Rail Cost Horrors, We’re Not Alone

Feb 10, 2017

Credit creative commons

Reports about Honolulu’s ongoing rail issues can seem to come in alarming and disjointed bursts.  For the past few months, HPR’s Noe Tanigawa has been following threads an average citizen might be concerned about, asking questions you might ask.  Last week we looked at Honolulu’s attempt at Bus Rapid Transit in the early 2000’s.  Today, we’ll get some perspective on transit funding.


James Charlier is a transportation planner, head of Charlier Associates based in Boulder, Colorado.  The largest city they’ve worked in is Jakarta, Indonesia, but most of their work is in the U.S, Houston, Los Angeles suburbs, Phoenix, many more.  Charlier was invited to Honolulu twelve years ago to work on zoning and is currently doing transportation planning in Ho’opili.  His experience in transit nationwide offers perspective on our rail cost explosion.

James Charlier is a transportation planner, president of Charlier Associates, based in Boulder, Colorado. Mr. Charlier is a certified planner (AICP) and is active in the Congress for New Urbanism, the Urban Land Institute, the American Planning Association and the Institute of Transportation Engineers.
Credit J. charlier

 

“I think it's worth focusing for a second on the cost question and the cost overrun issues. This problem of cost overruns and escalating costs far beyond the original budget, that has almost become a characteristic of developing a major transit system.  For example, we live in the Denver region and FasTracks, 113 mile regional rail system in Denver is moving forward and has had an enormous impact on the region.  That system is costing billions of dollars more than it was originally supposed to.  That caused incredible political turmoil and battles and was part of mayoral races and those of us in transportation know we have to get much better at that or we’re going to completely lose any public support for major investments. “ 

 

“I will say it’s not a problem that’s unique to transit.  Our highway project, our freeway projects, have suffered exactly the same fate.  And to some degree, what’s happened is that building major transportation capital investments, pick your project, have become much harder to do than they used to be.  The process is much more difficult, the kinds of mitigations and management strategies  that are required as parts of those projects have become much more demanding than they used to be.  That acceleration and increase in the demands placed on those kinds of projects has, I think outpaced our ability to implement them."

 

One cost relieving approach, Charlier notes, can be public/private partnerships.

 

Charlier:  “And I think that’s definitely a good conversation for Honolulu to have.  We’ve had mixed results with that in the Denver region.” 

 

Their T-REX project, a light rail/freeway project from downtown Denver to suburbs in the south came in ahead of schedule and under the most recent budget forecast in a classic public/private partnership.  The rail line partnership from downtown to the airport however, is suffering ongoing problems.

Charlier:  “It’s not a panacea but it can help bring costs down.”

 

“The Big Dig in Boston, of course is the ultimate example of a project gone wrong every which way, including cost overruns.”

 

For three decades they weathered problems ranging from falling light fixtures and faulty cement mixing to a ceiling collapse that killed a passenger.  The price tag went from 2.6 billion to 15 billion, 24 billion including debt interest.

 

Charlier:  “But they needed to complete it and now its an extremely important part of the Boston metro region.  If they didn’t have it, they’d be incurring costs every day in travel costs, in opportunity costs associated with economic development.”

 

Charlier points out there are members of the public who do not favor growth and would not want to spur economic development. 

 

“What we realized was you couldn’t just say, We’re going to accept high levels of congestion and that’s okay with us, because it would have economic impacts you didn’t anticipate.”  

 

Like sending development into rural areas.  Granted we have to do something, but this project is now estimated at 9.5 billion dollars, for a population of one million.  Could we default?

 

Charlier:  “That’s a very serious question. and if that’s a prospect then it deserves very careful consideration.  But I have not actually heard that.  At another level, it’s an important question to say, If we’re going to spend eight billion dollars on a rail system, what might we have spent that eight billion on that might have generated higher rate of return?  That’s always something we should ask, and frankly, it doesn’t always get asked.  And I think it’s fair, you know, when you’re part of the way through something, and costs keep escalating you have to keep raising that."  

"But at some point, we lose sight of the benefits, and we forget that if we bail out, we bail out of the benefits as well, so I think it’s a tough decision.  But it would be really rare for a mega project to be shut down part of the way through because of escalating costs.  Usually, that’s not a viable choice.”

    

Nine point five billion dollars estimated so far.  What are we trying to do?  What is the vision?  We’ll look at that and talk with the people who started us on this path.