that the bureaucrats in the US are too constrained in their powers, so e.g. when weighing an infrastructure project against wildlife protection laws, it's not a bureaucratic organisation making a final decision on how to proceed with minimal impact, but it's private organised interest groups litigating without any limits on re-litigation, and a ruling that does not necessarily weigh the public interest of having projects proceeding towards completion.
Re: Why U.S. Infrastructure Costs So Much
#65I am of the opinion that continuing to build out all these long 'runs' of infrastructure to serve a even more spread out populace is a dead end. Where I live we spent tens of billions expanding highway infrastructure, and it has not improved the lives of anyone meaningfully, traffic is as bad as its ever been. We need to spend more money creating better metropolitan areas that people want to live in, rather than usin…
The particular project highlighted in the article isn't one of those, though. Somerville (one of the cities reached by the extension) has the highest population density in the state of Massachusetts, and I think it's something like top 20 in the United States by that metric. This is not an "even more spread out populace", it's linking a reasonably dense bedroom community to a regional commercial hub.
Re: Why U.S. Infrastructure Costs So Much
#66Thirty years ago when you needed to install new computers in an office I remember it took us weeks to get the cable (Ethernet) installed because one contractor had to pull the cable and cut it at each workstation, another contractor had to come and put the connector on the cable and yet another had to come and plug the cable into the machine. Believe me we were tempted to sneak in one weekend and do the whole thing o…
In real life it’s even worse. None of the suppliers actually show up, they ramp up the price and deliver a failing product. Then they all blame the previous guy.
Re: Why U.S. Infrastructure Costs So Much
#67Earlier quoted context omitted.
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.
> 1. Red tape & public "input" > [...] and bureaucrats and all of that. On a recent episode of the Ezra Klein show, Jerusalem Demsas argued that part of the problem is that the bureaucrats in the US are too constrained in their powers, so e.g. when weighing an infrastructure project against wildlife protection laws, it's not a bureaucratic organisation making a final decision on how to proceed with minimal impact, bu…
I don't do podcasts, but I read that that was a really good one, and everything she writes about housing is fantastic.
Re: Why U.S. Infrastructure Costs So Much
#68Why 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…
Firm fixed contracts seem like the way to go, until you try it. What happens is you get a bunch of contractors in a bidding war trying to undercut each other until the actual bid is below cost. That's not sustainable so what happens then? The winner will cut every possible corner to try to make a profit margin and read the contract in the narrowest way possible so they can hit the government with a fat change order.…
Maybe have the military operate as a contractor as well and any 'profits' they'd make go towards the general federal budget? At the least it's then a bid by an open party with incentives that should be aligned to public service to compare all the other bids against.
Re: Why U.S. Infrastructure Costs So Much
#69I 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.
My broad impression is that in the EU and the US, a given project is a "meal" that all the interests involved will take a cut out of.
But in the EU or elsewhere, the "cut" the interests will take is just financial, the project will be designed for cost-efficiency by competent architects and engineers and it's just that the different interests will be paid off with money to make things happen.
In the US, the spread-out state and administrative structure results in a situation where each interest gets it's cut through its ability to make some small change or demand some particular process. A lot of this involves a lot of adversarial relations, some of them intended to stop corruption but which actually result inefficiency and corruption (complex bidding processes legal repercussions for failure to adhere to bid etc. etc.).
California spending $3 billion planning ("planning") a high speed rail system is good example. A lot of that involved buying land whose value had inflated.
Re: Why U.S. Infrastructure Costs So Much
#70Why 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…
Moving away from cost-plus contract funding is something that is needed but is an enormous fight. Every government contractor loves cost-plus. Bid low on cost to get the contract then just keep amending the contract with added cost.
I agree that all government contracts should be fixed bid. It is wholly the contractor's responsibility to determine if they can be profitable on the contract or not. We should not be on the hook for added cost.