Wednesday, October 18, 2017

Expect Metro's transit proposal to have major cost overruns if built. Real cost probably $8 billion to $11 billlion.

Mayor Megan Barry released her plan for mass transit yesterday. It calls for 26 miles of light rail, improved bus service and a subway for downtown drilled through solid limestone.

The stated price tag is $5.2billion. On any major government project like this, I think it is safe to assume major cost overruns, so realistically we are probably talking of a price tag of closer to $8 billion. Most rail project cost 40 to 50 percent more than projected and some final cost are greater than twice the estimate (link). 

When Denver's Regional Transit District (RTD) decided to build the West light-rail line, it projected that it would cost about $250 million. Adjusting for inflation, that’s was about $350 million in 2012 dollars when the project began; when the line was completed the cost was $707 million. A Boston-area subway-line extension was estimated to cost $1.4 billion  and came in at $2 billion, Cost overruns is the norm. For a list of other projects around the country and to compare the estimated cost to the real cost follow this link.

The $5.2 billion estimated price tag is only for construction. No estimate of the operating subsidy has been offered.  Projects of this kind never pay for themselves.  The fare box receipts do not cover operating cost.  More than likely, bus service will actually surfer it this transit system is built.  To fund the operating cost of the rail system, funds will likely be shifted from bus service pay rail operating cost.

For my views on transit issues follow this link.

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