(Unedited) Podcast Transcript 371: Transit Project Costs and Solutions

This week we’re joined by Paul Lewis, Policy Director at the Eno Center for Transportation. Paul discusses their report on transportation construction costs, Saving Time and Making Cents: A Blueprint for Building Transit Better.  We chat about the project database they created for the research, the different level of scrutiny between highway and transit capital projects, and some of the ways agencies can create better governance structures and lower project costs.

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Below is a full unedited podcast transcript.

Jeff Wood (43s):
Paul Lewis, Welcome to the Talking Headways Podcast.

Paul Lewis
Thanks for having me

Jeff Wood
Well, Thanks for being here before we get started. Can you tell us a little bit about your

Paul Lewis (1m 15s):
Sure. Yeah. My name is Paul Lewis. I’m the Policy Director at the Eno Center for Transportation. For those of you that don’t know, you know, we’re an independent think tank based in Washington, DC, we focus on transportation, everything transportation, specifically, public policy up and down the Federalist chain. And we’ve got work that spans all different modes and all different types of transportation. And we’ve been really recently looking at why does it take so long and cost so much to build public transit in this country? It’s a big question. And I think duly important right now and, and something that we’ve been spending a lot of time talking about with folks.

Jeff Wood (1m 54s):
So what got you interested in transportation? Was this something that happened when you’re a little kid or was it something that happened when you were older and kind of figuring out a travel around? How did that come about?

Paul Lewis (2m 3s):
I’ve always liked transportation. It’s always been an interest to me. I actually went and got my degree in engineering because I thought that was the way to get involved in building bridges and railroads and roads and all those kinds of things. And engineers do great work, but I found it a little unsatisfying because, you know, for example, we would design a road and all of the things associated with the pavement depths and the culvert sizes, but nobody asks what, why are we building the road in the first place? And that kind of drew me more towards the planning and operations and public policy side of transportation. I got my master’s degree in that area and I’ve been here in DC and studying public policy and working on public policy ever since.

Jeff Wood (2m 46s):
That’s interesting. I mean, we talk about that in the transit world, a lot about building projects and then whether we should build them. I have a couple of questions about that in a second, but I think that’s just like a fascinating question of not how we can design it or whether we can design it it’s whether it should be designed or, but here, you mentioned this before, but you’ve been working in putting together a cost database for transit projects over the last few years. What got the project started and why is it important?

Paul Lewis (3m 9s):
Yeah, I mean, I think that there was a story in the New York times, a couple of years ago that was talking about the most expensive mile of subway on earth and specifically the second avenue, subway spurned in part by some independent work that others have done Alon levy and others that have kind of looked at this issue of, you know, why does it take so much to build transit specifically here in the U S and we have some funders and some partners reach out to us and say, let’s, let’s see if we can kind of crack this nut and answer a couple of questions. And first, is there a systemic problem outside of New York kind of looking us wide? And if so, what is the root cause of it? And is there anything we can do about it? And so those were our big research questions.

Paul Lewis (3m 50s):
And so we spent a lot of time working through the data piece, trying to, again, in a, a high level, figure out how the U S compares to other developed countries, other democracies around the world. And we, you know, we started mostly making comparisons to places and Canada and Europe, where, of course there’s a definite premium, we’ve expanded that and included other places in south America and Southeast Asia and South Africa, you know, other independent democracies that, that, again, seem to have a consistently lower costs and faster timeline than we do here in the United States. When building rail,

Jeff Wood (4m 26s):
Did you all look at the history of kind of cost escalation? I know from my own interest anyways, I’ve always been interested in kind of the evolution of urban transit projects and the move from Sadie’s Metro systems that we started thinking about in the fifties and sixties, and then going up through light rail in 1981 with San Diego and, you know, the progression to bus, rapid transit, all those things. I’m curious if you all kind of looked back at the history of this a little bit, you know, I, I know it’s not part of the scope of work necessarily, but it’s interesting to see those cost increases and how those have impacted kind of what we’re building

Paul Lewis (4m 57s):
For sure. And, you know, if you look at the history of building mass transit and rail transit in this country, I mean, we used to build a lot of it, very, very cheaply, right? And then if you look at most American cities had a pretty extensive streetcar network. A lot of them had subways. A lot of those built pre 1950 at, at a fairly reasonable cost. I think things started to get a little bit more expensive for sure. We really looked at the last 20 years just trying to get a, a flavor for what’s happening right now and what can we do about it right now? But I think the history piece is important and the high costs to your last point definitely influence how we make decisions today. And that’s why, because things cost so much. That’s why we see a lot of new rail transit.

Paul Lewis (5m 39s):
That’s going down in the middle of a highway median or in a abandoned freight rail right of way, because that’s the easiest place to put transit. Sometimes it’s a good place and it’s not always a good place. And I think we ended up kind of forcing our decisions based on what’s easiest to necessarily what’s best for the potential riders and for accessibility.

