# Cost Out Of Line



## TWA904 (Aug 26, 2019)

The world's longest rail tunnel is the Gotthard Base Tunnel in Switzerland. It is cut through the Alps(rock) and is 35miles/57km long. It opened in 2016 at a cost of $12 billion US.

The FinEst Link is to be a 3 tube tunnel under the Gulf of Finland, connecting Helsinki, Finland and Tallin, Estonia. It will 2 tubes of single track in each direction for passengers and freight. Plus there will be service tube. It will be 64 miles/103km an is planned to cost $17 billion US.

And now for the Gateway Project, to replace the tunnels under the Hudson River and the Portal Bridge. Estimated cost of the bridge is $1 billion, and for the tunnels, what maybe 4 miles Amtrak says what $20 - $25 Billion. I know we have the EPA and consultants but Amtrak is getting taken to the outhouse. Maybe we should have the Swiss come build the tunnels and bridge


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## Ryan (Aug 26, 2019)

The average cost of a pint of beer in Iceland is $10.76. In Vietnam, a pint of beer is under a buck.

Comparing costs between countries can be nonsensical and provides no useful information.


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## Devil's Advocate (Aug 26, 2019)

I find comparing costs between countries to be quite interesting and sometimes informative. Not caring about any given topic is normal. Going out of your way to dissuade strangers from discussing a topic you find useless betrays a bit of narcissism.


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## velotrain (Aug 26, 2019)

I just noticed another difficulty for FinEst on Wiki, "Railways in Finland and Estonia use 1,524 mm (5 ft [AKA Russian]) track gauge. The Helsinki–Tallinn tunnel would according to current planning use European gauge 1,435 mm (4 ft 8 1⁄2 in) tracks to connect directly to Rail Baltica which uses the same gauge."

One consideration for you TWA - Gateway has to be built in an area with a mega-massive amount of existing infrastructure - which doesn't have nearly as much of an impact on the two other projects you mention, and will also have infinitely more complex connections on each end. Although Gotthard had to cut through rock, I should think much of the heavy lifting - so to speak, was done by (semi ?) automated machinery and had minimal existing infrastructure to deal with. So, it should perhaps be looked at as being similar to the Big Dig, but at the cost levels of some three decades later in time.


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## Devil's Advocate (Aug 26, 2019)

I would think more rational project funding also plays a major role in the final cost. Here in the US we tend to fund things piecemeal, often requiring multiple authorizations that risk diversions and take-backs after every election. American construction projects also have to operate in the world's most expensive legal system and pay into the world's most expensive healthcare market. You also have decades of deferred maintenance and complicated landowner rights that can impede the path to success. This is just the tip of the iceberg though, and there are numerous other reasons and factors for these cost discrepancies, some of which are flexible and others which are so entrenched they may be impossible to change.


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## Ryan (Aug 26, 2019)

Devil's Advocate said:


> I find comparing costs between countries to be quite interesting and sometimes informative. Not caring about any given topic is normal. Going out of your way to dissuade strangers from discussing a topic you find useless betrays a bit of narcissism.



It can be, when there is appropriate thought and analysis put into the comparison. It isn't that I don't care (I do), it's that there isn't anything there to care about. The OP had none of the elements that would have made the comparison interesting and informative.


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## velotrain (Aug 26, 2019)

Devil's Advocate said:


> I would think more rational project funding also plays a major role in the final cost. Here in the US we tend to fund things piecemeal, often requiring multiple authorizations that risk diversions and take-backs after every election. American construction projects also have to operate in the world's most expensive legal system and pay into the world's most expensive healthcare market. You also have decades of deferred maintenance and complicated landowner rights that can impede the path to success. This is just the tip of the iceberg though, and there are numerous other reasons and factors for these cost discrepancies, some of which are flexible, and others which are so entrenched they may be impossible to change.



America has largely always worked on greed, corruption and litigation - which partly explains the layering of our society. Much of Europe, Japan, Canada and maybe Australia and NZ at least appear to a layman to be more functional.


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## railiner (Aug 27, 2019)

Countries like China can push thru amazing infrastructure projects partly because they don't every have to worry about "NIMBY'S", or other obstructionists...

Not saying I would want to ever live under a totalitarian government, but something can be said for a "benevolent dictatorship"...


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## Devil's Advocate (Aug 27, 2019)

railiner said:


> Countries like China can push thru amazing infrastructure projects partly because they don't every have to worry about "NIMBY'S", or other obstructionists...Not saying I would want to ever live under a totalitarian government, but something can be said for a "benevolent dictatorship"...


