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Comment by frisco | Hacker News Reader

There is another degree of freedom here: project cost. Why on earth does 0.32 miles of residential road cost $1.5M? Having just managed a construction project much larger than this stretch of road myself, I am certain that a lot of the blame here lies with the contracting process as well as outrageous fees (and just sheer inefficiency) from the engineers and contractors. There is no valid reason this should be so expensive. In the rest of the world, I guarantee you they are not paying over a million dollars for something like this and their standards are just as high if not higher.

I’m not sure there is an opportunity to fix this - I’ve spent a lot of time thinking about this now and modeling it out - by building a better construction company: most of the problem is, instead, essentially political.

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I was just thinking about this same thing with my city. We have a fabulous little downtown square and the parks department is proposing to shut down a portion of a street by the square to make it pedestrian only. In doing so, it would be redeveloped into a "promenade".

This portion of the street is 60' wide (including sidewalks) and 285' long. That's 17,100 sqft or just shy of 2/5 acre. The cost? $10-13mm! I can't believe that taking out the asphalt, replacing it with concrete, and then adding lighting and plants should cost that much. It's outrageous.

It doesn't cost that much. That's how much they're paying.

In my hometown, the city spent $3M to make a single right-turn lane approximately 20-feet longer.

This is a city that went from a population of 60k down to 15k. And the population is still contracting rapidly. There is no traffic, and there never will be. And worse, there is no income! And there's zero growth potential.

Unsurprisingly, at least last year, it was the city with the highest municipal debt per capita. Combine that with the fact the HH income is very low, and the population is shrinking, and it's a disaster.

I find it ironic this is a deeply republican city that constantly talks about the need to cut spending.

That just sounds like good old corruption to me.

Expect a wave of municipal bankruptcies over the next several years. We kicked the can down the road during the last financial crisis, but holding interest rates artificially low can only postpone the day of reckoning for so long.

What city is this?

Reading articles and seeing situations like this really makes me question whether public agencies, as a rule, should be allowed to use debt to finance projects.

I'll begin by saying I have no aversion to debt whatsoever as a private individual or for an incorporated business. I own several rental properties, I'm probably more indebted than most.

The thing about debt in general though, is that it makes the bad decisions a lot worse. And I think when you design a political system, you have to think about both the best outcomes possible, as well as the worst. Bad things happen. People make mistakes. Calculation errors occur. I'd gladly take a bargain where I could trade 5% of the upside for 50% of the downside.

What I've realized is that most municipal governments are run by people of fairly average intelligence and drive. There just isn't a lot of incentive to kick the apple cart. They want to go home at 5, they're going to see the owner of the construction company whose project they dump on in the grocery store, etc. This is actually a feature, I don't really want too much innovation in how my government does things, I'd rather go with the tried and true for things like road design and water pipes, than something like the BART where they used a novel track gauge, and we're still paying for it 30 years later.

I just think avoiding municipal debt can curtail some of the worst outcomes. It forces cities to save up for maintenance and really make hard choices about what gets maintained and what doesn't, and it also prevents can-kicking to later generations. You might not get a high-speed rail project, or a major bridge, without debt, but I wonder whether we'll ever get high-speed rail in California at all, after spending billions of dollars already [1] on it without anyone having taken a single trip.

[1] https://www.govtech.com/fs/transportation/California-High-Sp...

I've heard this idea before and I think there's something to it, but it's interesting because for it to function well you generally need to first build up a big savings account which you can then use to fund expensive things, otherwise you're extremely limited in what you can do.

One variation I've heard would be for cities and states to not be allowed to issue debt, that only the federal government could do that. It would mean the local units of government (which actually run and fund most things) would have to operate on a balanced budget, and would provide a lot of robustness in the system relative to what we have now. If they needed a one-time bailout for some reason (natural disaster etc) the federal government could give funds to the local area, potentially issuing debt if necessary.

Of course that doesn't provide any protection against federal debt binging... so I'm not sure how you'd square that. You don't really want to prohibit the federal government from taking on debt - for example, the largest debt the US ever accumulated was to fight and win WW2. But maybe there are strings you can attach.

