Sunday, July 17, 2022

Infrastructure 101

This amazing photograph shows, in a symbolic way, the fact America no longer has the wherewithal to build anything of consequence within budget or timeframe, a pernicious reality ironically started by Reagan and the inability of government to work intelligently with private enterprise in terms of how to do infrastructure right. As often state in BRT, There Ain't No Such Thing As A Free Lunch. 

To whit ...

The goal of the 2009 Sepulveda Pass Freeway Expansion Project seemed simple. A carpool lane was to be added to reduce congestion on a 10-mile stretch of Los Angeles’s I-405 freeway, the second most congested road in the U.S. However, this brought exceptional technical and logistical challenges—the project required carving through a mountain, demolishing and replacing three overpasses, and moving a 60-year-old street, all alongside a freeway that saw 500,000 commuters daily. 

After four years of congestion and construction, and with the project a year behind schedule, Sepulveda was trying everyone’s patience. One of the people fed up with the project was Elon Musk. His daily commute to and from SpaceX’s headquarters was taking over an hour due to construction delays. He went to Twitter with his frustration and began openly speculating about buying tunnel boring machines (TBMs) to drill under Los Angeles, offering to pay for the cost of adding more workers to the project. When he investigated TBM technology he discovered that it hadn’t improved in decades—a snail moves 14 times faster than the best drill. A year after his initial tweet, Musk launched the Boring Company, a tunneling technology company devoted to building TBM that can “beat the snail.”

It gets better.

Sepulveda’s cost and schedule overrun aren’t even the worst of it. Just as unattainable as a shortened commute is the Californian dream of building a bullet train that could take you from Los Angeles to San Francisco in under three hours. In 2008, a year before the Sepulveda project began, the state tried to turn this dream into a reality after voters approved a 512-mile high-speed rail (HSR) project. Amid failing overseas wars and financial crises, at the time it could’ve become a symbol of renewal not just for California but the entire country. Instead, it came to exemplify a dysfunctional government that lacks the capacity to build.

At the time California began accelerating the development of its HSR system it only had 10 employees dedicated to overseeing what was the most expensive infrastructure project in U.S. history. It ended up 14 years (and counting) behind schedule and $44 billion over budget. Incredibly, the state has not laid a single mile of track and it still lacks 10 percent of the land parcels it needs to do so. Half of the project still hasn’t achieved the environmental clearance needed to begin construction. The dream of a Japanese-style bullet train crisscrossing the state is now all but dead due to political opposition, litigation, and a lack of funding.

In-house expertise anyone?

This lack of in-house institutional expertise leads to bad decision-making. Bent Flyvbjerg, a professor at Oxford University who has written extensively about megaprojects summarized the problem when asked about California’s HSR project: “If you depend on consultants to know what you are doing then you are in real trouble…a good balance is where the owners are not outsourcing all the knowledge. A bad balance guarantees a bad outcome.”

Overtime 101 - greed is good.

The principal-agent problem arises with union construction labor as well. Skilled union workers, such as electricians and carpenters, make solid hourly wages, but their pay really explodes with overtime. A 2011 study by the Real Estate Board of New York found that some union crane operators made up to $500,000 a year in pay. Union contracts mandate unnecessary positions as well, to the benefit of its members. The same study found 50 workers in unnecessary positions such as relief crane operators on the World Trade Center Project, including 14 unproductive employees making $400,000 a year at the project.

There is a better way ...

Should the U.S. ever commit to a developmentalist strategy, it will have plenty of examples to learn from. Between 1995 and 1999, the City of Madrid designed and built 39 new metro rail stations, laid 35 miles of rail—including 23.5 miles which required expensive tunneling—and completed all work at an average cost of $65 million per mile. It has subsequently completed multiple other phases of similar size with similar results.

How did Madrid accomplish this? It used simple modular designs for each station and did not use any new construction techniques, novel engineering designs, or train technology. When tunneling segments, instead of using one TBM as is typical, it deployed up to six at a time—a number previously unheard of. Most importantly, Madrid ran its construction crews 24 hours a day, seven days a week, and achieved consistent worker productivity gains. Reducing complexity and repeatedly building the same simplified design made iterative improvements possible.

Common sense rules and ... read the detailed  Palladium piece to see why America can't build.

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