In my post on a Danny Westneat column describing Bent Flyvbjerg's finding that cost over-runs on megaprojects can be best explained by assuming that planners and politicians are lying to us, I left one tactical question undiscussed.
Those of us who have been around for a while, or are just fairly alert, have figured out that politicians' promises are not to be trusted on megaprojects. And most of us have also drawn another conclusion about the way "mainstream" journalists cover those megaprojects. Westneat even gives us a little hint at the end of his column.
Flyvbjerg says that's the way it often goes. He also has all sorts of ideas for how to make this process more honest and accurate, most involving outside scrutiny. Suffice to say, that route would drive up the estimated costs of most projects dramatically.
I wondered, when I read them: If we knew the truth, would we accomplish anything at all?
Or is it better to be lied to?
What I conclude from that ending question is that Westneat would not be, shall we say, aggressive, in examining the costs and benefits of projects that he supports. And I have come to the unpleasant conclusion that Westneat is typical, that most "mainstream" journalists would do the same thing. For example, almost all "mainstream" journalists favor rail transit projects. (Perhaps because few of them had toy trains as children. Perhaps because they think that other people should ride those trains.) And so those journalists will pass on to us, without criticism, estimates of costs and benefits on rail transit that they have many reasons to doubt. And when those estimates prove to be false, those same journalists will not hold the politicians who made them responsible.
Because, as Westneat believes, we might not accomplish anything unless we are lied to.
But many of us have caught on to this game; we no longer believe the estimates from politicians — or from journalists. And so, when we see estimates from either, we adjust them. For example, I assume that rail transit projects will cost about twice as much as promised, and will carry about half as many passengers as promised. (Which means that almost none of them, at least in the United States, make sense.) On the other hand, I assume that ordinary road projects — projects that do not require, for example, immense tunnels — will have costs only ten or twenty percent more than estimates — and will carry at least as many cars as promised.
Have you developed your own correction factors for these projects? And, if so, what are they?
Cross posted at Jim Miller on Politics.
(In my opinion, we would accomplish just as much, possibly more, if we had truthful estimates on projects. But we would build different projects, and the projects would have less gold plate.
Game theorists will notice that increased skepticism on the part of citizens may lead to increased lying by politicians and planners. Since many of us are making those adjustments, the lies may get bigger in order to sell the projects. And then citizens will become even more skeptical, which may lead to even bigger lies. I am not sure whether there is formal equilibrium solution to this, and my game theory is far too rusty to attempt to find one — especially on a sunny Friday afternoon. But if you want to tackle this problem, please let me know about your results, if any.)
Posted by Jim Miller at May 15, 2009 03:44 PM | Email ThisWhat are you talking about? Both the Times and PI reporting (before they turned into a website) is/was characterized widely by rail proponents as blatantly against light rail and Sound Transit.
Posted by: John Jensen on May 15, 2009 04:01 PMWhy? If the project is accurately estimated, the large cost may show it to be infeasible, and the consultant is then only paid the typical pittance budgeted by the owner for the estimate.
However, if it's lowballed, it looks feasible, and is actually undertaken by the owning agency. The consultant is then hired for the vastly bigger scope of actually designing the project, recouping his losses suffered while working for that pittance, and additionally cashing in on administration fees for the length of the construction activity.
So it's against the consultant's interest to accurately estimate the project, greatly raising the probability of the initial cost lowballing.
It's also in the interest of the public agency to launch a megaproject regardless of cost. Once launched, it almost invariably continues to completion, regardless of cost - how many such megaprojects have been in the news for being abandoned, besides WPPS? Because the agency is enabled to expand its staff for and beyond the duration of the project, and in the bureaucratic world, expanding staff is a win. And the cash flow is useful in setting up a beholden constituency, worth many votes in future re-election battles.
Posted by: Insufficiently Sensitive on May 15, 2009 04:13 PMThere is a difference between capacity and use. It's almost impossible to underestimate the capacity of either rail or a roads project.
Posted by: John Jensen on May 15, 2009 04:56 PMProject managers that I know in the private sector always seem to be right on the money with their projects. Why can't gumamit be as close? Or at least in the ballpark? They have endless resources (data bases, history of past projects, a large contributing workforce) that the private sector doesn't have.
The only conclusion a rational human can have is that they are a bunch of (#1) incompetents or (#2) lairs.
Your opinion is your own. But me - I'm going with "liars".
Posted by: G Jiggy on May 15, 2009 05:18 PMWrong.
Have you ever seen then little black tubes going across the street. They read the number of cars or trucks cross with in a 24 hr period.
Told tell me they don't know.
Simple counting of people for say a few days will set up your numbers.
Posted by: Medic/Vet on May 15, 2009 05:40 PMI suck. Sleep time.
Posted by: Medic/Vet on May 15, 2009 05:43 PMUnless the OP is arguing that traffic congestion doesn't exist, then I believe he was speaking about roads being built to capacity. With rail projects, it's just as easy to calculate the capacity of a line.
Actual use of the capacity of a road or a transit line aren't calculations but estimates. However, the core assumption he made about rail projects having lower ridership than estimated is completely unfounded in reality.
For example, I assume that rail transit projects will cost about twice as much as promised, and will carry about half as many passengers as promised.
The exact opposite is happening: light rail projects across the country are hitting their 2020 daily ridership projections within a year of opening. In other words, when you assume something perhaps you should do further research before posting it online for everyone to see.
Some rail projects come within budget, others don't come close. The difference between rail and roads in this respect is merely perspective. If you started running the clock on SR-520 estimates a handful of years ago you'd be citing ridiculous cost overruns, but instead we wait until construction starts to count those overruns. If we waited until Sound Transit started constructing light rail to evaluate their budget, we'd find they're on-schedule and a hundred+ million dollars under-budget.