One such string that makes a lot of sense to me is the idea that you should never allow debt for operating expenses or maintenance. You would think that would be obvious and you wouldn't actually need a policy to enforce that outcome, but unfortunately it's common practice today to just issue bonds if you can't afford to maintain your municipal services.

I'm not American, so I might get American political culture wrong. Wouldn't this transfer a lot of power from the states to the federal government? Isn't that considered a bad thing?

Great question. It's not that cut and dried. You could probably ask ten Americans what either the balance of power between the federal government is, OR what it should be, and get ten different answers.

The reality is that, today, the federal government gets the lion's share of attention but the bulk of day-to-day stuff (roads, schools, police, utilities eg water) are run by state and local governments. BUT--and this is an important caveat--SOME (not a lot, but some) money for this is provided by the federal government through about 20 different mechanisms including federal block grants for education, federal highway funding, and other mechanisms.

It's actually quite complicated, but to a first approximation, most local things are operated locally, financed mostly locally, but the federal government does kick in (fund) a little on certain things, in a way that's fairly haphazard and subject to the whims of politics, than any sort of tradition-driven or constitutional way.

Incidentally, this is part of why the US's COVID response has been literally "all over the map". It's mostly in the hands of the states and you're seeing how 50 different political cultures deal with this crisis.

I think the psychology of spending actual cash, in a bank account, that could theoretically be spent on anything, is completely different from using debt to fund projects.

A lot of my views come from operating perhaps the lowest level of "government" possible: a large HOA. Our CC&Rs prohibit entering into any contract (including debt) lasting more than a year. It works for us because the entire place is run by volunteers, many of them nonspecialists, who could do a lot of damage getting us into, say, a 10-year contract with Comcast that was too expensive, not negotiated well, etc.

I think we expect our politicians to be superheroes. This might be borderline reasonable for large, well-funded federal agencies like the Federal Reserve, BLS, BEA, etc who can attract large numbers of truly great people, and pay them well. It's not reasonable to expect someone like Tim Geithner or Ben Bernake (a Princeton economics PhD) to run the finances of a small city or HOA. You're going to get part-time volunteers who know how to balance their checkbooks. Expecting these people to be perfectly rational decision-makers without formal accounting training, let alone knowing how to think carefully about how to analyze NPV, cashflows, and long-term liabilities, in the face of all kinds of local small-ball politics (e.g. trying to help their friend win a contract, or a personal vendetta against someone's project) is laughably far from realistic.

> But maybe there are strings you can attach.

You could tie the debt to revenue. I think this happens often, but not often enough. You'll see "bond measures" on the ballet. "Raise sales tax by X, to pay for the bond X for purpose Z." I think this works, though you don't want to run every spending measure by the public. Maybe some of them can be more automatically applied, or within the discretion of the local council. But the key is the tie between future revenues and future expenditure.

> you should never allow debt for operating expenses or maintenance

Except these are perhaps the most important expenses. Maybe this requires something like automatic state-receivership or some other loss of local autonomy. Or the shortfall is picked up the state under some set of rules (something like state-wide municipal operational insurance, where in times of surplus everyone is kicking-in)

The Federal government handing out money to peferred towns sounds horrific.

Especially on Juneteeth.

A less stringent and more immediately applicable rule would be to limit debt repayment to the expected lifetime of the project.

Plenty of ways to cheat, but is still a decent yardstick.

What I've realized is that most municipal governments are run by people of fairly average intelligence and drive.

In the UK local government is heavily restricted in what they can do. My parish council gets to mow the grass and paint the village hall. As far as I can see that's about the limit of their abilities.

The downside is some larger municipalities like Manchester or Birmingham have traditionally been ignored by London based politicians and civil servants.

Debt should be allowed but only when the legislature authorizes it with a 2/3s supermajority vote. Having a higher voting threshold for issuing debt than for other decisions will reduce the amount of debt that gets issued, while still providing a mechanism to issue debt in exceptional situations.

