Sunday, July 28, 2013

Willie Brown: Dig a hole and fill it with money

He can laugh now

Now that he never has to run for office again, Willie Brown can afford to be candid. From his column in this morning's Chronicle:

News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there's no alternative to coming up with the money to fill it in.

Brown has said this sort of thing before.

The authors of "Megaprojects and Risk" (Brent Flyvberg, Nils Bruzelius) studied hundreds of big projects around the world. They verify Brown's opinion about big projects:

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, emphasis added).

This lying---or, at the very least, a complete indifference to the cost to taxpayers for big projects---is practiced by both politicians and contractors. Labor unions also don't have any problem with this, because even dumb, wasteful projects create jobs for their members. The unions then support Democratic Party politicians when they run for office.

As Brown noted, the Central Subway is a good example of the too-big-to-stop practice. This BART project is another example. The California high-speed rail project is the biggest example, but there's at least a chance that the court will put a stop to it and save taxpayers billions of dollars.

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