
If You Build It Myths and Realities about America’s Infrastructure Spending - jseliger
http://www.city-journal.org/html/if-you-build-it-14606.html
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HillaryBriss
A really worthwhile article. Infrastructure spending can be helpful, but the
particulars of the project matter a great deal.

> _A well-known 1988 Congressional Budget Office survey found that spending to
> maintain current highways in good shape produces returns of 30 percent to 40
> percent—but that new highway construction in rural areas showed a much lower
> return._

But also:

> _California’s huge investment in high-speed rail was justified by a 2014
> cost-benefit analysis that Parsons Brinckerhoff, the firm building the rail
> system, had prepared. The report predicted that total benefits from the
> project would range from $66 billion to $80 billion over several decades.
> That number looked reasonable when the projected price tag for the project
> was $35 billion, but the budget has already swollen to $68 billion—and is
> still expanding._

~~~
dragonwriter
> California’s huge investment in high-speed rail was justified by a 2014
> cost-benefit analysis that Parsons Brinckerhoff, the firm building the rail
> system, had prepared. The report predicted that total benefits from the
> project would range from $66 billion to $80 billion over several decades.
> That number looked reasonable when the projected price tag for the project
> was $35 billion, but the budget has already swollen to $68 billion—and is
> still expanding.

Wow, the pile of errors there is pretty amazing...

(1) The SF-Anaheim route (Phase 1) was estimated at $33 billion in _current_
dollars in 2006 (given the construction and inflation estimates in that plan,
that was $65 billion in year-of-expenditure dollars at that time), but that
was quickly revised to $96 billion year-of-expenditure if exclusive trackage
(the original plan) was retained for the whole route.

By the 2012 business plan, that option (no longer the preferred one) was down
to $91.3 billion year-of-expenditure, and the now-preferred blended system
which used some shared track was $68.3 year-of-expenditure.

(2) The supposed 2014 report from Parsons Brinckerhoff (which hadn't yet been
selected as the lead partner for the rail delivery contract) doesn't seem to
exist; all the High Speed Rail Authority's commissioned studies and reports
are published on the Authority web page together by year, and there is no 2014
report from Parsons Brinckerhoff, and no report (in 2014 or otherwise, from
Parsons Brinckerhoff or otherwise) I can find making the prediction indicated
in the quote, after skimming the ones that seemed from their titles to focus
on economic impacts.

There is a 2016 fact sheet claiming that the Phase I alignment is an
alternative to a combination of freeway and airport construction that would
cost $158 billion to provide equivalent capacity, which at a $68 billion price
tag for High-Speed Rail _would_ be $80 billion of _net_ savings in
construction cost alone (there are also operations/maintenance cost savings)
-- not total benefit before cost.

~~~
HillaryBriss
I think the article may have been referring to page 30 of this 2014 Parsons
Brinckerhoff document on HSR's site:

[http://www.hsr.ca.gov/docs/about/business_plans/BPlan_2014_S...](http://www.hsr.ca.gov/docs/about/business_plans/BPlan_2014_Sec_7_CaHSR_Benefit_Cost_Analysis.pdf)

where it says:

Total Benefits $80,541,866,770

and

Grand Total Discounted Costs $34,639,084,822

------
HillaryBriss
Also this:

> _Big infrastructure requires fancy equipment and skilled engineers, who
> aren’t likely to be unemployed. The most at-risk Americans, if they’re
> working at all, usually toil in fast-food restaurants, where the average
> worker makes $22,000 a year. They’re typically not trained to labor on
> complex civil-construction projects. Subsidizing Big Mac consumption would
> be a more effective way to provide jobs for the temporarily unemployed than
> subsidizing airport renovation._

