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Light rail costs too much, does too little

Rail Transit: Pay Now, Pay Later

Feb 28

2008

Denver’s 119-mile FasTracks rail transit project, approved by voters in 2004, will cost at least $1.4 billion more than voters were told, according to the project’s 2007 annual report. Moreover, a revenue shortfall means that Denver’s Regional Transit District’s (RTD) ability to sell bonds to pay for construction will fall $400 million short of expectations.

Although RTD blames rising steel prices for the overrun, in fact a large share of the additional cost is due to RTD’s own inane decisions. The original plan called for running Diesel-powered trains from downtown to the airport, but RTD decided to spend another $400 million electrifying the route. RTD also changed routes on the North Metro line, adding at least $100 million to its costs.

So how is RTD going to build it when it is $1.8 billion short? Its plans call for

 

These are all pretty speculative and for most RTD offers no clue as to why it thinks it can do these things if it won’t have enough revenue to repay more than $2.0 billion in bonds. RTD does make the claim that public-private partnerships can “save up to 30 percent” of the projected cost of a project.

But if public-private partnerships work so well, why is RTD only proposing to use them on two of the six major corridors in the rail plan? And how accurate is that 30 percent? The light-rail public-private partnerships that I know about — in Minneapolis and New Jersey — had 50 to 100 percent cost overruns. In New Jersey, at least, when costs rose above expectations, the contractor merely asked the state for more money and got it.

Public-private partnerships for transit are very different from those for highways. Highway PPPs involve a private company building a road, perhaps in a public right of way, then collecting tolls on the road for a set number of years, then turning the road over to the government. No tax dollars are involved.

For transit, a public-private partnership is more like hiring a general contractor: the private company does its own (or contracts out) design and engineering work rather than have the transit agency hire separate contractors to do the design, engineering, and construction. Can anyone conceive that hiring a general contractor would reduce costs by 30 percent? I can’t.

Despite the higher costs and lower revenues, RTD claims it can finish all of the rail projects on time and perhaps even slightly ahead of schedule. Color me skeptical.

You can bet that, no matter how big the overruns, no matter how few people ride the rail lines, RTD will claim they are great successes. And Denver’s regional planners are already contemplating the next stages.

Orange lines are existing rail lines plus FasTracks lines. Green are 142 miles of additional radial routes. Blue are 107 miles of beltlines. Click for a larger picture.

According to the regional government’s 2035 transportation plan (15MB file), when FasTracks is done, they want to build another 142 miles of rail transit lines radiating from downtown Denver plus 107 miles of rail belt line around the region. Estimated cost in today’s dollars: a mere $7.4 billion.

Anyone who doesn’t like to pay high taxes for something they rarely use should not make plans to live in Denver.

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Reprinted from The Antiplanner