The Worst Way to Manage a Transportation Project
Think the cost overruns on the Big Dig were bad? The hole just keeps getting deeper for the Boston area's transit agency.
The recent news that the estimated cost of an ongoing Boston-area subway-line extension has risen from $1.4 billion to nearly $2 billion surprised exactly no one. The more-than-two-decade history leading up to this most recent cost overrun contains a lifetime's worth of cautionary tales for state and local governments.
Almost everyone reading this should have some familiarity with Boston's "Big Dig." After all, you probably helped pay for it. The project included taking down an unsightly elevated roadway and running it underground, extending the Massachusetts Turnpike to Boston's Logan Airport and constructing a bridge over the Charles River. When it was finally completed in 2007 (nine years late), the original $2.8 billion price tag had swollen to $14.6 billion, more than a quarter of it covered by federal taxpayers.
Less attention has been paid to the court-ordered construction of 14 transit-related projects as environmental mitigation for the additional traffic the Big Dig would accommodate. Twenty-three years after the 1991 mandate, the Massachusetts Bay Transportation Authority (MBTA) owes nearly $9 billion in debt and interest, almost half of which can be attributed to the transit-mitigation requirements. If not for a series of fare hikes in recent years, the MBTA would pay more in debt service than it collects in fares.
Cost overruns on the current 4.5 mile extension of the MBTA's Green Line are a microcosm of why the mitigation requirements have been a disaster. Engineers encountered more than 500 "utility conflicts" along the corridor. Then there are the add-ons: A community path for bikers and walkers and more drainage for a river that was long ago covered by landfill but apparently still wreaks havoc during rainstorms. It's mitigation for the mitigation.
Payments to the design contractor jumped by more than half because platforms had to be extended to accommodate longer trains than had been envisioned 23 years ago. That's what you get with government by mandate.
And since the MBTA had to dedicate so much money to financing the mitigation projects, corners had to be cut elsewhere. A large concentration of MBTA vehicles are approaching or have surpassed their useful life. If you can't get down to Havana to watch the parade of pre-1959 American-made cars, just take a ride on a Boston-area commuter train. Old rolling stock means compromised reliability.
The fact that it's impossible to know what system priorities will be more than two decades down the road is just one lesson governments can draw from the unmitigated disaster of Boston's transit mitigation. The first lesson is that it's a spectacularly bad idea to mandate the construction of billions of dollars worth of new projects without a funding source.
But construction expenses are only part of the picture. Projects should be budgeted based on the cost of building, operating and maintaining them over their lifecycle. If that had happened in Boston, seeing more realistic numbers might well have resulted in some of the projects being eliminated.
Lifecycle budgeting also reduces the temptation to skimp on maintenance. The MBTA faces a maintenance backlog that topped $3 billion in 2009 and has only grown since. In the transit authority's fiscal 2010 budget, just six of 57 maintenance projects that received a safety rating of "critical" could be funded.
Budgeting based on transportation projects' real costs makes it less likely that government officials will be put in the position of robbing Peter to pay Paul by skimping on maintenance and not replacing assets in a timely manner. Forcing planners to take a clear-eyed look at real project costs might cut back on the ribbon-cuttings that politicians so enjoy, but it would result in infrastructure that functions better and lasts longer. And it might just avert disasters such as the one the MBTA is facing.