Tuesday, September 27, 2011

Central Subway: Too big to stop?

The article in the Examiner last week provides the ultimate trump card played by supporters of bad projects: "Subway costly even if aborted." (Earlier this year, Matier and Ross wrote about that argument being deployed on another project: "BART's Oakland Airport Connector too costly to stop.")

Hard to believe that throwing good money after bad is ever a good idea. Would SF really have to pay back the $100 million the feds and the state have already given the city for the Central Subway? Even harder to believe that Senators Boxer and Feintein and Representative Pelosi wouldn't be able to make a deal with the Obama administration on that. The $77.3 million of Prop. K money the city has already spent would be a total loss. The Examiner quotes MTA boss Ed Reiskin:

“This[project] has been more vetted and analyzed than any other public works project in San Francisco,” Reiskin said. “I’m confident that no matter who ends up in Room 200, they would be very unlikely to pull a [Governor]Christie and pull the plug on this thing.”

How exactly has the Central Subway project been politically "vetted"? It's easy to forget that the Central Subway was on the 2003 ballot as part of the Proposition K measure, though the projected cost was then a mere $647 million, not the current estimate of $1.58 billion. And, as Dennis Herrera pointed out the other day, the city will be responsible for any construction overruns and for operating the system after it's built (that's also true of California's high-speed rail project, by the way).

But the real challenge is stopping these mega-projects before they start. A book on megaprojects ("Megaprojects and Risk," Flyvbjerg, Bruzelius, Rothengatter) tells us how these projects get approved in the first place---by inflating estimates of future benefits and minimizing construction and operating costs:

The US Department of Transportation study of ten rail transit projects calculated viability by cost-effectiveness analysis, which related cost to ridership. As mentioned, cost overruns in the ten projects ranged from -10 to +106 percent, whereas actual ridership was 28 to 85 percent lower than forecast ridership. The result was actual costs per passenger on the average 500 percent higher than forecast costs (ranging from 190 to 870 percent) and, accordingly, an actual project viability much inferior to that projected...The study concludes, "It is certainly possible that decision makers acting on more accurate forecasts of costs and future ridership for the projects reviewed here would have selected projects other than those reviewed here." (page 42)

The authors of "Megaprojects and Risk" don't think inaccurate estimates of costs and benefits for such projects are honest mistakes:

"Cost underestimation and overrun cannot be explained by error and seem to be best explained by strategic misrepresentation, namely lying, with a view to getting projects started." (page 16)

Would the Board of Supervisors have okayed the Central Subway if told back in 2003 that it would cost $1.58 billion? Maybe, maybe not, but that price tag might have at least triggered a real debate on the project much earlier in the process.

From the voters' handbook, we learn that in 2003 Proposition K, which authorized a local sales tax for transportation projects, was a feel-good measure that everyone but those grouchy Republicans supported. Prop. K was put on the ballot with a unanimous vote of the Board of Supervisors: Ammiano, Daly, Dufty, Gonzalez, Hall, Ma, Maxwell, McGoldrick, Newsom, Peskin, and Sandoval.

Prop. K was supported uncritically by every "good government" group and individual in the city, which should have rung alarms for that reason alone, much like the ballot proposition that resulted in the awful Octavia Boulevard:

The San Francisco Chamber of Commerce, San Francisco League of Conservation Voters, San Francisco Firefighters, Transportation for a Liveable City, Rescue Muni, SF Bicycle Coalition, Walk SF, San Francisco Tomorrow, Jane Morrison, Nancy Pelosi, John Burton, SEIU Local 250, SF League of Conservation Voters, SPUR, Dave Snyder, Tom Radulovich, SF POA, Assemblyman Leland Yee, SF Labor Council, Lynette Sweet (BART Director), James Fang (BART Director), and Noe Valley Democratic Club.

The first item on the list of things to spend the money on---the tax was estimated to bring in $2.5 billion over a 30-year period---was "maintenance of local streets," for which the same people will be asking us to vote for a $248 million bond in November!

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18 Comments:

At 12:50 PM, Anonymous Jim Rowland said...

Here in Marin and Sonoma we have our own central subway project silliness (though above ground) called the "Smart Train," which is of course going to come in over budget, and which will do little to reduce traffic on 101. For a fraction of the cost we could have a vastly better bus service. The "Smart Train" is a train to nowhere from somewhere. The only guarantee is that your wallet will be lighter, and that the "green" bureaucrats will earn substantial salaries promoting what is, in reality, the "Dumb Train."

 
At 1:15 PM, Blogger Rob Anderson said...

Yes, that "smart" train system is another dumb rail project that is already having problems raising enough money to get built. And it will never pay for itself, which means that taxpayers will end up subsidizing it.

 
At 1:37 PM, Anonymous Anonymous said...

Roads/highway/bridges all pay for themselves.

 
At 3:35 PM, Blogger murphstahoe said...

Yuck

 
At 3:39 PM, Blogger murphstahoe said...

@Jim - as someone who drives from Healdsburg to SF occasionally, and takes GGT from Santa Rosa to SF with much frequency, and Caltrain from SF to Mountain View with high frequency, the SMART train will be worth it.

How exactly could GGT be improved? it gets stuck in traffic in Petaluma, Novato, San Rafael, and at the brige, always. Are we going to put wings on the buses?

This said - much like the issues with the Central Subway they need to get the train to terminate *at* the Ferry Terminal in Larkspur.

 
At 3:40 PM, Blogger murphstahoe said...

Rob - Caltrain does not pay for itself, nor does MUNI, nor does BART. Are you against those systems?

 
At 4:11 PM, Blogger Rob Anderson said...