Jeff Wood (6m 2s):
Yeah, because it’s interesting to look back on, on, you know, how much say that 1981 project costs. And I think it’s around somewhere in the $15 million a mile in 1980 $1, you know, kind of cost. And now we’re looking at $250 million a mile for surface light rail, $200 million a mile. And so I think that’s something that, as you mentioned, it’s just, it’s this progression and it’s frustrating, especially when it’s driving the decisions on alignments and things like that. I’m curious also what the process was for collecting data for this project, you know, and how hard is it to find data that actually is comparable between

Paul Lewis (6m 34s):
A perennial issue. Right. We had to, we spent a lot of time. We have some really, really good data staff that spent a good portion of last year, looking through construction, trade magazines, looking through public and publicly available information to try and get final costs. Right. And that’s also a challenge with this is that the cost of reported the beginning estimated, and then there’s usually some midpoint costs and things changed. You got to find that in cost, and then you have to find all the other data, how many stations, how much of it is elevated? How much of is it tunneled? Right? Cause all of that really matters to making an apples to apples comparison and it’s never going to be perfect. And there’s always a lot of caveats on the data, but I think it is helpful.

Paul Lewis (7m 14s):
We have now 250 projects in our database that do help to bring a large enough sample size so that we can say with some certainty that there are kind of systemic issues. Now, there certainly are some inexpensive projects in this country, but there are few and hard to find. We also did make some adjustments for inflation based on producer price indexes. We also made some adjustments for currency based on purchasing price parody. And we talk about that pretty extensively in our methodology there in the paper. But again, trying to bring some of those comparisons back to the U S so the U S can look at these other places and say, this, this is achievable. And I think that’s really the main point with a lot of the data

Jeff Wood (7m 55s):
You all looked at, you know, kind of data from Canada, Western Europe. And I was wondering why not a global database? I know it’s the first thing is probably a lot of work and a lot more money. But the second thing I’m curious why some of the other, you know, countries weren’t included

Paul Lewis (8m 8s):
Well. So, and, you know, I touched on this briefly earlier, but we had to constrain ourselves a little bit and we wanted to start with Western Europe because that’s how policymakers in this country, if in Canada, if we’re going to look in some kind of a mirror, we tend to use Western Europe as a comparitor for better, for worse, that tends to be a baseline. And we knew that there were some examples in Western Europe of some very dense cities that were building some very complex projects at very low costs compared to what we do in the United States. So there was, I think there was, there was a good story to tell there, we are about to release a second paper in this series that expanded that remit. And we’ve expanded that database as well.

Paul Lewis (8m 48s):
We included South Korea and Japan and Chile and Australia, Italy, South Africa, right? Other democracy. We wanted a democratic type government where there is some kind of community democratic participation, right. That’s kind of important to make a comparison to the U S and I didn’t mention Mexico is another one, our neighbor to the south. Who’s built a lot of transit over the last few decades to, to expand that horizon. And when you include those countries, the Gulf between the U S and the international competitors only increases,

Jeff Wood (9m 20s):
Were there any interesting projects that you found out about that you might not have known about?

Paul Lewis (9m 24s):
That’s a good question. The Chileans actually have, I was surprised to find by far the lowest costs in the world, the city of Santiago has built an impressive amount of subway in the past two decades. And they average at about 125 to $150 million per mile, fully tunneled. And that is better than any other place we’ve been able to find at least in the democratic part of the world. And that was really surprising because no, one’s really written, I think a lot on the Chilean example and, and their tremendous success. The Norwegians also have a pension for building lower costs, transit. And so we’ve really looked into their model and the south Koreans also have some really good examples of low cost projects.

Jeff Wood (10m 7s):
I think project costs are a frustration for a lot of advocates and professionals, but how do people outside of the, kind of the people that pay attention really closely to this stuff, how much do you think that they care and how much do you think that this aside from like those New York times articles, how much do you think this discussion spills out over into regular discourse?

Paul Lewis (10m 27s):
So I think it definitely spills out into regular discourse when there is a specific project and there’s a specific problem with it, right? And we’ve seen this with the purple line here in Maryland, or in other cities that are building light rail or heavy rail. And there’s always a big estimate and it’s a couple of billion dollars and everyone’s like, okay, we’re going to get with this project. And then they get down the road and okay, well, it’s going to cost so many billion dollars more. And we’re seeing this in New York city right now. And there’s, there does tend to be a lot of frustration, you know, why can we not crack this nut? And we all know what it means is not that, you know, the transit is not necessarily going to get billed that Pacific project, but that means that there’s going to be less money for other projects that are just as important in other places in the country.

Jeff Wood (11m 10s):
I guess that’s a frustration too, is that, you know, if we figured out how to reduce costs, there would be more money for other projects, or at least there would be more transit, construction, fixed guideway transit construction around the country. And it’s, it’s interesting to think about how much kind of we lose out on by having these extra costs come into play. For sure. I want to ask about projects that take longer and cost more in the U S but I know the answer is going to be kind of, it’s complicated and there’s, and there’s not a clear answer. So instead I’ll ask why it feels like the feds agencies, elected leaders, construction companies, consultants, they, they tend to let this kind of slide and they let it go and they’ve let it go for a number of years. I’m wondering why that’s the case.

