Why America overpays for bridges, highways, transit, and other transportation infrastructure

Thomas Lifson
American taxpayers are getting a terrible deal when it comes to large government-sponsored infrastructure projects. We pay 2 or 3 times as much for them as we should in many cases. The result is that we are put to shame by many other nations when it comes to building the highways and other transportation facilities we need to remain competitive.

Consider bridges, for example. Compare the Millau Viaduct in France, a one and a half mile long cable stay bridge over the Tarn River Valley in France, completed in 2004 at a cost about $483 million dollars (at the 2004 dollar/euro exchange rate),

with the 2.2 mile long Eastern Span of the San Francisco Bay Bridge, completed in 2013 at a cost of $6.4 billion dollars.

Even allowing for inflation, for the fact that the Bay Bridge is more than twice as wide and constructed over water, the cost comparison is starling.

Ryan Cooper, writing in The Week, explains at least a good part of the bad bargain we are getting. In sum, there are three main factors he finds:

1. Expensive labor. From the top brass at New York's Metropolitan Transportation Authority: "The MTA is required to overstaff projects so that the same [tunnel boring machine] work, for instance, that can be done in Spain with nine workers must be done in [New York City] with 25 workers."

2. Out-of-control private contractors. From Stephen Smith at Bloomberg: "Agencies can't keep their private contractors in check. Starved of funds and expertise for in-house planning, officials contract out the project management and early design concepts to private companies that have little incentive to keep costs down and quality up."

3. A crap procurement process. The classic American way to pay for a big project is to round up about half of the funding (or even less), start construction, and then use a sunk-cost-fallacy to get the rest. This, obviously, is not conducive to efficient or speedy projects. (Looking at you, California high-speed rail.)

I would add the host of bells and whistles that are required by American regulations. Public art and  bicycle lanes, for instance (The Eastern Span of the Bay Bridge has a bicycle lane, but the original Western Span that leads into San Francisco does not. So taxpayers and toll-payers expended scores if not hundreds of millions of dollars to enable people to bicycle from Oakland to Yerba Buena Island. There is really not much there.) Then there is the Davis-Bacon Act, which requires contractors to pay “prevailing wages” – meaning the highest union scale.

As our transportation infrastructure crumbles, it is time for Republicans to make an issue of the raw deal we are getting on large scale construction projects. But I am not holding my breath.

American taxpayers are getting a terrible deal when it comes to large government-sponsored infrastructure projects. We pay 2 or 3 times as much for them as we should in many cases. The result is that we are put to shame by many other nations when it comes to building the highways and other transportation facilities we need to remain competitive.

Consider bridges, for example. Compare the Millau Viaduct in France, a one and a half mile long cable stay bridge over the Tarn River Valley in France, completed in 2004 at a cost about $483 million dollars (at the 2004 dollar/euro exchange rate),

with the 2.2 mile long Eastern Span of the San Francisco Bay Bridge, completed in 2013 at a cost of $6.4 billion dollars.

Even allowing for inflation, for the fact that the Bay Bridge is more than twice as wide and constructed over water, the cost comparison is starling.

Ryan Cooper, writing in The Week, explains at least a good part of the bad bargain we are getting. In sum, there are three main factors he finds:

1. Expensive labor. From the top brass at New York's Metropolitan Transportation Authority: "The MTA is required to overstaff projects so that the same [tunnel boring machine] work, for instance, that can be done in Spain with nine workers must be done in [New York City] with 25 workers."

2. Out-of-control private contractors. From Stephen Smith at Bloomberg: "Agencies can't keep their private contractors in check. Starved of funds and expertise for in-house planning, officials contract out the project management and early design concepts to private companies that have little incentive to keep costs down and quality up."

3. A crap procurement process. The classic American way to pay for a big project is to round up about half of the funding (or even less), start construction, and then use a sunk-cost-fallacy to get the rest. This, obviously, is not conducive to efficient or speedy projects. (Looking at you, California high-speed rail.)

I would add the host of bells and whistles that are required by American regulations. Public art and  bicycle lanes, for instance (The Eastern Span of the Bay Bridge has a bicycle lane, but the original Western Span that leads into San Francisco does not. So taxpayers and toll-payers expended scores if not hundreds of millions of dollars to enable people to bicycle from Oakland to Yerba Buena Island. There is really not much there.) Then there is the Davis-Bacon Act, which requires contractors to pay “prevailing wages” – meaning the highest union scale.

As our transportation infrastructure crumbles, it is time for Republicans to make an issue of the raw deal we are getting on large scale construction projects. But I am not holding my breath.