I like this. It's flexible enough that it could be used in times of true crisis, but it's also super-simple, a major under-appreciated aspect of policymaking.

One thing you definitely DON'T want is a California-style "we can spend with majority but raising taxes requires a 2/3 supermajority". That has produced some truly horrific outcomes in government and needs to be repealed. https://www.westerncity.com/article/californias-two-thirds-l...

The government needs to be in debt to a certain degree. Debt is a zero sum game: If someone is saving, then someone else needs to make debt. Private house holds are always saving, they can not make debt. That leaves private companies, the government and foreign countries. Often private companies are also reluctant to make debt if times are not good, so the government has to invest to keep the economy from grinding to a halt. Some countries like Germany manage to save in all sectors, but this only works because they export their debt to other countries like Greece, which is unsustainable and ultimately caused the euro crisis.

Something is seriously wrong if a single right turn lane took 3 million dollars. I'm in disbelief at that figure. Here is Cuyahoga county in Ohio building out perimeter roads for an amazon facility, with a laundry list of work including road widening, for just under $1.4M even with a local contractor used.

http://publicworks.cuyahogacounty.us/en-US/Future-Amazon-Sit...

> I can't believe that taking out the asphalt, replacing it with concrete, and then adding lighting and plants should cost that much.

Was it bid out? Did you put in a bid?

How much room for improvement did you net out at? I wonder if there's a point where it'd be significant enough to make inroads...

The recent rebuild of a section of the Bay Bridge took 11 years and went 2,500% over budget. Whereas the original entire bridge was built in 5 years, ahead of schedule and under budget.

And something I just came across: SF allegedly had 6 Salesforce subscriptions at $1M/YR, and not even using them[1].

Given stuff like that, I worry you're right, it may hardly matter how much better a construction company is.

1. https://twitter.com/michelletandler/status/12734043395669934...

Offer a 10% tax free finders fee to anyone who finds any wasteful spending like that. $600k once for a $6 million annual savings (and that's before you fire whomever is in charge of auditing the books already) is a steal. Accountants and auditors could work like bug bounty hunters.

This is a great idea, but waste is in the eye of the beholder. A $6M environmental impact study might be considered waste by me, considered politically nice by the politician who agreed to it, considered legally necessary by the government's lawyer, and considered vital by the contractor paid to perform the study. Who's right?

If similar environmental impact studies cost half as much or if the study was not read by those who ordered it that is a pretty clear case. Some things are ambiguous I admit but I'm willing to bet there is enough low hanging fruit to keep a good number of people employed looking for it.

Edit: This is a HN faux pas however, please don't downvote the person above, they added to the discussion. I suspect that may be a common objection and I'm glad to be able to clarify it.

If similar environmental impact studies cost half as much...

Who defines "similar"?

Is a study performed in Texas similar to one performed in California? Is a study performed on land that drains into the municipal water supply similar to one performed on land that doesn't? Are two studies performed near each other location 10 years apart "similar" if new laws have come into existence, or a local species has been declared endangered in the meantime?

No matter how obvious the matter might seem, people will still disagree. And the people spending money can always come up with justifications.

...or if the study was not read by those who ordered it that is a pretty clear case.

How do you prove that those who ordered it did not read the study? And what if they did not read the study, but instead read a summary of it prepared by someone qualified who did read the study?

> Who defines "similar"?

A court of law.

> Is a study performed in Texas similar to one performed in California? Is a study performed on land that drains into the municipal water supply similar to one performed on land that doesn't? Are two studies performed near each other location 10 years apart "similar" if new laws have come into existence, or a local species has been declared endangered in the meantime?

I don't have the answer to these questions but I wager that we can find experts who do. Presumably firms exist that do hundreds or thousands of studies annually, those firms could testify how they would bid such a project. What the cost structure typically looks like.

> How do you prove that those who ordered it did not read the study?