So the Marin/Sonoma Smart Train project is also "too big to stop"? That makes two, and, if you count high-speed rail, there are three rail projects that have to continue wasting public money. None of these projects can deliver benefits anywhere near what they cost taxpayers. Meanwhile, already functioning transportation systems in the Bay Area are in the red.

 
At 4:20 PM, Blogger murphstahoe said...

They will always be in the red.

Project good/bad should be on return on investment, which is not just money (similar to roads).

HSR Good
SMART Good
Central Subway Bad
OAC Bad
BART to San Jose Bad

SMART is along a corridor that is congested and can only be expanded in the Novato narrows with huge expenditure. Additionally, the corridor will pull in separate revenue and reduce congestion by moving freight currently on trucks to rail.

 
At 5:41 PM, Blogger Rob Anderson said...

Naturally the "return" on a transportation investment doesn't pay off in money, but the size of the investment has to have some relationship to the public benefit. From what we know, neither the Central Subway nor the California high-speed rail project deliver any benefit in proportion to the investment. And the price tag keeps going up on both those projects, so the cost/benefit can't really be calculated.

Your problem, Murph, is you don't know what you don't know. Until you come to grips with what critics of the CHSR system are saying, you're just blowing smoke. You could start with this study, but an even better place to start would be this study.

"Caltrain does not pay for itself, nor does MUNI, nor does BART. Are you against those systems?"

No, I support those systems, because, in the first place, they're already built, and we know exactly what they can do, how many people they can move and what that costs. With both the Central Subway and CHSR, since the systems aren't even built yet, we can't really make the cost/benefit calculation---and the price tag on both projects keeps going up.

I've posted these numbers several times in the past, but I suppose I need to do it again. They can be found in the second document I linked and in the CHSR's own report to the legislature.

Just to get the project built:

Federal Grants: $17-19 billion
Prop. 1A bonds: $9.95 billion
Local Grants: $4-5 billion
Private Funding: $10-12 billion

The feds have already given the state around $3 billion to build the system, but is there anyone who seriously thinks they're going to give another $14 billon or $16 billion?

The state bonds of course won't go very far, and, in any event, they can only be used if there are matching federal funds. No one seriously can think that local governments are going to chip in $4to $5 billion to build the system, and there's been no private funding thus far.

The whole project is built on financial sand, and it was sold to the state's voters and the legislature based on inflated ridership predicitions and low-balled construction and operating expenses.

If Governor Brown is half as smart as I think he is, he'll soon pull the plug on this project.

 
At 12:41 PM, Anonymous Anonymous said...

Rob, get back on topic. Central Subway, remember? You wrote the stupid thing.

 
At 12:52 PM, Anonymous Jim Rowland said...

murphstahoe spoke of traveling from Healdsburg and Santa Rosa to SF, and therefore the "Smart" train will be worth it. Indeed, if you could actually go to SF on the train, the whole concept would be radically different. But it won't. You will still be driving or taking GG Transit (as I do virtually daily) to SF. Even if the train terminated at the ferry's door, when you add in the long boat ride, and the fact that GG Transit stops at multiple points in SF, eliminating the need for yet another transit trip, the "Smart" train will siphon off few commuters because of its inherent inefficiencies. It remains our very own train from nowhere to no other place in particular. (PS - I love trains. My last major vacation was via Amtrak. I really wish you were right on this.)

 
At 12:57 PM, Blogger Rob Anderson said...

"Rob, get back on topic. Central Subway, remember? You wrote the stupid thing."

"Stupid"? Maybe you can get us back on the subject with an intelligent comment.

 
At 2:38 PM, Blogger murphstahoe said...

Jim - add 10% more traffic to 101 without fixing the narrows... this will happen. Housing growth (or simply backfilling all the empty houses in Windsor) without job growth. 10% does not sound like a lot but it will make 101 complete gridlock - gridlock that a bus cannot bypass.

Add in the value from the freight usage and the ROI is positive.

There is a reason that 45,000 people take Caltrain daily and SamTrans has deleted the routes that followed the same general route but which had the multiple stops you tout regarding GGT.

At the height of the gas price spike in 2007-8 the GGT buses from Santa Rosa were "almost full". At $4.60 per gallon, people still preferred cars to (very nice!) buses for medium haul routes. At the same point and time, Caltrain ridership exploded beyond capacity of the trains - and unlike GGT Caltrain has maintained the ridership through the reduction of gas prices.

 
At 4:43 PM, Blogger murphstahoe said...

"No, I support those systems, because, in the first place, they're already built"

Regards SMART - the most tricky part of a railroad, as CAHSR is finding out - is getting the right of way. SMART already has the right of way, it was a functioning freight rail line until the 90's.

 
At 9:59 AM, Blogger Rob Anderson said...

Yes, Marin and Sonoma---and Mendocino County---have the right-of-way, but that's about all they have. They now have to lay track, buy rail cars, build stations, etc. As a boy, I once rode the train on part of the old Marin line from San Rafael to Tiburon. And, as a kid growing up in Corte Madera, a couple of times I scurried quickly through the tunnel to Mill Valley before a train came.

It has made sense to rehab the old tunnel to San Rafael from Larkspur Landing for hikers and cyclists, but the railroad, if it's every built, will just be a burden on Northcoat taxpayers and will never carry enough passengers to help ease traffic significantly on Highway 101.

 
At 10:23 AM, Blogger murphstahoe said...

Cloverdale already has built - and Healdsburg is already planning on building - the stations anyway regardless of the train coming in. Healdsburg Plaza is built out and the town needs additional retail space near the town center.

 
At 10:56 AM, Blogger Rob Anderson said...

Looks like Marin and Sonoma voters will have a chance to repeal the Smart railroad system and tax next year. Good for them!

 
At 12:09 PM, Anonymous Anonymous said...

I'd love a vote on Caldecott's 4th bore.

 

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