Paul Lewis (11m 48s):
That’s a good question. I think part of it is that it’s been a slow growing problem, right? It’s not like all of a sudden one day construction costs were expensive. I think over time, it’s kind of gradually crept up on us and it’s really become apparent in the last five or so years that this is a really major problem. I also feel like there’s, you know, the kind of a general acceptance of, oh, this is what it’s going to cost and, you know, sorry, it’s not much we can do about it. There’s also, and I don’t know if this is really related to your question, but I’m going to talk about it anyway.

Jeff Wood (12m 20s):
Feel free.

Paul Lewis (12m 21s):
Yeah. Well, there’s a difference between the scrutiny on transit projects versus their counterparts in the highway world. And perhaps, maybe this is something that you want us to talk about more in a little bit, but I think it’s important to kind of recognize when we embarked on this, you know, a couple of people said, and, and we found it to be true. There’s a lot of public scrutiny and discussion about what a transit costs at the beginning and middle and end of its life. And there’s a lot of press about it, but there’s very little on the highway side and actually finding data about what a highway project costs at the end of its construction is, is really difficult. I think Utah is the only state that publishes post-construction final costs of the Taiwan profits.

Paul Lewis (13m 5s):
And so it makes it hard to scrutinize. And maybe that’s because we build a lot of highway projects and comparatively fewer transit projects, but there’s a significantly less amount of scrutiny and knowledge, frankly, about what it costs on the highway side. I do think that there’s a lot we can learn from highway DMTs and how they build projects, because they’re actually pretty adept at doing it. And we can get into that in a little bit, but I wanted to make that point too. It’s not, you know, this is talking about infrastructure broadly. It’s I think it’s becoming more expensive. We know more about transit because transit is at least a little bit more transparent on what this ends up costing at the end of,

Jeff Wood (13m 40s):
Do you think it’s in part because our schools are institutions are, there’s an inertia towards roads and there’s ultimately going to be more people focused on that subject and the delivery of those projects and Transit Project. Specifically, there’s not as much expertise. I’m not going to say there’s not a lot of it because there is a lot of it, but there’s not as much expertise. So every state DOD has a road building, you know, process and they do it, but not every state DMT also builds a library.

Paul Lewis (14m 9s):
Well, and that’s actually getting into some of our findings for it is that the governance piece matters, highway deities, state deities, those were designed and built as institutions to build the interstate highway system. Most of them were created in the fifties and sixties, or if not sooner than that, but, but really kind of organized around a building big projects. And then transit agencies were designed and built around operating big systems. And so we take an institution that’s designed to operate something. And then once a decade, we say, oh, go, go build a mega project. Right. And they don’t necessarily have the governance and the institutional capacity and structure to do that.

Paul Lewis (14m 50s):
Whereas highway right are designed to build those big things. They don’t always have the capacity to operate things in the same way we see that played out on the highways a lot. And so in that paradigm, one of the things that we found is there is an advantage to learning from state DMTs. You know, one of our case studies was comparing the 4 95 hotlines built here in Virginia and comparing that to the silver line that goes out to Dulles airport, to projects built in the median of a highway, kind of similar parameters, similar distances, and frankly, similar costs. And we, we interviewed people in of all the both projects and, and found very different processes and different culture approaches to these projects than we were anticipating.

Jeff Wood (15m 34s):
It’s interesting. There’s been a flurry of news stories about the transfer of design or building to state duties or other entities away from transit agencies, or even say the met council in, in, in Minneapolis last week, there was a bill I think, filed to kind of take away authority from the met council and put it towards the DLT and for the extension of the blue line. And then also there was an article yesterday in salt lake city weekly about how there’s folks there that want to move the construction from the transit agency or the local DDOT to the state duty that Utah got. And so that’s an interesting thing. Although I think a lot of transit advocates are worried about that. It’ll make, you know, the process a little bit watered down or give the transit less of a voice.

Jeff Wood (16m 18s):
I guess if transit itself doesn’t have a voice, but you know what I mean, the advocacy around it, the pressure around it. But it’s interesting in the report, you also mentioned that DLTs interact with environmental regulations differently. They, they go faster, they can get things done. You also suggested alternatives analysis kind of are troublesome. And so maybe there’s a way that the state duties can teach us something about that as well.

Paul Lewis (16m 39s):
You know, we, we talked, like I said, we talked to folks that did planning and building of highways and folks that did planning, building transit. I’ll use the NEPA environmental process. As an example, when you talk to the folks that build and do this for highways, it’s very methodical. It’s like, okay, you have, make sure you got your record clean and you go, and you do this. And there’s this community engagement piece. And it’s like it very methodical engineering. Sometimes you get sued. And when you get sued, you rely on your record. And then at the end of the day, you get a record of decision and it’s either yes or no. And it was very much like a, an engineering, methodical mindset. We’ve done this a million times. It’s a fine process. We’ll get it done. Whereas when you talk to folks on the Transit side, it’s, it’s kind of like a murder mystery novel.

