The Progress Ireland Institute did a nice analysis of global transit projects as part of examining how to improve project delivery in Ireland, with lessons for the larger Anglosphere. The chart below shows the massive discrepancy in normalized costs. Over 10x across the range of countries!*
What accounts for the difference in construction cost per kilometre? The most important difference between models is in their use of in-house expertise. Metro projects in English-speaking countries don’t tend to employ experts directly. Instead of employing experts directly, they hire consultants to manage the project on their behalf.
In European (and East Asian) countries, by contrast, the state employs its own corps of experienced technical staff. This subtle difference in the employment terms of a few dozen project leaders has big consequences for the efficient delivery of the project.
Eric Goldwyn is an NYU Assistant Professor and Program Director of Transportation and Land Use at the Marron Institute, and lead author of the Transit Costs Project. He described the common factor among the most efficient metro builders: “Among the cheapest builders there’s a wide variety of delivery models. Some use on [public-private partnerships], others do not. They rely on consultants to varying degrees. But what they all have in common is a sophisticated state client who can manage the project.”
What’s the big deal? If the project is being run by experienced people, what does it matter about the fine print of their employment contract? Who cares if the engineers take their paychecks from the state or from a private company, hired by the state?
The precise employment status of managers matters because of the question of control. The builder of a metro project can outsource a million tasks to private companies: the digging of tunnels, the manufacture of rolling stock, the financing, the signalling system, the planning application. But one thing it can never outsource is the control of the project. Control of the project must always sit with the owner of the project, the client. That’s a responsibility it can’t shirk.
*This difference also goes to show you government is a metaphysical invariant. Operational performance can change.
