While none of the projects is exactly apples-to-apples with the proposed deep-bore downtown tunnel, which would help replace the Alaskan Way Viaduct, the report finds that cost overruns are the norm. The downtown bus tunnel was 56 percent more expensive than projected, the Beacon Hill light rail tunnel was 30 percent more, the new Brightwater sewage treatment tunnels are stuck underground with overruns assured, but yet unknown. This data should be sobering to the City Council, which just approved plans to go ahead with the viaduct tunnel replacement option.
The only tunnel project that was under budget (by 54 percent!): the I-90 tunnels through Mt. Baker, which benefitted from 1980s recession prices and well understood soil conditions. While proponents of the post-Viaduct tunnel have argued that it's no Boston-style "Big Dig," it is an expensive project with many unknowns, including whether the amount of contingency money set aside for overruns is enough (certainly not if it's 50 percent over). Plus, even a small-percentage overrun on a multibillion-dollar project can cost tens of millions of dollars.
What is known is that most mega-projects go significantly over budget, and the problem is nearly universal. It's not due to incompetence but the perverse incentive system in place for political leaders. Danish researcher Bent Flyvbjerg has researched the subject extensively with a large database of such projects (including our own Sound Transit which, yes, was officially a financial boondoggle). What he discovered is partially summarized here:
Local officials predict low costs and big benefits to persuade skeptical citizens and to compete with other local governments seeking federal funds. Flyvbjerg calls the result survival of the un-fittest: Instead of approving the best projects, officials end up funding those that look best on paper. And by the time accurate figures rear their ugly head — and mega-projects routinely last longer than a decade, from conception to completion — the officials who launched them are long gone from office.
In other words, there's little accountability in the long term, and in the short run there's political value in pushing ahead (pleasing the business community, unions, political constituencies, etc.). The problem, Flyvberg says, is not having a strong, independent process or bureaucracy to bring objective, rigorous analysis to projects. Politicians end up being dishonest with an over-optimistic spin (I'll bring it on budget!) yet most electeds won't be around when the bills are due and the big hole that's been dug still needs to be filled.
The problem is not rare, it's endemic. In Flyvberg's analysis, in a detailed examination of 258 bridge, rail, or road projects, 90 percent were over budget and transit rider projections were usually over by 50 percent. The fact is, most projects cost more and deliver less than promised. And projects can even be amazingly expensive if they are stopped: The Port of Tacoma just pulled the plug on a $1 billion project and got nothing for the $190 million in public money already spent. A big part of the problem: They under-estimated the costs and were over-optimistic about the schedule.
Overruns and botched planning are not just a tunnel problem, but the assumption that Seattle's proposed deep-bore tunnel will come in anywhere at or near current estimates defies history.
That said, a mega-surface solution would likely be extremely complex and have many of the same pitfalls and it also require rigorous vetting. So too the so-called Mercer Mess fixes, the 520 expansion, and future city streetcar and light rail lines. None of these are exempt from the Laws of Boondoggle. In the end, the message of mayoral candidates Joe Mallahan and Mike McGinn should be that neither the tunnel nor any other major project should be allowed to skate by on optimism and Kool-Aid alone.