A government employee could send a email to the effect that the report was not considered that is later discovered. Alternatively, a whistle-blower may clandestinely gather evidence in order to collect the bounty for themselves.

> And what if they did not read the study, but instead read a summary of it prepared by someone qualified who did read the study?

That seems like a reasonable use of funds.

This isn't going to catch every case, the purpose is to provide a natural check to government corruption and waste. Discoveries made by this system may lead to the judicial branch investigating those who made these choices. The FBI could use these tips to target sting operations. The voting public may use this information to decide whom they are going to elect, and the best part is it's free.

A court of law.

If you think these projects are overpriced now, you can’t imagine how expensive they’ll be when every private citizen has been armed with legislation that lets them take the city to court in an attempt to win these cases. Every project will need a team of lawyers and auditors to check that absolutely everything in the project is beyond reproach. It’s just insane how much things would blow up.

Exactly.

In fact https://www.brookings.edu/wp-content/uploads/2019/07/2019-07... argues that most of the increase in construction costs since the 1960s can be attributed to an increasing role for "citizen voices". I have to believe that increasing the power of citizens to impact the process will only make it worse.

You want to involve a court of law in order to bring costs down? You've just massively increased the project budget and timeline without solving anything.

https://en.m.wikipedia.org/wiki/Cobra_effect

That's an interesting point but it's arguably not the same because you should be able to enforce a strict separation between parties such that it isn't possible for the people who collect bounties to create the waste/corruption that they are being paid the bounty to identify.

In theory, of course. But when there's money involved, it has a funny way of flowing towards "value creation". In theory, you should be able to keep politicians from benefiting from a quid pro quo with lobbyists. In practice, politicians seem to frequently attain cushy jobs in private industry after their terms end (and sometimes before another begins).

Humans are unfailingly creative. I don't know how they'd game the system you set up, but I assure you they will!

Whereas the original entire bridge was built in 5 years, ahead of schedule and under budget.

The original Bay Bridge also had 28 fatalities during its construction. Imagine that happening today!

I'm not sure that harnesses and hard hats would have delayed that timeline by very much.

An expectation that acceptable deaths/injuries = 0 definitely affects the timeline.

We haven't won that battle yet. A worker passed away recently at the sofi stadium construction site, due to a miscommunication on maintaining a panel. I don't think preventing this unfortunate death, which would have just required one person mentioning to another that they are working in a particular area, would have added high costs to the build. I'm curious to know the actual costs of worker safety. It's always painted as the boogyman of the high budget project, but how expensive can PPE, building hasty wooden railings, and importantly communicating danger to employees which was the failure in this case really be? I must be missing some key costs here, and would love to be more informed.

https://www.latimes.com/sports/story/2020-06-12/attorney-for...

It isn't just worker safety that has improved in the last century, it's the safety of people in the building throughout its life. Building codes have expanded in scope and complexity over the years. Part of their scope includes installation method restricts and worker training and qualifications.

The other aspect of it is general workplace safety regulations which have expanded over the years as well. When budgeting a project, you need to consider both, however. And workers also benefit from both. For example, the restriction on the use of asbestos in building insulation was brought in to reduce the health hazards of living or working in such a building but the construction workers handling the asbestos are clearly the most at-risk group which benefits from the regulation.

Safety is waaaay more about worksite practices and culture than how much you spent on safety equipment.

Source: I worked on a deployed aircraft carrier, one of the most dangerous workplaces in the world.

Any solution to safety problems that relies on people just never making a mistake ever isn't realistically a solution at all. What you need is some process to ensure that when work like this is carried out, the area is appropriately marked as unsafe, and processes add cost. In this case, safety would probably have dictated not carrying out the work on top of the roof whilst the work underneath was in progress due to the risk of them misjudging where the weak area started and falling through, potentially blowing up the schedule or even meaning workers were paid to stand around doing nothing, which adds more cost.

It takes more than hard hats and harnesses to ensure safety. Of the 11 fatalities that occurred in the Golden Gate Bridge construction (which took place at the same time as the Bay Bridge), 10 of them occurred simultaneously when a platform collapsed.

