Sunday, October 31, 2010

Why the public resists public mega-infrastructure projects

The article, below, doesn't make enough of the reasons that there are so many publicly voiced obstacles to mega-infrastructure projects in the US. One reason is cost-overruns. These are now as predictable as a sunrise. It makes all us taxpayers feel like we are being defrauded by the political promoters and their contractors. I think this is called "moral hazard."

Another reason is corruption. Greed and avarice have come to dominate politics today and public projects are a guaranteed cornucopia of funding that gets invariably ends up in the wrong hands in large amounts.

In short, the larger the project, the greater the cost overruns, the greater the opportunity for corruption and the more questionable the intentions and purposes. The public has every reason to be skeptical about these projects.

The editorial author confuses the virtues of investing in existing infrastructure repair, maintenance and development with the creation of grandiose, imperial, new mega-infrastructure projects of questionable value. Just because they have been so aggressively promoted, like TV infomercials, doesn't make them worth doing. If it's jobs, or the economy that's the purpose, then we should be fixing what's broken first. We should be funding urban transit, infrastructure repair, and upgrading critical utilities like water and power. The best analogy is that if your car breaks down, don't run out and buy a Ferrari which you can't afford and won't do the job you need done. We don't need transportation to go to the country club, we need transportation to go to work and to the grocery store. That's not rocket surgery, that's just common sense.

We are living in a time of rampant anti-intellectualism and know-nothingness. Politics is the prime example. Too many people are too ignorant of this project that is creeping toward us on the Peninsula and in California like a hurricane pictured on the weather news. The difference is that if it does arrive, it will never leave, but cause havoc and destruction irreversably.

California's high-speed rail project is the most egregious example of this syndrome. A luxury train for the well to do that the State and Nation can't afford and that California doesn't need. Meanwhile the existing infrastructure is neglected, underfunded, and left to deteriorate. I need to ask my Democratic friends, why must a federal bailout for California be such an elitist super-project? Instead of this near useless project, why can't we reconstitute our urban and regional mass transit systems, where the demand is so high, as testified by our Bay Area and LA Basin traffic congestion? Why can't we fix what's broken? Why must we persist in our China and Europe envy, and build what will be obsolete by the time it's completed?

And as the Bloomberg article about New Jersey's train tunnel points out (the second article, below), we are suffering from a persistent lack of oversight and accountability. That too is part of the California HSR situation. The CHSRA always has been, and continues to be out of control; anyone's control. If controls are even hinted at by the legislature, the Governor vetoes them. Why would anyone support any public construction in California any longer? It's like throwing endless amounts of our money down the toilet!

Want to know what to do about it? Each of you get five people you know as informed and as angry as you are. And, do it soon. Give me their email addresses so that they too can read all these articles.

We can stop this. But, we need a "critical mass" of concerned people who know how to say no. No to the high-speed rail authority for their intentions to destroy our cities.



US Shuns Some Big Public Works Projects


NEWARK, N.J. October 21, 2010, 09:21 pm ET

New Jersey's governor wants to kill a $9 billion-plus train tunnel to New York City because of runaway costs. Six thousand miles away, Hawaii's outgoing governor is having second thoughts about a proposed $5.5 billion rail line in Honolulu.

In many of the 48 states in between, infrastructure projects are languishing on the drawing board, awaiting the right mix of creative financing, political arm-twisting and timing to move forward. And a struggling economy and a surge of political candidates opposed to big spending could make it a long wait.

Has the nation that built the Hoover Dam, brought electricity to the rural South and engineered the interstate highway system lost its appetite for big public works projects? At a time when other countries are pouring money into steel and concrete, is the U.S. unwilling to think long-term?

"My sense is things have changed," said Andrew Goetz, a University of Denver professor and an expert on transportation policy. "People now tend to see any project as a waste of money, and that's just wrong."

"I call it the Bridge to Nowhere syndrome," he added. "High-profile projects get publicized and they become a symbol for any infrastructure project that's out there, and even the ones that are justified get tarnished by the same charge."

The so-called Bridge to Nowhere would have cost hundreds of millions of dollars to connect one Alaskan town to an island of 50 residents. It figured in the 2008 presidential election when then-Alaska Gov. Sarah Palin was criticized for initially backing the plan, which was eventually scrapped.

The other cautionary tale of the past few years is Boston's Big Dig, the highway and tunnel project that was originally envisioned at less than $3 billion and wound up costing nearly $15 billion.