We started the clock on Sound Transit during a political campaign in 1996 before major design occurred, however. It was a mistake that they should pay for naturally, but it was a mistake we'd see occur with more frequency if roads projects were thrown into the voting fray.
Importantly, these rail projects help alleviate the need for future roads projects. One light rail spine moves the equivalent of eight lanes of traffic an hour -- that's like building another 405. Expanding 405 by four lanes has cost more than light rail from UW to the Airport will. The light rail line will move many more people daily than those new 405 lanes, with no traffic created. If all of those future train riders drove instead, our entire region will be at a standstill.
Posted by: rizzuhjj on May 15, 2009 06:10 PMI'm wondering what Boeing's estimate for producing the 787 was early in the project when the decision was made to produce it, versus the costs incurred to date are now for example.
The delivery methodology for public works projects needs to be reconsidered for sure, but if we're assuming that everyone is simply lying early on in developing project costs, we're making rhetorical points only - rather than seeking to truly do better.
If we think it's a matter of which political party is in charge...then look to to the last 8 years of Federal management compared to the last 8 years of our State's management and tell me there was a radical difference...
Posted by: BA on May 15, 2009 08:27 PMWell, if the liar have a "d" after their names, Obama supporters allow for unlimited amounts; democrats generally have a built-in double standard wherein it's impossible for them to hold their own officials responsible for their lies... and as we see here on a frequent basis, many lame efforts will be made to spin the lies in question.
Posted by: Hinton on May 15, 2009 09:31 PMWhere does the number '8 lanes' come from?
What does the source say max throughput per hour is for a lane of traffic?
Gregg
Posted by: gregg on May 15, 2009 10:10 PMI'm not familiar with the 787, but am very good friends and a partner in a new venture with one of the high-up Boeing VPs who was on the 777 project.
EVERY TIME there was more than a few percent change in budget or schedule, the project management had to go back to the Board and explain the situation and ask for more money. It wasn't a given that the project would continue.
And after a few years into the program (when committed funds were very high), delays were met with terminations - people being asked to leave for their incompetence.
When was the last time that Government came back and asked for more funds or continued approval for a scaled back and more expensive proposal? When was the last time a Government manager was fired for blowing their estimate?
Posted by: Shanghai Dan on May 15, 2009 10:25 PMThen the next major phase of the mistake is to not maintain the scope of work once they do set a budget and obtain a funding stream through what ever means. They add a little here and a little there and give that guy a mitigation and don't care of the regulation changes that standard a little and then they finally get to the check stand and WHOA it bid for how much!!????
Just like gravity and water budgets must be dealt with so Should estimates exceed budget budgets scope is Cut but the fantasy continues that somehow they can make it.
Lastly the organizations never learn from those experiences. Sound Transit has none of the first staff since they all left about 3 years ago after the first set of money ran out.
AND WE voters forget too and vote forever funding streams and hair dressers from Camano Island to run our transportation funding. Can you see Sound Transit still trying to collect taxes after the Second Coming. I can. Jesus that Revelations thing was cool but here is your RTA tax.
So lying or not they don't have to meet the key goal of staying within budget for the scope promised or you pay with your career or jail. They flitter through the process acting helpless or naive and then look to hang the consultant if they don't get what they want on bid day.
Ok post the million exceptions but realize if you want the BMW and the sales rep says $70k and you have KIA money in your pocket of $12k you don't get the BMW as much you want to blame the BMW rep.
Posted by: Col. Hogan on May 16, 2009 07:38 AMThe Liberal will say, look, see this traffic...inaction in building public transit will allow the 'crisis' to continue. Climate change? Inaction will end humanity!
Once a certain frenzy is instantiated, there is desire to spend towards a solution. How can cooler heads prevail?
It's ineffective to propose nothing. More effective is proposing a smaller alternative. Even more effective is proposing a completely different approach.
For example, in 1993 I went before a community review board that was proposing rail based solutions from Metro. I said...look, trains can't get us everywhere. How about increasing the number of taxis and reducing costs and licensing fees so that they could get people who cannot drive point to point?
So, once the "issue" is on the table...whether real or not...the challenge is to also have a ready "solution", preferably one that involves action...and better if that action has no cost or costs less than inaction.
Posted by: Olduvai Gorge on May 16, 2009 09:51 AMOTOH, I would like to see someone compile a list of some of the major projects carried out here over the last, say, 30 years that gives the initial estimated cost and then the final actual cost. I don't know where to find such things. Downtown transit tunnel would be one, maybe the I-90 tunnels, convention center. . . .
Posted by: Frank Black on May 18, 2009 12:33 PMGovernment will issue a RFP and large engineering/construction companies respond with a bid. However, we insist that the lowest technically acceptable bid be chosen.
These firms know that to get the business they need to submit the lowest possible cost estimate. They also know that once they get the work, they'll discover thousands of reasons to issue change orders, which balloon the cost of the project.
I've prepared bids for government contracts, and I know that if you put together a comprehensive bid with contingency/risk mitigation funds included and give a reasonable schedule, someone else will submit a best case scenario bid with no contingency funds and the most optimistic schedule.
We need a BS audit on bids that throws out the ones that clearly intend to lowball and change order their way to profit. In other words they lie to get the job, or they go out of business, that's the way it works.
I think most government is incompetent, but we've tied their hands on contracting to the lowest bidder and we know what we're going to get. I'd like to see rules that prevent any company that goes over 10% of their bid on change order banned from future bids, but then the companies would just change their names and go on with business as usual.
Posted by: Dan on May 19, 2009 07:23 AM