Paul Lewis (17m 21s):
And they’re like trying to figure out, you know, where all the bones are buried. And, and again, this is not to say anything against the professionals working in this field, but it just it’s a different animal. Some of it’s because of the project’s different, but I think some of it is because the institutions are not as equipped to deal with these kinds of complicated processes. And one of our recommendations is to lean on the expertise at federal highways and at state DLTs because they have the institution and the culture for moving it forward. I don’t know that moving project delivery completely to a state tot is a good idea, but I do think that bringing staff over from a state deity or running some of these processes through a division of a state DMT can be a good idea to really, if nothing else, just to leverage that existing expertise on how to do this stuff,

Jeff Wood (18m 12s):
It feels a little bit like also infill versus sprawl. It’s pretty easy to do sprawl. It’s pretty easy to buy a parcel of land and meet it out. And then you don’t have any opposition from neighbors necessarily. You’re just kind of building it. And then you have infill, which is fraught with neighborhood complications. You have an MBS, you have all this stuff, how much of that plays into it? Like you’re building highways out into the periphery and areas like that. And then now we’re seeing also that highways in urban areas are getting clogged up and there’s a lot more pressure on them now in Portland and Houston and Austin and other places than there were previously. And so they’re starting to feel the same kind of things that maybe the transit agencies were feeling.

Paul Lewis (18m 50s):
That’s true. I think to some extent, I think the opposition to expanding a highway and an urban area is a different type of opposition than to building a light rail through a neighborhood. And there are different complexities of that, but there are a lot more simplicities involved with a highway expansion project than running or tunneling a light rail down in the middle of an urban Boulevard. Right. And then utilities is, you know, one of the biggest cost drivers of transit projects, you know, knowing where those utilities are moving them, you know, making sure everything’s done in advance so that the civil construction who can go quickly is a hard thing to do. And it’s something that transit projects in urban areas have to take care of.

Paul Lewis (19m 31s):
Whereas, you know, if you already have an existing highway and you’re widening it a little bit, the utility relocation tends to be a much easier process.

Jeff Wood (19m 39s):
One of the solutions you’ve suggested is a special purpose groups or special purpose delivery vehicles. I’ve heard this from a number of folks. I’m a colleague of mine who used to work at the FTA and now works for the city of San Jose or guideline suggested this because of some, he was a German Marshall fund fellow. He found that the French were really good at this, the Germans and suggested this for state stuff as well here in California, but it seemed to fallen on deaf ears. I’m curious, you know, what this recommendation means specifically and how it could be kind of implemented because I think it is actually a good, a good way to move forward, especially if you’ve given examples from other countries.

Paul Lewis (20m 14s):
Yeah. So let me explain that recommendation. I mean, I think what matters most is that a project has really good governance. And what that means, right, is that, does it have the authorities and responsibilities to move the project forward? Does it have a board of directors that’s invested in the project that is representative of the community that can really have moved the project forward? Does it have the right staff and the ability to attract top talent? So it isn’t relying on a bunch of consultants to move it forward, right? And then kind of those authorities in terms of, but then, and structure are really important in order to get them. Sometimes you have to modify your existing transit agency to do that.

Paul Lewis (20m 58s):
And that can be really, really hard. And so in, in those instances where it’s going to be difficult to modify your, your entity creating a special purpose delivery vehicle, whose board and executive director and staff, their sole mission is building out a Transit Project can be really compelling option. They use those a lot. In other countries, we saw that in Madrid and Copenhagen, Paris, Berlin, they use them in South Korea. We have some experience here in the U S for sure, but they are used more often abroad, but not always, right. This is where I was. We were talking earlier about Chile, Chile builds all of its rail transit in Santiago out of a capital division of its existing agency.

Paul Lewis (21m 42s):
Right? So they don’t use a special purpose delivery vehicle because they built that institution in house and are able to use it effectively. So it’s not a one size fits all, but it definitely has some compelling attributes, particularly when you’re unable to change your existing institution to move that project for

Jeff Wood (21m 59s):
What would that look like if we created a delivery of it, would it be, I guess every place is different obviously, but would the FDA be able to build, you know, create a delivery vehicle for projects that kind of it’s sent around the country like a traveling band of experts? Would it be a completely local thing where a state DOD, for example, had a delivery unit where their, their focus was putting projects together and making sure that they hit all the marks, obviously there’s processes and permits and stuff that are different in every city, but it feels like it would be helpful to have kind of a band of roving experts to a certain extent going around and making sure that projects are on time on budget and making sure that there’s no I’m shooting off into different directions.

