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Comment by jonawesomegreen | Hacker News Reader

News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in. - Willie Brown (former SF mayor)

I think the inability of politicians to have a real conversation about costs is a big part of high construction costs. Without this sort of difficult conversation it's hard to plan and try to mitigate things that might cause ballooning costs because you need to pretend that don't exist in the first case.

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While I agree that the attitude shown in the quote is undesirable, I think it's more a symptom of the problem, not the underlying problem itself. He's essentially right. Infrastructure projects are constantly shot down because of cost concerns, yet we have crumbling infrastructure that needs to be replaced. If estimates became higher, approvals would decrease.

One other piece I haven't seen mentioned yet: large construction projects that take years to complete are incredibly hard to estimate accurately, because unpredictable economic swings can cause the cost of items to vary quite a bit between when the estimate was produced, and when the work was actually being performed and purchased.

This was one of the reasons why the Big Dig's estimates were so far off. Although there are a dozen other factors with that particular case as well.

Why can't the cost of materials be hedged against rising?

Costs above initial estimates should only happen when there's an unknown (e.g, digging discovered a really hard rock layer that nobody knew about). Or weather issues beyond prediction (like tornadoes or hurricanes).

> Why can't the cost of materials be hedged against rising?

How, other than by buying everything you need up-front, finding a place to store it until you need it, and hoping that it is still usable when you do?

You can buy futures on basically any commodity to hedge against price fluctuations.

Are you assuming cost increases are due to materials? labor is a huge cost, it might even exceed materials.

One factor in play is that many people only have experience with household-scale budgets. An intuition about what "millions" (let alone "billions") actually represents in terms of economic power is hazy at best. Business scale budgets sound extravagant; metropolis-scale or state-scale budgets are mind-boggling.

How does such a person know what's "too much"? Absent a reasonable working model of costs involved in infrastructure projects, it's all going to sound like too much.

And past a certain point on a spectrum of temperamental tendency to attribute laziness or wastefulness to other people, the working assumption is going to be it's boondoggles all the way down.

The only way to fix this -- if it can be fixed -- is reinforcing narratives about the value of projects and measured collective values.

I think you have a great point but it’s only part of the problem. I can affirm your sentiment with anecdotal experience. At my company cost discrepancies of less than 20k are considered a rounding error.

Well, then, how is it other countries can make better estimates? I get that for various reasons our costs are higher, but why can’t we at least project costs more accurately?

Thats purely corruption. I always explain to my argentinian friends, used to the petty corruption of putting friends and family in public positions, that the us does corruption at a much bigger scale: at the legal one.

The transbay terminal is one of the biggest rip-offs ever. It cost the revenue of sales taxes of the city for years. And it doesn't even work, while the "transient" station that must have cost almost nothing works perfectly fine.

> Thats purely corruption. I always explain to my argentinian friends, used to the petty corruption of putting friends and family in public positions, that the us does corruption at a much bigger scale: at the legal one.

Oh, Willie Brown did that too. He appointed his lover to two state commissions (he was the speaker of the California Assembly at the time), then helped her become district attorney in San Francisco.

She's quite talented.

Well surely she didn't get any higher than that at least, right? /s

Transbay was financed via the TJPA by auctioning off the rights to build very tall buildings near it. It wasn’t financed by sales taxes.

The fungibility of money pulls yet another trick.

Every single tax dollar can be raised to relieve poor sick children of their ailments.

It's not fungible if people are bidding up that land because they expect it to be worth more thanks to the station you'll be building there. Unless of course you are advocating scamming people by claiming you'll build it while already having privately decided not to do so.

Its pure trickery: the value of the land is not of the public officials, but by constructing a failed transit center they get to spend billions, while also spending billions raised on sales taxes.

In both situations, the person on the street is stuck with a broken station and paying an extra dollar for coffee everyday.

Sorry that temporary one worked like ass. Rainy and wet, cold, hard to navigate around, just a big parking lot and some tents.

worked? You mean works. At not 2 billion +

I hope the irony of this topic being discussed on a (mostly) software-related forum isn’t lost on anyone.

I must be a bit dense today, what irony?

I assume he's referring to platform lock-in ala Microsoft Office, AWS, Oracle, or Apple's walled garden driving future decisions. So the first software decision is a down payment until your technical debt hole is so big you can't do anything but throw money down it.

Huh? No, I think he's referring to large scale software projects costs being high, and such projects being often late or even failing.

Big software/systems projects being notoriously difficult to estimate and manage, cost overruns the norm, etc.

It is lost on me.

What do high construction costs have to do with HN?

inability to predict the time and effort needed

The title itself is deficient -- this isn't an article about general construction costs, it's specifically about rail transit construction.

As ams6110 wrote above, it's ironic to have an article criticizing the high costs of construction projects on a developer website -- given that large software project costs are the same or worse.

It's like having a post about how ecologically unfriendly the fast food industry is on Exxon's website.

ha, i did not see this comment before posting mine, but the irony was not lost on me.

or rather, is it even ironic? it seems totally germane to a forum full of geeks with a wide spectrum of interests, many (most?) of whom are software devs.

besides the inherent difficulty of estimating the resources required to finish a large project that hasn't been done before...

i think what willie brown describes here is also part of the problem providing estimates for the time required to complete software projects: if we gave more honest answers as devs, bosses and people signing contracts would blanche, so instead of standing firm, we go lower, or cut corners, or both.

i think the two things compounded together (inherent difficulty of estimating large unique projects, aversion to seeing real costs) are why estimates so often skew too low when we're trying to predict how long it will take to write a thing.

In fixed priced contracts, that strategy makes employer loose money. Some projects truly should be be starter, because their price is indeed too high compared to benefits.

yeah, and i'm absolutely not trying to justify this outcome, just trying to think out loud about the unsatisfactory state of things.

The politicians can’t have a real conversation about costs because the legal and political complexity of our society has reached such high levels that it is impossible to accurately project costs multiple years into the future.

It's possible, to a degree that would be enough.

But doing a feasibility study that gives an estimate is much different from doing a full plan, which is still quite diferent from having fresh surveyed maps and ready to build blueprints, and all of that is just before doing the first strike with a backhoe.

And it's no wonder everything seems so complex, because the people who are able to cut through the bullshit are usually ignored, because people don't like to accept the fundamentals. They cling to their biased beliefs about costs, project management, design, estimation methods, etc.

> The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.

Robert Moses is quoted as saying the same thing. Once you start, there is no choice for the public but to push on and finish.

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