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If You Had To Bet $1000

If you bet $1000, it would be $1000 more than any proponent of high-speed rail has at stake in the project.

Nov 15, 2013

If you had to bet $1000 on whether the high-speed bullet train would cost closer to the projected $68-billion or, say, $300-billion, how would you bet? Me too. Why? The new Bay Bridge cost five times the projected cost, and was 10-years late. The 'Big Dig" tunnels in Boston were projected to cost $2.5-billion, but ultimately cost $15-billion. If you bet $1000, it would be $1000 more than any proponent of high-speed rail has at stake in the project.

In the article below from the Contra Costa Times, "Oxford University megaprojects researcher Alexander Budzier said that in a study of 157 bridges and tunnel projects built from 1919-2001 costs rose on average 34 percent and estimates were low in nine out of 10 cases. High-speed rail and dams fared worse, he said. Researchers blamed the phenomenon on project bias, described as excessive optimism and "strategic misrepresentation or, put simply, lying," Budzier said.

 

"People think they can do a project faster and so the cost estimates are that much less... and project proponents are the most likely to intentionally misrepresent the risks just to get a project going because once it gets started, it is almost always finished no matter how big the overruns."

Sound familiar?

"There is no way to get rid of (cost and timeline bias) unless the people making the estimates have something at stake," Thompson said (Louis Thompson, chairman of the California High Speed Rail peer review group). "Unless they know that at the end, 'Here is where you failed and here are the consequences,' nothing will change."

 

How many would be on board this train if they had to invest just 10% of their own wealth?

There is a project where we would be willing to put our money where out mouth is. A dam. Temperance Flat Dam is projected to cost $2-billion. We know how to build dams. Temperance Flat is the perfect place for a dam. We need the water. We are willing to pay. Probably less than 1% the cost of a bullet train most of the state doesn't want.



 

Reforms key to controlling costs on public works megaprojects, say experts

SACRAMENTO -- Forget the $1 billion megaproject. It's all about the $10-billion-and-counting gigaproject now.


Experts coined the expanded term to keep pace with the vastly more expensive bridges and other huge infrastructure projects on the drawing boards around the world, such as California's $68 billion high-speed rail plan.


But as megaprojects of yesterday proved, controlling costs and keeping schedules on track will remain unattainable without reforms in how agencies manage increasingly complex and expensive public works projects, experts from England to Berkeley testified Wednesday at a state Senate Transportation Committee hearing.

 
"Good luck," U.C. Berkeley civil and environmental engineering professor William Ibbs offered wryly at the close of the nearly 2½ hour session in Sacramento.


Ibbs was one of four experts committee Chairman Mark DeSaulnier, D-Concord, invited to testify at the first of three hearings on why the new $6.4 billion Bay Bridge was a decade late and cost nearly five times more than engineers estimated.


The state senator said he will use the information next year to help craft legislation aimed at averting a costly repeat of the Bay Bridge, the most expensive public works project in the state's history.


"The Bay Bridge is a beautiful and spectacular bridge, fitting in its setting, but I do wonder if it was worth the cost and the delays," said DeSaulnier in his opening comments. "Now, we have high-speed rail in California and if you believe ... in the research around what happens with rail projects, Californians might be paying $300 billion or $350 billion instead of $68 billion."


Whether it is high-speed rail or California's proposed $22 billion water diversion tunnels through the Delta, overruns and delays are more likely than not, Oxford University megaprojects researcher Alexander Budzier told the senator.


In an Oxford study of 157 bridges and tunnel projects built in 1919-2001, costs rose on average 34 percent and estimates were low in nine out of 10 cases. High-speed rail and dams fared worse, he said.


Researchers blamed the phenomenon on project bias, described as excessive optimism and "strategic misrepresentation or, put simply, lying," Budzier said.


"People think they can do a project faster and so the cost estimates are that much less," Budzier said. " ... And project proponents are the most likely to intentionally misrepresent the risks just to get a project going because once it gets started, it is almost always finished no matter how big the overruns."


One of the keys to reversing this trend is sharing the risks -- extra costs, delays and blame -- more equitably between the public agencies, designers and contractors, said former Boston "Big Dig" manager Virginia Greiman, currently a professor of law at Kennedy School of Government and Law School at Harvard.


The "Big Dig," a series of tunnels beneath Boston that replaced a deteriorating elevated freeway system, started at $2.5 billion and ultimately cost $15 billion.


"Many states require balanced budgets but we never seem to require projects to do the same," Greiman said. And when those massive projects are completed, the state should follow France's example and mandate publications of an easy-to-understand report on how the endeavor scored on cost, schedule and other factors, suggested Louis Thompson, chairman of the California High Speed Rail peer review group.


"There is no way to get rid of (cost and timeline bias) unless the people making the estimates have something at stake," Thompson said. "Unless they know that at the end, 'Here is where you failed and here are the consequences,' nothing will change."


Among the experts' other recommendations:


Commission outside people with no financial stake in the project to conduct mandatory cost-benefit analyses on every big project.
 
 
Hire top-notch project managers with the skills to bring together the public agency, designers and contractors.
 
 
"Mega-communicate" with the public and media.
 
 
Use specialized computer systems that scour designs and project plans for conflicts or errors that could cost time and money.
 
 
Convene citizen and technical oversight committees.
 

Contact Lisa Vorderbrueggen at 925-945-4773, lvorderbrueggen@bayareanewsgroup.com or Twitter.com/lvorderbrueggen.

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