Paul Lewis (22m 39s):
Yeah, for sure. I think the example we could use is what they’ve done in Los Angeles. LA has the biggest capital program in the country. Some of the current extensions of the subway system, the purple line, for example, the Crenshaw line, those are being delivered directly through LA Metro and their capital division, but the gold line and the expo line were both delivered through independent construction authorities and those projects where some of the lower cost projects in the LA region, not just because of the governance, but I think that there was, there’s some rationale for using that the governance structure there as a reason for those projects being particularly low cost and the gold line, I’ll use that as an example, there’s three phases of that.

Paul Lewis (23m 23s):
There’s an independent entity called the gold line construction authority. It has a board of directors made up of the jurisdictions in which it passes through it coordinates very closely with LA Metro and LA. Metro is the funder and the bonder. They receive those revenues. They then reimburse the gold line for its construction. But, but that is a project where the staff there are fully focused on delivering that project. And then in terms of the, kind of the roving band of experts, I mean, the FTA fills that to some extent there’s 10 regional offices that the FDA has around the country. They are pretty highly regarded the, the FTA staff and their project management oversight consultants that help out with projects, not just through the CIG process and setting up governance and the environmental review, but they’re really an asset.

Paul Lewis (24m 11s):
I think to these projects, I think an issue is that there are not a ton of them compared to, for example, there’s 10 district offices for FTA, I guess, regional offices. And if you want to be technically correct, there are 50 or 52 for federal highway, right? Federal highway has one in every single state Capitol, usually right across the street from the state tot. So there’s kind of that direct information sharing. Whereas for the silver line extension here in Washington, DC, Northern Virginia, the FTA regional office is in Philadelphia. And so they don’t have that kind of direct interaction in the same way that federal highways has. And I think that there’s some, some rationale for boosting that capacity to help at the beginning to help set things up and then continuing to help them through the frontal parts of the project.

Jeff Wood (24m 58s):
You mentioned utilities earlier. One of the things that I think we come across often is that when there’s a surface light rail line being constructed, coming to a street, all the costs of rebuilding the street, utility relocation, sidewalks are all heaped on the project costs. Is that something you saw a lot of when you were looking at project costs was collecting all these other things that weren’t necessarily related to the transit onto the project cost?

Paul Lewis (25m 20s):
Sometimes it really depends on the project utility relocations, a tricky thing, because technically by the legal basis in this country, utilities that run in a public right away, they are required to pay for any relocation if the city right, or whoever owns the road requires them to do so. So technically any utility would have to be relocated at the expense of the entity that owns it. The problem of course, is that a lot of utilities are publicly owned and a lot of public are like, well, you know, okay, you could, you could make me the public, you know, gas provider or electric provider move the wires, but then I’m going to have to increase rates on all the customers.

Paul Lewis (26m 3s):
And so then they’re like, well, let’s just keep it on the project because we already have the money. Or, and so they work out some deal to use the existing funds of the project. Right. And that adds cost. And I think that there’s, there’s a lot of those kinds of things. And then the question of course is, okay, so you’re replacing a water main and you got a 12 inch water main going down the middle of the street while we’re digging it up, let’s put in a 36 inch water main cause we’re expecting population growth. Does the project cover the cost of the replacement exactly as it was, or do they cover the cost of improvements to those utilities? So there’s a lot of those kinds of questions that every single project works out on its it’s sometimes it goes into a legal battle.

Paul Lewis (26m 45s):
And then, and we say, we’ve seen that in a bunch of different cities setting up those agreements at the very beginning is so crucial. And I think that’s a big part of it is setting those expectations, especially with the utility companies, because then you know what exactly to expect. And they, the project can budget accordingly. The more challenging part. And I think you were getting at, this is some of the other betterments or things, community desires of the project, you know, what becomes part of the project’s budget versus what becomes part of the city’s budget while they’re digging up the street is something, again that needs to be hashed out early, but isn’t always done.

Jeff Wood (27m 20s):
You mentioned a lot in the report complexities, is that part of the complexity or are they more things kind of stacked up on top of that as well?

Paul Lewis (27m 28s):
Well, so these, these projects are incredibly complex, right? Because of all the things, you know, all the different actors, the fact that they’re going through urban areas, the fact that they’re operating entities, it’s not like you’re just putting down some asphalt and hoping people drive on it, right. You’re actually operating something that’s going to require signaling and safety systems and all these other kinds of things that are part of building a Transit Project. So they’re very, very complex in that nature. And then on top of that, communities want a lot of things out of the project, or they’re going to be taking slices of property. They’re going to be digging up the street. And so there’s a lots of demands for customization and specialization of the system to make it unique or match whatever the community is, is wanting.

Paul Lewis (28m 12s):
And that customization comes at a pretty steep cost. And, you know, I think that that adds a lot and it’s not just the final product, but communities often want a lot of things out of the project during construction, right? You can only work, you know, at certain times of the day and you have to restore street traffic during rush hour. And you know, a lot of things that make it really difficult to build a big project and end up escalating costs pretty quickly.

Jeff Wood (28m 39s):
What’s your biggest frustration with transit capital costs and construction, like personally, like what like hits you the hardest.

