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 & 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, emphasis added).

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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Why President Obama will be re-elected

"The 2012 electorate will differ from 2010’s in a crucial respect: it will contain nearly 50 million additional voters. Some will be new, but most of them will be people who supported Obama in 2008. Compared with the 2010 House electorate, they will be younger, more ethnically diverse, with fewer identifying themselves as conservatives, and a higher proportion will be women. Most of them would not have voted for the Republicans who now make up John Boehner’s House."