The Big Dig has made it far easier for motorists to get to and from Boston's airport, and it eliminated a noisy and unsightly elevated highway that cast a shadow over some of the city's neighborhoods. But construction was plagued by years of delays, corruption and shoddy workmanship that resulted in the death of a motorist in a ceiling collapse.

A report this month by the Treasury Department and the Council of Economic Advisers paints a picture of a country dissatisfied with the state of America's aging infrastructure and in favor of improvements, but not necessarily eager to commit the dollars to fix it.

Standing in New York's Penn Station on Thursday in front of a sign touting the proposed tunnel, commuter Bill Mischell of Plainsboro, N.J., gave voice to those conclusions.

"You could make the argument that it will make New Jersey a better place to live, but you also have to weigh it impartially against the huge cost," Mischell said. "The state's in pretty significant financial trouble, and the money's got to come from somewhere."

Infrastructure spending in the U.S. stands at 2 percent of the country's gross domestic product— half what it was in 1960 — compared with approximately 9 percent in China and 5 percent for Europe, according to the government report.

"During recessions it is common for state and local governments to cut back on capital projects — such as building schools, roads and parks — in order to meet balanced budget requirements," the report concluded.

"However, the need for improved and expanded infrastructure is just as great during a downturn as it is during a boom."

The American Society of Civil Engineers calculates that the U.S. would need to spend an additional $1.1 trillion over the next five years to restore roads, bridges, dams, levees and other infrastructure to good condition. In its latest report card, the engineering society gave the nation's public works a "D" grade.

"Somehow we believe if we ignore it, it will go away," said Blaine Leonard, the society's president. "And it won't. We have to stop hitting the snooze button on this problem."

He said now is a good time to spend money on infrastructure because construction companies in this weak economy are hungry for work and the costs are relatively low as a result.

Major infrastructure projects of the past benefited from strong leadership, notably the interstate highway system pushed by President Dwight D. Eisenhower in the 1950s, he said. Today, though, "there isn't any high-level leadership about infrastructure," so there's no agreement about priorities, Leonard said.

CG/LA Infrastructure LLC, a Washington consulting firm, recently put together a list of the worthiest 100 large infrastructure projects in North America, totaling about $400 billion. Among the suggestions: a next-generation air traffic control system; high-speed rail linking Minneapolis, Milwaukee and Chicago; a pair of highway projects in Texas; and the tunnel that New Jersey's governor has threatened to scuttle.

To be sure, there are large-scale projects under way, notably in California, where a combination of federal dollars and voter-approved bonds and local tax increases are funding improvements, from highway widening to the $6.2 billion renovation of the Bay Bridge between San Francisco and Oakland. And this week, Arizona and Nevada hailed the opening of a $240 million bridge that bypasses Hoover Dam.

However, many projects recently completed or in the pipeline secured funding before the economy went into a slide. Some of them might not be approved today.

In New Jersey, construction on a rail tunnel connecting New Jersey and New York City — the largest transportation project under way in the U.S. — began in 2009 under then-Gov. Jon Corzine, a Democrat. It is projected to double train capacity at peak times as well as provide 6,000 construction jobs immediately and up to 40,000 jobs after its completion in 2018. About $6 billion of the cost is being covered by the federal government and the Port Authority of New York and New Jersey.

Earlier this month, Republican Gov. Chris Christie announced he was pulling the plug because the cost had escalated from $5 billion in 2005 to more than $9 billion by the federal government's estimate, and as much as $14 billion by Christie's reckoning.

"I simply cannot put the taxpayers of the state of New Jersey on what would be a never-ending hook," he said.

Christie later agreed to reconsider. The two-week review period expires Friday.

In Hawaii, Republican Gov. Linda Lingle announced recently that she wouldn't sign off on a federally subsidized rail line until an updated economic study is conducted. And that may not be completed before she leaves office in less than two months. That means the project's fate could be in her successor's hands.

In Seattle, new Mayor Mike McGinn is threatening to hold up construction of a massive highway tunnel to replace the waterfront's dilapidated, earthquake-damaged Alaskan Way Viaduct because he fears city taxpayers will be on the hook if costs spiral beyond the $4.2 billion price tag.

"The issue of the overall cost of the tunnel has been a concern to voters since before the recession, and I think the severity of the state's and the city's fiscal situation is causing people to take a harder look at ... an expensive and risky project," McGinn said.