Paul Lewis (28m 45s):
So when you get into it, I think you find that there’s so many things that we could be doing just a little bit better and it would have huge implications in the long run. And I think that it’s the inefficiencies that drive you crazy as you’re, you’re getting into it. So let’s take an example. They’re currently building the purple line extension in Los Angeles, going out to Santa Monica. It’s a great project going to attract a lot of people to the system. And part of that, they’re tunneling underneath Wilshire Boulevard and going through Beverly Hills and the city of Beverly Hills said to LA Metro, that you are not allowed to work during the week. We want to make sure that winter Boulevard is open for traffic. And so you can work on the weekends.

Paul Lewis (29m 26s):
And then at the end of the day on Sunday, you got deck everything over. So the traffic can resume. And that was a stipulation. They put on the project then in March of 2020 with the stay at home orders, LA Metro convinced the city of Beverly Hills to switch, to allow them to work during the week and essentially allow seven day a week construction. And in doing that little change, they finished the tunneling of the station seven months ahead of schedule. Right? And I think that that kind of rip the bandaid off approach we found is so much more common in other countries, right? They’re like, look, we’re going to be in your neighborhood. It’s going to be loud. It’s going to be noisy.

Paul Lewis (30m 6s):
We’re going to be disruptive. And then we’re going to be gone in a couple of weeks because you’re going to allow us to come in here and disrupt everything. And this whole dance that we make construction companies perform to make sure that there’s a minimal impact, I think ends up making it worse in the long run because we have to endure this awfulness for so much longer. And if we would just take an intake, her mentality, just like, okay, it’s going to be awful. And it’s going to be over. We would be so much better off in terms of costs and getting these projects done so much faster. How much

Jeff Wood (30m 40s):
Does that play into alignment decisions too?

Paul Lewis (30m 43s):
That’s a good question. And I, and I think what agencies end up doing, and if you look at a lot of new light rail and heavy rail, a lot of them go down highway mediums. A lot of them go down either underused or lightly used freight rail right of way. And in some instances that can make sense, but in most cases they’re doing that because it’s expedient, it’s easier. It’s, it’s a lot easier to put it in an existing right of way that nobody lives on or, or there’s no utilities than it does down in the middle of the Boulevard where everyone lives. And that’s where we had some problems in our data of making those apples to apples comparison. If you look, the Paris region is building a ton of light rail.

Paul Lewis (31m 24s):
And so as the U S a lot of what we build is light rail. But when you look at the projects in Paris, they are putting these down the middle of boulevards in historic neighborhoods with a ton of density. And they’re, they’re taking away lanes from cars and they’re moving utilities, and they’re doing it at a fraction of the cost. And it takes us to build along the side of a freeway. And I think that kind of exacerbates, you know, we found that there’s a premium in the U S but I think in reality, it’s a lot bigger because it’s hard to differentiate the types of projects that we’re building, even if it’s all at grade, for example,

Jeff Wood (31m 58s):
The construction costs also, there’s another interesting discussion that you all had about contracts, especially from a piece that you wrote in October that really piqued my interest. It seems there’s a drawback to contracting with one company to do a whole project. And unbundling is imminently beneficial. How are other countries benefiting from separating out projects and doing segments of lines and contracting that with one company and then contracting with another company to do the stations, making sure that the segments are small, how much benefit is there from that un-bundling as it were.

Paul Lewis (32m 28s):
It’s a great question. And it’s something that we weren’t expecting to find as part of this, but the premise at least is here in the United States, we tend to say, okay, we’ve got a 10 mile train, and we’re going to let a massive design build contract to have one designer come in. We one contractor, we can manage this whole thing, very expediently and build the whole thing within one fell swoop. And there’s, there’s some rationale to that, for sure. When we started talking to other countries, that type of procurement is actually really rare. And in fact, you rarely see a single contract for more than, you know, 150 or $200 million.

Paul Lewis (33m 8s):
And I’ll use chili as an example. And I think this is a big part of why they’ve been successful. At least in their context, they have a 10 mile subway extension. What they’ll do is they’ll take that 10 miles and they’ll divide it into five different contracts. And so they’ll do all the design and then they’ll let the construction contracts out for the civil works in two mile segments, more or less, and no two tunnelers are able to have adjoining contracts. And no two toddlers are able to have more than two contracts on the whole line. So you encourage this competition because the contracts are no more than 150 or $200 million. Smaller companies can participate in a way that, you know, there’s only a few huge design builders that can build a, you know, a hundred or $2 billion line.

Paul Lewis (33m 54s):
And if there’s a problem with a contract or a contract, or they can resolve it, or, or they can cancel that contract and bring in one of the other contractors to finish the line, right. We saw that here with the purple line in Maryland, where you’ve got to now a $3 billion contract, they’d had a disagreement and so work stopped for a year. They didn’t have this huge structure sitting there in the sky with nobody working on them for over a year while they’re trying to do this contract dispute, had that been divided up into a lot of smaller segments. They would have been able to reassign that contract and work would have proceeded regardless. So it gives the agency a lot of leverage, but it’s also, I think it’s important to recognize it’s harder to manage.

