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Hi Jarrett,

Nice principle ...
Aim to break down the boundaries between Federal Transit, Highway, and Railroad administrations for the purposes of funding streams

In our corner of the world, after long years, we are just starting to see a little consolidation of these various agencies, when they recently created SPAD (aka Land Public Transport Commission) for Klang Valley and Malaysia. Only Rail, Bus and Taxi authorities in one though. Highways still have separate agencies.

Ref: http://ms.wikipedia.org/wiki/Suruhanjaya_Pengangkutan_Awam_Darat


Rob Fellows

Jarrett, you did an excellent job of avoiding the question -- but I think it's right to start with principles.

The question here is not unique to transit; pretty much all public infrastructure faces a public disinterest in paying to preserve existing things, given the alternative of building new ones that provide more capacity or access. (The same is true on the transit operating side - it's always more appealing to policymakers to add new service rather than to fix reliability problems on existing ones).

You can make the case that this is just one more argument to shift funds from highways. But I'm not sure that's a principle that leads to strategies that could provide a way out of the crisis. For one, you have to make the case that it's not worthwhile to maintain the roads we've already built, many of which provide a transit right of way.

I think a better principle is to firmly commit to maintain and preserve capital assets once they're built, and to condition new and expanded capital program on having achieved that end. It shouldn't be necessary to go to voters to ask whether they are willing to pay for maintenance and preservation - that needs to be assumed or mandated as a condition of building in the first place.

There are all sorts of ways to operationalize that, each frought with complications and obstacles, but that seems like a better principle to start with than to just fall back to the easy comfort of war between the modes.

Alon Levy

The answer I'd give to Aaron is that at current US infrastructure costs, American cities are doomed to disrepair. However, if US infrastructure costs went down and became comparable to European and Japanese costs, it would be much easier to produce transit funding. Not only would current funding levels go much further, but also it would be easier to persuade politicians to allocate more money toward goals that are impossibly expensive today.

Aaron Brown

Thanks Jarrett...you would make a good politician.

Alon - your response begs a few obvious follow-up questions, including whether it's possible to achieve cost-parity in the US (and if so, how?).

But most importantly, why are US infrastructure costs so vastly higher? I've followed the recent debate on subway construction costs at the Transport Politic but came away with little in the way of conclusions, mostly just speculation. Have there been any legitimate studies into this discrepancy?

That would be the first place to start if (as you suggest) we need to bring US costs in line with the rest of the world.


Many factors come to mind:

* Political corruption in some areas
* Higher labor costs
* Currency/macro-economic issues
* A rather onerous public review process
* Greater difficulty with eminent domain (and a corresponding reluctance to use it).
* Less economies of scale due to fewer build-outs in the first place.
* Distributed power structure in many areas (along with a lack of political consensus among the electorate), permitting many thumbs to get into the pie.

Many of these apply elsewhere, obviously; we just have a particularly nasty combination.

Were I a cynic, I'd suggest that the best way to improve transit costs in the US would be to a) first return the GOP to power, so they can deflate the currency, bust the unions, and squander the supply of dead dinosaurs, followed by b) a return of Democrats to power (more liberal than Obama) who will then spend lots of now-with-more-purchasing-power money on such things, and soak the rich to pay for it. :)

However, I'm not a cynic, so I won't advance that particular strategy. :)

Rob Fellows

I have some theories, but I'd love to see a definitive study of the causes for supercharged inflation in infrastructure construction over the past ten years. I actually don't understand why so little attention has been paid to this.

I think one clear reason is the influence of improved environmental standards, so just about every project has had to include environmental retrofits and improvements (for drainage, ESA, etc.) that were not required over a decade ago.

But I also think the bubble economies we've lived through have also had an impact, along with the increased need for voter approval of every new infrastructure tax. Where I live, there's been a bonanza in debt-funded rail and highway improvements, I assume as a result of feeling wealthy and assuming we would keep getting wealthier still. (Even potholes have been funded with debt financing in one large local city). Bonding is particularly attractive when you need voter approval on a tax, because you can promise to deliver a program in ten years that would normally take much longer (even though you end up having only half the money for improvements than you would have if you didn't have to spend the rest on finance charges).

So the result here has been a huge frontloading of projects to make ballot measures pass, and that means that there is a huge spike in labor needed for a few years followed by dramatic layoffs. During the spike, there has to result an increase in labor costs, as engineers and construction workers need to be imported to the region to deliver a massive program. (We are now reaching the end of that era on the highway side, so there will be massive layoffs a couple of years hence.) It would be interesting to know whether other states and regions had a similar experience due to borrowing during the fat years. I know the portion of transportation revenues in my state spent on finance charges has soared dramatically for both local and state levels, and both transit and highway modes.

Eric Doherty

Rob Fellows wrote "you have to make the case that it's not worthwhile to maintain the roads we've already built"

'Fix it First' policies go hand in glove with shifting funds from roadway expansion to transit. Add in policies to get heavy trucks off the road in favor of more efficient modes, such as short sea shipping and rail, and roadway maintenance and repair costs go way down. (Or you get a new source of revenue from weight based damage cost charges).

Transport Revolutions: Moving People and Freight Without Oil by Richard Gilbert and Anthony Perl (now in paperback) has some good content on the potential of shifting spending from roadway expansion to transit and other efficient modes.

Alan Kandel

I have a suggestion. I've read about development that comes into existence along light rail transit lines. I've read about how ridership in many cases surpasses ridership projections for new start-ups. I've read about where patrons using various systems patronize businesses along said lines and the way I see it, various businesses situated along such rail transit lines and near the stations in particular are likely benefiting from the presence of said light rail service, perhaps above and beyond what may have occurred had the rail transit system not been there.

Consider that Baltimore light rail, for instance, serves Camden Yards Stadium where the Orioles play their home games. Keep in mind also that baseball players get paid huge salaries, so it would seem logical that baseball organizations (maybe more so than other business enterprises) could lend a helping hand by injecting capital (strictly from profits) into a rail transit system that theoretically could help bring such a transit network back into state of good repair, which would benefit the riders, which, in turn, could possibly be of added benefit to baseball.

My point here is that businesses that benefit directly or indirectly due to the presence of a transit system being there that drives business to their doors, I could see these business owners potentially benefiting even more, by them having a percentage of their profits go right back into a system that brings them patronage. In other words, said businesses would actually become stakeholders in the transit systems themselves. I think this arrangement would be something on the order of a "pay it forward" concept?

Any thoughts?

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