Monday, November 14, 2005

Flyvbjerg: "Strategic misrepresentation (lying) drives transportation projects."

Capital Metro: Turn that 6 upside down

November 14, 2005

Ben Wear
Austin American-Statesman
Copyright 2005

Particularly sharp-eyed readers might have noticed that I've begun referring to Capital Metro's "$90 million" commuter rail project. Up until a couple of months ago, I'd always used the $60 million number the transit agency put forward during last year's rail election campaign.

Why? Well, Capital Metro always said it was going to lease the six train cars it will need initially for the Leander-to-Austin line. The cost of buying them, the agency acknowledged, would have been about $30 million. But instead, officials were going to pay them out of operating costs over the years.

Now, it turns out, they're going to borrow money from a party to be determined, actually buy the dang things, then pay back the money out of annual operating costs. Sounds pretty similar, right?

Anyway, $90 million was always the more forthright number. But it was also somewhat less palatable, too close to an ugly nine-digit figure, so Capital Metro went with $60 million.

Which brings me to Bent Flyvbjerg. No, I didn't just doze off and hit a bunch of random consonants on the keyboard.

Flyvbjerg, whom I couldn't reach for comment, is a professor of development and planning at Aalborg University in Denmark. He has made a name internationally and something of a sub-specialty of examining how transportation agencies estimate costs.

And he doesn't like what he sees, particularly with rail projects.

"Project approval equals underestimated cost, plus overestimated revenue, plus undervalued environmental impact, plus overvalued economic development effect," he wrote in a recent article for the Engineering News-Record called "Misrepresentation drives projects."

He goes on: "Undoubtedly, most project proponents believe their projects will benefit society and that they are thus justified in cooking costs and benefits to get projects built. The ends justify the means, or so the players reason."

Flyvbjerg and his colleagues studied 258 major transportation projects built in the United States and around the world since 1920, comparing the estimated cost at the time the decision to build them was made to the actual final cost.

What they found in their 2002 report was that projects are underestimated nine times out of 10 — this is true no matter where they looked and when — and that actual costs, on average, were 28 percent higher than originally forecast.

Rail projects, most often subject to public votes, were underestimated by almost 45 percent, but road projects were off by a mere 20 percent.

This is no accident, Flyvbjerg and his colleagues found.

"Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying," Flyvbjerg writes.

When it comes to transportation cost estimates, he said, the public's best policy is to distrust and verify.

With huge project plans swirling throughout Texas, from the Trans-Texas Corridor to the Austin-San Antonio commuter line to Capital Metro's plans for expansion, Flyvbjerg has a point worth remembering.

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