Paul Lewis (34m 36s):
So you have to spend more time and resources hiring public agency staff to make sure that those connections between all the contractors between all the stations between, you know, the, the civil works that then involve into laying track and, and signaling systems is well coordinated. And so it, it takes a little bit more of a public sector skillset that we don’t necessarily invest in. But I think that investment in other countries has certainly paid off and not to say that it’s the silver bullet. And I think that there’s some great examples of design build or progressive design builder, or that can achieve really impressive projects. But this seems to be a really good way of giving the agency more leverage and more competition, frankly, when building these projects,

Jeff Wood (35m 21s):
Is there a good way to advocate for agencies to get more of their own staff to focus on this? I know a lot of times they, you know, will hire out because they’re doing one project at a time. And so they feel like, you know, it’s not important to have staff on board, but I think that, I feel like that’s, that’s kind of a common theme that I’ve seen is having more in-house staff seems to help over the term.

Paul Lewis (35m 43s):
Yeah. And that’s something that we definitely agree with in our paper, especially at the project management side, those really have to be public sector staff and they have to be real well-qualified. And I think we’ve seen from abroad, you can attract those people because they want to work on the next big project. Right. And they are not looking to sit at an agency for, you know, 50 years or whatever. Right. And not to say that that’s a bad thing, but the people that want to lead these big projects are attracted to the work. And so the issue is that agencies often have salary caps and can’t attract that top talent from around the world to come work for them. And so that’s where the, you know, changing that dynamic or creating a special purpose delivery vehicle that doesn’t have the same constraints can be really helpful in attracting that staff.

Paul Lewis (36m 28s):
And this is, again, I think consultants provide tremendous amount of expertise. And I think that in our recommendations is definitely in line with having consultants perform discreet tasks and help out on specific things. But in terms of project management, that really needs to be squarely in public sector capacity.

Jeff Wood (36m 47s):
How important is community engagement to this process? Overall? It seems like something that’s come up a lot lately.

Paul Lewis (36m 53s):
So community engagement is one of those things that is super critical to a project. I mean, if you look at the history of community engagement in this country, you see it’s pretty fraught with some, some pretty poor decisions in transportation. And the environmental review process does now require that engagement is, is part of planning and project decisions. I think the recommendations in the paper are twofold. I think we need to invest more in community engagement, and that’s not just doing more public meetings, but it’s actually hiring staff that are dedicated to that component of the project that serve as those community liaisons, that answer questions that kind of meet community where they are and do so in a transparent matter.

Paul Lewis (37m 37s):
So that, that investment in community engagement is also coupled with empowerment of agency staff to say no to certain things from the community. And, and again, not to say that recommendations from the community are not important. They should be documenting those, those interactions very transparently, but ultimately in order for project to move forward, agency has to make some tough decisions and staff need to be empowered to make those decisions based on their expertise. The trust that we’ve given them as public servants, along with the documentation that they have of community engagement. And I think that’s where we missed the mark, right? We either don’t engage the community enough and make too many decisions in the ivory tower, or we defer to community demands too much to the detriment of the project.

Paul Lewis (38m 27s):
And so striking that right balance is so critical to a project moving forward in an effective way.

Jeff Wood (38m 33s):
It’s interesting thinking about community engagement, as it pertains to say something like the alternatives analysis and the theater that goes along with that sometimes because of alignments that are already chosen route technologies that are chosen, it feels like that part of reforming community engagement to a certain extent is reforming the process of thinking regionally about projects as a whole. Do you find that to be the case as well?

Paul Lewis (38m 56s):
For sure. And I think the concept that we’ve really focused on in our paper is that the community engagement piece needs to happen earlier and more direct. We tend to not make or finalize a lot of decisions in the planning process. And we say, okay, well, we’ll, we’ll resolve that in the environmental review and the alternatives analysis. And that’s where you end up with projects that have, you know, 15 or 25 or 35 different alternatives that are reviewed where an environmental review document really should just be a couple final alignments or alternatives that, that you’re considering the other decisions should be made in the community engagement process associated with the planning process done before that.

Paul Lewis (39m 39s):
And for whatever reason, lots of different reasons. We tend to push too much of that onto the environment review process, which ends up making these documents hugely long and so impenetrable and not particularly useful to moving forward in a responsible way,

Jeff Wood (39m 55s):
How much does the need to have a vote to pay for a lot of these projects cause problems. So for example, you have to have an election in Seattle, in Los Angeles, in Austin to actually pay for these massive network projects that they’re putting together. But in order to have a vote, you have to have enough information for the voters to vote on. Whereas in the highway world, they’re building a highway, they’re going to do it, whether you vote, no, you don’t have to vote for it. How much does that play into that whole, you know, rigmarole as well?