There is a vast middle ground between predatory capitalists and socialistic dictators.


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## jis (Aug 27, 2019)

It also helps the discussion to use reliably sourced numbers.

The cost of the Gateway tunnels themselves has been generally quoted as $11 billion, not $20+ billion. Even that number is high and as many of us have pointed out to the agencies like NJT and PANYNJ whenever they have given us a chance, the bloat comes partly from the "Christmas Tree Syndrome" wherein, just because you have a project that seems likely to get funded, everyone goes on and adds their favorite but ultimately unnecessary ornamental enhancement to it piling onto the cost.[1]

Finally they have taken that observation seriously and have started paring things back to the essentials thus reducing cost, the new estimate being $9.5 billion (See this article).

The OP is not alone in getting the cost numbers mixed up. The entire Gateway project which indeed has been quoted to have the price tag of something between $20 and $25 billion consists of way more than just the tunnels, and includes the Portal Bridges (two of them, currently only the North one is being worked on), four tracks all the way from Bergen interlocking (i.e. west end of the tunnels) to Dock interlocking (i.e. Newark Penn Station east end, replacement of the Sawtooth Bridge where NJT's M&E Line ducks under the NEC, plus some Penn Station South enabling costs, though not the cost of it.

I have never been able to figure out whether the late add on (Schumer pet project to allegedly run fast trains to Stewart Airport) Secaucus Loop connecting the NEC to the Bergen/Main Lines cost is included in that large number or if that is another separate item. There are also some articles in Railway Age that confusingly talk about the (cancelled by Governor Christie) ARC related build out in NJ that NJT planned (e.g. the Koppers Coke Yard and track connections to it from the NEC) as if they have just been moved over to Gateway, which is not the case.

Several people who have looked at it closely seem to believe that it should cost something like $5 billion or so assuming averaged costs in the industrialized world applied to the complexity of the project. I don't know how right or wrong they are. Suffice it to say Switzerland has traditionally managed to do civil engineering projects at significantly lower cost than Germany, France or the UK. E.g. the Channel tunnel after its 80% cost overrun came in at (using present day value of the original cost of of around GBP 5 billion, and early 2019 exchange rates) $16 to $20 billion (See for example this article) depending on which costs are counted as part of its construction (compare to $12 billion (2016) for the Gotthard Base Tunnels). Also using purchasing power parity instead of official bank exchange rates yield slightly different numbers. The Chunnel is three tubes like the proposed FinEst, of which the actual cost may or may not be what is currently estimated.

So coming back to the New Hudson Tubes or Gateway Tunnels, current estimates are running at $9.5 billion. That is still high by developed world standards, and ridiculously high by world standards. But it is being built in one of the highest cost markets in the world for which of course one gets the pleasure of paying a premium in cost. There is a very active attempt ongoing for cost containment, hopefully without undermining the quality of the product.

[1] The other reason of bloat for ARC was that NJT tried to add all sorts of additional tunnels and links to add real or imagined additional traffic to the tunnels in order to meet a bureaucratic cost per rider removed from road metric to get the project a high enough rating to make it a leading candidate for FTA new start funding. An unintended consequence I am sure of a well meaning FTA bureaucratic requirement.


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## velotrain (Aug 27, 2019)

velotrain said:


> America has largely always worked on greed, corruption and litigation - which partly explains the layering of our society. Much of Europe, Japan, Canada and maybe Australia and NZ at least appear to a layman to be more functional.



Curious, I found this and discovered that my intuitive selection of countries was accurate, at least in one arena. The US is on the same level as China, and below the rest of the developed and "civilized" world - and much of northern Africa. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality


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## jis (Aug 27, 2019)

Maybe we should stay with cost of tunnel projects instead of heading off into the world socio-political rabbit hole in this thread? There is the "Lounge" group of topics to start up a discussion of that rabbit hole if desired.


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## velotrain (Aug 27, 2019)

Sorry - Devil's Advocate's post made me wonder about possible historical-societal reasons behind cost discrepancies and that led me elsewhere.


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## jis (Aug 27, 2019)

velotrain said:


> Sorry - Devil's Advocate's post made me wonder about possible historical-societal reasons behind cost discrepancies and that led me elsewhere.


Hey it is a perfectly worthwhile thing to discuss. Let us just fire up a thread under the Lounge. Just my thoughts of course. Because otherwise we will very soon lose a place to discuss the cost and project details of the Gateway Tunnel and comparable projects specific stuff.


