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Last week, Bloomberg's Noah Smith wrote an article titled "The U.S. Has Forgotten How To Do Infrastructure" that asked a lot of questions that would get us to a [David] Goldhill like analysis of our infrastructure approach. Just like on Healthcare Island, on Infrastructure Island we have our own way of talking about things. And we never talk about prices, only about costs. And as Smith suggests, costs go up and nobody seems to understand why.
He goes through and dismisses all of the usual suspects. Union wages drive up infrastructure costs (yet not true in countries paying equivalent wages). It's expensive to acquire land in the property-rights-obsessed United States (yet countries with weaker eminent domain laws have cheaper land acquisition costs). America's too spread out or our cities are too dense (arguments that cancel each other out). Our environmental review processes are too extensive (yet other advanced countries do extensive environmental reviews with far less delay). I concur with all these points, by the way.
Smith concludes with this:
That suggests that U.S. costs are high due to general inefficiency -- inefficient project management, an inefficient government contracting process, and inefficient regulation. It suggests that construction, like health care or asset management or education, is an area where Americans have simply ponied up more and more cash over the years while ignoring the fact that they were getting less and less for their money. To fix the problems choking U.S. construction, reformers are going to have to go through the system and rip out the inefficiencies root and branch.
Much like health care, our infrastructure incentives are all wrong. Until we fix them -- until we go through the system and rip out the inefficiencies root and branch -- throwing more money at this system is simply pouring good money after bad.
Source: https://www.strongtowns.org/journal/2017/6/4/this-is-why-infrastructure-is-so-expensive
(Score: 1, Insightful) by Anonymous Coward on Sunday June 11 2017, @05:59AM
In my experience, the projects are inefficient. Everyone has the wrong incentives. The government (at whichever level), having decided to do a job, doesn't feel the pain of budget overruns. Often projects take so long, especially really big ones, that the people who approved them are long gone by the time they turn into scandals. For a recent example, check out Seattle's tunnel project. Years late due to unforeseen (but utterly foreseeable) problems, and the city's political administration are new faces. Clawback provisions and penalties either don't exist, or turn into legal footballs.
For those of you who don't know project management, we live with the so-called "iron triangle" of scope, budget and time. Scope is how big the thing is, and how fancy. Budget is your money, but because you need to pay people it's also your working hours and time is exactly what it says: your deadline. Your typical infrastructure project's scope is written in stone: put up the damn bridge with so many lanes in each direction, according to the following written construction standards. That means when things turn ugly, the other two have to bend. More time, and more money. The powers that be rarely care about time, because political heads rarely roll if something takes too long, and they often actively want the budget to stretch because they want their constituencies to get more of that cash. It's an open secret that infrastructure projects are how sweetheart deals get made. Cities like NYC and Chicago are infamous for it, but it's pretty much nationwide, from what I've seen.
If it became the rule in the USA that political careers were lost based on an inability to build and maintain infrastructure, this would change so fast your head would spin. Union bosses would have their arms twisted to make damn sure that the workers were lined up to within an inch of the critical path. Auditors would be lined up three deep with prosecutors ready to nail people to the wall. Scopes would be as small as they could be, and regulations pared down to the most relevant concerns.
Until that, ain't nothin' changin', my friend. And it's not as sexy as arguing about health care and whether or not corporations are people, so if I were you, I'd sit down, have a beer and get used to it.
By the way, if you want to see a big contrast, check out private property developments. Big, fancy luxury residential high rises going up and getting populated in under two years. Contractors held to standards, deadlines met or people get fired. The private sector does just great at this. It's the government that sucks balls.