Paul Lewis (40m 27s):
It’s a good question. And I think that it’s tied up into some of the expectations we put on transit versus tie ways. For sure. I think part of it is that in order to get people to increase their taxes, to pay for transit, you’ve got to, you’ve got to show them what they’re getting. It can be effective if you do the community engagement. If you have a solid plan in place, then people know what they’re voting for. They’re on board with it. And in some cases that then gives the agency a mandate to do the project that the voters voted for. Of course, that can get messy when, when you start actually making designs, right? They’re not voting on a design, they’re voting on a high level plan, but that’s a, I think a really interesting and valid question. I’m not, I’m not exactly sure how it would play out.

Jeff Wood (41m 9s):
It’s also interesting when you have quote-unquote community partners that end up projecting the project, and then the project dies. Duke university comes to mind as one there’s others as well around the country. That type of thing doesn’t necessarily happen on highway projects as well. And I don’t want to dwell on the highway versus transit discussion as it’s something that gets talked about a lot, but those types of little kind of tweaks can be frustrating. What’s been the response to this work so far. How, how have people responded to the findings and what you all are discussing?

Paul Lewis (41m 39s):
It’s been really interesting, you know, we’ve briefed a lot of organizations. I think that there’s a recognition that we need to crack this nut and, and figure out how to change the paradigm. I think a lot of agencies that are building, especially with the IHA and, and unprecedented amounts of money coming from federal programs to invest in this kind of stuff, people want to make sure that they can do it effective. And so we’ve had a lot of briefings, a couple of follow on projects with some of the regions around the country that are building big things and want to use this and use other examples as a good way to tackle the issue. And I think, you know, this is where I’ve learned a lot because I’ve talked to hundreds and hundreds of people about this subject, but I’ve never built a big project.

Paul Lewis (42m 23s):
And so part of my role is one of the questions start to get really specific, you know, beyond the scope of our paper, that’s where we like to connect people with the builders and the project managers and constructors from around the world that have done this successfully, that we’ve learned from. So an agency isn’t trying to learn through us, but directly from the people that have done this well from the star,

Jeff Wood (42m 45s):
What’s something that you’ve been surprised about when you’re doing the research. I mean, I know you’ve been coming across a number of findings. The contracts was interesting and something a little bit different, but is there something that popped out that really was surprising in doing the research and in cataloging the projects and talking to all these folks around the world?

Paul Lewis (43m 4s):
I think there’s a lot of surprising things because anytime you talk to other people in the world, you really learn so much. One thing that’s stood out to me is the value of just talking to other people or frankly, riding other systems. And because of COVID, we did not have the opportunity to travel to some of these places, but I spent a lot of time looking on Google maps and talking to people in places like Copenhagen, right? And this is one really cool example of a totally different paradigm for building a project, but also one that isn’t trying to reinvent the wheel. The system, and Copenhagen feels much more like a automated people mover at an airport than it does a big Metro, but it has the capacity because they used off the shelf, automated people, movers from an Italian manufacturer.

Paul Lewis (43m 50s):
Every station is exactly the same because they’re automated. The trains come every 90 seconds. So it’s, they make up a lot of the capacity in that way. And because they had small trains, they were able to kind of shoe horn this into a historic city and build a Metro system from scratch. And again, they didn’t do anything new. In fact, they really just kind of copied what other places had done and just put it all together and did it really effectively. And I think the temptation here in the United States is that every region is unique. Every transit need is unique. And so we need totally customized transit vehicles and we need no totally customized train stations. And so we’ve kind of close our eyes and we don’t look at what other people have done.

Paul Lewis (44m 32s):
Whereas just, you know, copy paste is sometimes one of the most effective ways at saving a lot of money because the plans and the details and the, the outcomes are already there.

Jeff Wood (44m 43s):
I enjoy riding on that Metro because it’s a people mover, there’s a glass front to it, and you can look out towards the track and just kind of be mesmerized by the tunnel. And usually there’s the driver there that gets that view. But in the Copenhagen, Metro, you get the view of yourself, which is for a transit nerd. That’s pretty cool.

Paul Lewis (44m 58s):
Yeah. They have the same thing. And if you go to Vancouver, it’s a very high capacity system because anytime they need a train, they can hit a button and the train moves, right? You’ve taken some of the workforce challenges associated with scheduling out of the picture. You reduce costs. It’s a very safe system. They have attendance in a lot of the stations and sometimes on the trains to keep things safe. But it’s a system that’s remarkably usable. Let’s hope

Jeff Wood (45m 23s):
Who I, you can finish soon. Well, where can folks find the report if they want to get their hands on it?

Paul Lewis (45m 31s):
Yeah. So the report is available for free download on our website, you know, trans.org. If you go to project delivery dot Eno, trans.org, you can view the download or review the web version. And then there’s also a version to download. And of course, if you have any specific questions you can reach out to me directly. My email is P Lewis, L E w I [email protected].

Jeff Wood (45m 53s):
Awesome. Well, Paul, thanks for joining us. We really appreciate your time.

Paul Lewis (45m 55s):
Absolutely happy to be here.