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## velotrain (Aug 27, 2019)

Thanks, but it was largely a personal investigation as I hadn't known much about those arenas. I'm not a political person and will try to stay OT in the future - Tunnels it is!


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## sttom (Aug 30, 2019)

European countries have a far different bidding process than we do. Here, only 1-3 companies may even qualify to bid on a project due to prevailing wage laws and laws trying to keep tax money within the state in question. In Europe, companies from anywhere in the EU can bid on projects. This is bad for some companies and countries since a lot of the former Eastern Block countries don't use the Euro yet, but it drives down costs through some amount of competition. 

Also European countries don't seem to be held to "lowest bidder rules" like we are. And if they lowest bidder has proven anything, usually the companies picked have the worst track record and usually end up going over budget. And this is on top of us doing projects (other than highways of courses) in chunks instead of all at once. Even inflation can increase the cost of it takes 15 to get all the money authorized, then whoops we need more money, let's fight for two more years.


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## neroden (Sep 16, 2019)

Even Indiana and Illinois aren't limited to choosing the lowest bidder -- they can choose the bidder with the best track record.

The bidding rules for NY State specifically and NY City more specifically are considered exceptionally bad by people who study such things.


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## JRR (Sep 22, 2019)

sttom said:


> European countries have a far different bidding process than we do. Here, only 1-3 companies may even qualify to bid on a project due to prevailing wage laws and laws trying to keep tax money within the state in question. In Europe, companies from anywhere in the EU can bid on projects. This is bad for some companies and countries since a lot of the former Eastern Block countries don't use the Euro yet, but it drives down costs through some amount of competition.
> 
> Also European countries don't seem to be held to "lowest bidder rules" like we are. And if they lowest bidder has proven anything, usually the companies picked have the worst track record and usually end up going over budget. And this is on top of us doing projects (other than highways of courses) in chunks instead of all at once. Even inflation can increase the cost of it takes 15 to get all the money authorized, then whoops we need more money, let's fight for two more years.



Public work in the US requires a bid bond to bid and a performance and payment bond for the final contract. Typically in Europe public work only requires a 10% bond.

The bonding requirement not only protects the owner from defaulting contractors and assures subcontractors and suppliers that they will be paid, but also acts as a prequalifier so that only qualified bidders will be bidding on the work.

The significance of the above is far more complex than can be discussed in this forum. Having worked in the industry for over 40 years, I am highly biased in favor of the US system. There are lots of treatises and law review articles written on the subject.

The costs of construction varies across the country and is influenced by a lot of factors. There is no doubt , however, that the cost of construction in New York City is among the highest. There are numerous factors attributable to this which I will not bother to go into in this forum..


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## ScouseAndy (Sep 25, 2019)

If you must try and compare costs of projects in differing countries then at least find a comparable project in a comparable city.

London Cross Rail wouldn't be too bad example to compare costs to. London like NY is historically in the top 10 of the most expensive cities in the world (currently London is just outside the top 10 due to Brexit and the devalue of the £ & NY is 7th) Both projects involve tunneling under a city with the cost of underpinning foundations and both involve tunneling under water. The main difference is that Gateway involves a bridge which Cross Rail doesnt.

Initial budget cost for Cross rail was around £15 billion but that has now increased to £17.6 billion and likely to increase further. In pre brexit conversions that would equate to around $27 billion dollars. 

When comparing Golden Delicious apples to Gala apples the cost of gateway doesn't actually look expensive especially as New York is the more expensive city of the 2 to do business in.


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## jis (Sep 26, 2019)

Hmmm. So you somehow think Crossrail is equivalent to Gateway... I wonder what you feel about ESA and its final bill after the (hopefully) last almost billion requested the other day is added on. 

OTOH of course Gateway will have a cost overrun of at least 50% before it is done if past experience is any guide [emoji51]


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## ScouseAndy (Sep 29, 2019)

jis said:


> Hmmm. So you somehow think Crossrail is equivalent to Gateway... I wonder what you feel about ESA and its final bill after the (hopefully) last almost billion requested the other day is added on.
> 
> OTOH of course Gateway will have a cost overrun of at least 50% before it is done if past experience is any guide [emoji51]


No I said if you had to compare costs then try and find a comparable project in a comparable city and suggested it wouldn't be too bad a comparison. 

Could you suggest a closer comparable project either in progress or recently completed?


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## jis (Sep 29, 2019)

Since you came up with some unspecified definition of "comparable" it is hard for me to meaningfully respond to your request.


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