In large-scale construction, safety needs to be built into every aspect of planning and execution of the project. That can add large costs.

I do electronics repair on an offshore oil rig, so not quite the same as construction. When I'm working, using a harness usually doubles to quadruples the time it takes. There is extra paperwork, you need to verify that what you are tying-off to can support the dynamic shock load of a person falling, they tell us 5000 lbfs. We have to put together a plan for if we do fall how the person going to rescue us is going to retrieve us. Also, we can't work alone because if you fall someone needs to be able to notify the rescue team. A 30 second job for one person on the ground may take 2 people an hour when the job is at heights. If you aren't working from scaffolding, you may be working from an unstable work position. There is also intolerance for dropping anything, even if the area under the work area is barricaded off, so each move and fastener removed requires much more concentration. We use special no-drop-tools that are all on lanyards that no matter what sort of organizational strategy frequently end up in a knot.

> There is also intolerance for dropping anything, even if the area under the work area is barricaded off

What’s the reason for this?

I'd bet a dropped tool on an offshore rig could end up causing an expensive breakdown or even explosion. Similar to why aircraft grade stuff needs tool checking and checkouts and all bolts use safety wire, where for a car there is less need as the failure modes are less catastrophic.

It really comes down to everything is a trade-off of some sort. The companies hiring us look at our safety records as part of the vetting process, no one wants their name in the news for bad reasons or dealing with the liability that comes with a worker being injured. Also, nothing slows down a job like an accident investigation.

Some of it is depending on how high up you are something can bounce pretty far, possibly outside the barricaded area. The term used is ALARP- As Low As Reasonably Practicable. The trade off is, when someone's working really high up you can make everyone else stay inside but this wouldn't really be productive so you barricade off directly under where the work is going to take place and where you could anticipate something bouncing too, then do everything to still prevent dropping something. I mentioned with the tools, everything needs to be secured, so for example if I'm removing a CCTV camera, I need to attach some form of attachment to the camera before un-bolting it. Of course it's still not possible to secure the nuts or bolts holding the equipment in place so move slowly, pay close attention to every move made. If something does get dropped, there is more paperwork to do and everyone in the company is notified. They calculate what the potential harm to someone is [1].

[1] https://www.preventdrops.com/safety-regulations/understandin...

Even if safety has that magnitude of penalty, it doesn't explain years of delays and 2500% over budget. It would've been factored into the original timeline and budget.

And surely after 80 years of improvements in technology, materials, process, etc we have the ability to build in less time AND have no deaths?

And surely after 80 years of improvements in technology, materials, process, etc we have the ability to build in less time AND have no deaths?

I don’t think this follows. MRI machines save lives. MRI machines did not exist a century ago. MRI machines have made healthcare more expensive, not less.

I think the same could apply to buildings with new materials and construction methods.

Not all healthcare requires MRI machines, no? Presumably most (not all, I will agree) of the marginal expense is shouldered by situations which make use of the MRI, versus those that could carry on without it (plus another small concession for those situations that use the MRI that would’ve resulted in similar outcomes pre-MRI invention).

I agree with your point generally though. It reminds me of the “websites got slower faster than computers got faster, thanks to computers” argument.

Part of the costs is our low tolerance for detouring car traffic. Recently, LA metro made waves by shaving 7 months off of their purple line extension schedule, since the lightened pandemic traffic allowed them to dig an open cut along wilshire and install decking over the future station. Beverly Hills fought that closure from happening since the build began, but the pandemic forced their hand and removed any ground for their argument to stand on.

We could save so much money if we didn't focus so much effort on minimizing construction impact to existing traffic. We would rather take a longer, slower, more painful bleed of the public purse, than cheaply ripping the bandaid off and dealing with a 15 minute longer commute for a few months.

Yep, close to 50% of the cost for burying power lines is having to manage and redirect traffic (in Canada)

It's not just a car detour issue. When a city shuts down a street for months to do construction that is likely to destroy any adjacent restaurants and retail businesses. When customers can't easily drive to business and park nearby then they stop coming. Naturally business owners strongly object to this and advocate for slower, less disruptive construction techniques.

