From Boston’s infamous “Big Dig” to Northern Virginia’s Dulles Rail, the true cost of big-ticket construction projects is often hidden from taxpayers. In “America’s Greatest Highway Robbery,” author Robert Skole outlines the cost overruns, shoddy construction, lax oversight and political corruption behind Boston’s $22 billion (including interest) highway tunnel construction project. From an initial estimate of $4 billion in today’s dollars, the “Big Dig” wound up costing almost three times as much as the Panama Canal.Bechtel, the same company that formed a consortium to design, engineer and manage the “Big Dig” project, is now doing the same for Dulles Rail, where costs have already more than doubled. The solution is life-cycle budgeting, which forces project managers to detail the full cradle-to-grave cost of highways, bridges, transit systems and other large-scale public works before they begin.
The Congressional Budget Office reports that life-cycle accounting is necessary to guarantee that infrastructure projects are cost-effective. Had life-cycle budgeting been in place when construction on the original Metro system began, the costs of maintaining escalators, elevators, and tracks would have been built in, and Metro would not now be facing billions of dollars in deferred maintenance. CBO also found that it actually extends the life of equipment, eliminates redundancy, reduces operating and maintenance costs and improves system reliability by as much as 70 percent. So why isn’t the use of life-cycle accounting more widespread?
Cradle-to-grave accounting makes it more difficult for politicians to resort to gimmicks to sneak projects past voters who, had they known the true cost involved, would never have approved them. This is precisely why citizens must demand life-cycle budgeting on all proposed infrastructure projects in the future, especially when times are tough and all available dollars must be stretched to the maximum.
For example, the cost of the New Jersey rail tunnel under the Hudson River, originally projected at $5 billion, somehow doubled to $10 billion in five years even though inflation is all but nonexistent, prompting Gov. Chris Christie to suspend construction altogether. The federal government is now demanding that New Jersey return $271 million that has already been spent in start-up costs. Life-cycle accounting makes it more difficult to low-ball initial estimates and then pad the construction budget later on projects that don’t deserve to see the light of day.