In Wisconsin, Ohio and California, Republican candidates for governor have vowed they won't endorse high-speed rail projects, despite the promise of billions of dollars from Washington.

Other countries are spending heavily on job-creating infrastructure. Projects include Algeria's $11.2 billion east-west highway; a planned $10 billion bridge linking the Indonesian islands of Java and Sumatra; and China's $60 billion Yangtze River diversion project.

Australia plans to spend $38 billion to relieve traffic congestion in Melbourne, while Britain is preparing for a $45 billion high-speed rail link between London and the West Midlands. Japan is building a $70 billion highway from Tokyo to Osaka, scheduled for completion in 2020.

In the U.S., it often takes a catastrophe to give infrastructure improvements more urgency. The Minneapolis bridge collapse in 2007 that killed 13 people prompted reviews of aging bridges around the country.

"Unfortunately, our attention span is short," Leonard said. "You would think the Minneapolis bridge collapse would have sent repercussions throughout the system that would have resulted in a transportation funding bill, but it didn't. Even bridge funding bills didn't get through Congress."

Consultant Norman Anderson of CG/LA Infrastructure said the federal government's recent emphasis on smaller, "shovel-ready" projects to stimulate the economy is misguided and shows a lack of vision.

"You don't do 'shovel-ready.' That is idiotic and extremely uninformed," he said in an e-mail. "You do projects now because they produce value for an economy 20 to 30 years into the future, as well as producing immediate jobs."


Rubinkam reported from Allentown, Pa. AP Business Writer Elaine Kurtenbach in Shanghai contributed to this report.


New Jersey Rail Tunnel Needs Tighter Oversight, Federal Document Says

By Terrence Dopp and Angela Greiling Keane - Oct 21, 2010 2:45 PM PT

New Jersey began its stalled $8.7 billion rail tunnel without proper oversight and faces “significant risk” of overruns, according to a document from the U.S. Transportation Department inspector general’s office.

Former Governor Jon Corzine’s administration should have hired a private-sector inspector general to oversee the project when it commenced work in September 2009, the federal officials said in a May 17 report that a state lawmaker released today. Corzine, a Democrat, gave Comptroller Matthew Boxer that responsibility.

Republican Governor Chris Christie on Oct. 7 ordered work halted, saying the project might end up costing $14 billion. Under the original plan, the federal government and Port Authority of New York & New Jersey each were to pay $3 billion for the work, and the state $2.7 billion. Christie said state taxpayers would be “on the hook” for anything more.

New Jersey Transit started the project “despite the benefits and widespread use of integrity monitors in New York and New Jersey,” Joseph W. Come, assistant inspector general for surface and maritime program audits at the Transportation Department, said in the memo. “Based on our years of monitoring major construction projects in the area, we believe NJT should reconsider its decision.”

The Federal Transit Administration’s “decision to award an early systems work agreement may keep the project within budget and on schedule but it is not without significant risk,” Come wrote, without estimating how much the project may go over budget.

Adding it Up

The memo was among more than 150 pages of documents the Christie administration released to Assembly Transportation Chairman John Wisniewski, a Sayreville Democrat who has opposed the governor’s decision, after a public-records request. Wisniewski said the documents don’t support the overruns of as much as $5 billion Christie cited in stopping the project, known as Access to the Region’s Core.

The governor’s spokesman, Michael Drewniak, said the documents were the first of many that will be released on a “rolling basis.”

The report was “among the red flags for the governor,” Drewniak said in an interview.

Calvin Scovel, U.S. Transportation Department inspector general, announced in March that he planned to audit FTA oversight of projects in and around New York. The projects to be scrutinized included the Metropolitan Transportation Authority’s Fulton Street Transit Center, Second Avenue Subway and East Side Access projects, all of which received money from President Barack Obama’s economic stimulus-package.

‘Thin Air’

Olivia Alair, a Transportation Department spokeswoman, declined to comment on the report. David Wonnenberg, a spokesman for the inspector general’s office, didn’t immediately respond to a telephone call and e-mail seeking comment.

Federal officials never justified Christie’s estimates of as much as $5 billion in overruns, Wisniewski said in a statement.

“That claim seems as though it was simply pulled out of thin air by the governor,” the lawmaker said. “The governor is risking New Jersey’s economic future with numbers that, at least according to these documents, have no basis in reality.”

To contact the reporters on this story: Terrence Dopp in Trenton, New Jersey, at; Angela Greiling Keane in Washington

To contact the editor responsible for this story: Mark Tannenbaum at


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