Economic Development

A Smarter Dig

Huge cost overruns are the rule on major public works projects. But they aren't inevitable.
by | September 2006

Two massive public works projects were launched in Boston around 1990, each with a budget of about $6 billion. One of them, the "Big Dig" highway extravaganza, exceeded its projected costs by nearly $10 billion and has become a national symbol of sloppy government performance. But it's the other project that offers more useful lessons to public leaders elsewhere.

Many have forgotten, even in Massachusetts, that in 1990, Boston Harbor was so polluted that people had to dodge sludge if they wanted to swim there. The dirty harbor was a major embarrassment to Massachusetts Governor Michael Dukakis in his 1988 presidential campaign. Environmental lawsuits led to a federal judge taking responsibility for the cleanup effort, which has been run by the Massachusetts Water Resources Authority. By all accounts, the professional managers at MWRA got just about everything right--and are finishing the project early for one-third less than its original budget.

What made the cleanup run so much more smoothly than the Big Dig? In a word, oversight. There was, first of all, the role played by the late Judge David Mazzone, who stubbornly resisted demands to slow the project down from ratepayers who complained that it was forcing their water bills to soar. But the fact that local people were paying for the harbor cleanup--in contrast to the federal largesse that primarily funded the Big Dig--also had a positive impact. It generated a watchdog effect. Area officials and citizens participated on boards that helped oversee MWRA's efforts. Several members of the independent board of directors served for a decade or more, lending stability and real institutional knowledge to the proceedings. It's one thing, after all, to pledge accountability, and something else to have people who actually demand it. The Big Dig lacked such a board, as well as the citizen advisory council that MWRA listens to.

For their part, MWRA managers rode herd over private contractors in a way that Big Dig officials didn't do. "At MWRA, there was a distinctive small group acting as the owner's team to whom the construction manager reported," says Doug MacDonald, a former head of the agency and now secretary of transportation in Washington State. On the Big Dig, he says, "it's not totally clear to whom the Bechtel corporation ever reported."

Taken in perspective, the Boston Harbor story isn't anything for government to get smug about. It was, after all, the failure of a public agency to budget properly for maintenance over many years that led to the sludge problem in the first place. Even now, ratepayers aren't crazy about meeting the costs of maintenance, so the nearly complete cleanup remains fragile.

The real lesson out of Boston Harbor isn't that public management is better or worse than private management on a mega-project. It's that public-private partnerships are delicate and need constant vigilance. Even in successful privatization efforts, oversight and competency on the government side remain a must.

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