This is a valid complaint, but the problem is that slower and less disruptive techniques are still disruptive and still often kill businesses. In many cases it would be much faster and more cost effective to give transfer payments to the businesses for their expected revenues during the closure and then just have them close temporarily to get the project done a lot easier and faster.

No one going to any store in LA is able to park in front of it. Even if there were a street parking spot at that artery, it will probably be occupied by someone not going to that restaurant or store. Plus the sidewalks don't close when the city does this sort of work, and there are ample parking garages in every neighborhood with a commercial corridor that remain open. I saw a figure that said LA had 3x as many parking spaces as cars.

Well that is just offloading costs onto the public as tax is it not? At a $15/hr min wage, adding 15 minutes to a round trip commute for 20'000 people/day M-F costs after 7 months $10.5 million dollars too.

I am not fond of this cost-based argument - you hear this one (longer commute times priced at hourly wage) and similar ones.

But no company pays me for my commute time. If I take an extra hour commute I don't get that 15 bucks. And that commute time does not go onto GDP either. It's hard to argue the economy lost the time I was doing nothing productive.

And if we really want to take it to the extreme, if it costs the country 15 bucks each hour people are not paid to work, but could have been doing something useful, Avengers Endgame must have cost the country more than it made in ticket sales. Thanos' final revenge:-)

> But no company pays me for my commute time. If I take an extra hour commute I don't get that 15 bucks. And that commute time does not go onto GDP either. It's hard to argue the economy lost the time I was doing nothing productive.

I suppose that's true if you believe that things without a price are worth nothing.

Truly, it's a mystery why people spend time with their families and friends instead of working another job. Such a waste of time.

> If I take an extra hour commute I don't get that 15 bucks. And that commute time does not go onto GDP either. It's hard to argue the economy lost the time I was doing nothing productive.

Presumably on average you work an hour's less overtime/day while the diversion is in place, or maybe you quit your job and take a less productive one that's in decent commuting range, or so on.

> And if we really want to take it to the extreme, if it costs the country 15 bucks each hour people are not paid to work, but could have been doing something useful, Avengers Endgame must have cost the country more than it made in ticket sales. Thanos' final revenge:-)

I mean it's certainly worth thinking about how much time you're putting into things like movies and whether that's worth it to you. If something that takes 1 hour and costs $45 is more fun than something that takes 3 hours and costs $15, you might well be better off doing the former.

>And if we really want to take it to the extreme, if it costs the country 15 bucks each hour people are not paid to work, but could have been doing something useful, Avengers Endgame must have cost the country more than it made in ticket sales. Thanos' final revenge:-)

Is there a word for when you actually agree with a reductio ad absurdem? Because man, what a waste of time movies like that are.

>But no company pays me for my commute time. If I take an extra hour commute I don't get that 15 bucks.

Pretty much anyone paid to show up in a windowless van and do some task is paid (or their boss is paid) by billable hour. Anything that decreased the ratio of billable hours to hours worked is going to mean they need to charge you more. Obviously it might amortize out to only be pennies on the dollar but when you start adding a pennies on the dollar sized inefficiency to the economy of an entire region it's gonna hurt.

Imagine if you made the day 5min shorter for 50% of the population. That's what crappy transportation infrastructure does (be it car, rail or otherwise).

That's not a good comparison. You can actually spend the money saved by finishing construction faster. Nobody gets a check for all the supposed "saved time" when you do that math. You can't pool that money together and build a nice neighborhood park -- because there is no money.

What happens in real life is that people largely don't just stick to their same behavior and suffer like lemmings. They time shift a little bit. They find a different route. It's not magic, it's just a complex system adapting to a change in conditions.

"Dollar value of time saved" calculations are a common distraction peddled by lazy engineers who can't actually make the numbers for their project make sense and instead need to dupe the public into supporting a project they want to do.

Spending $10.5 million to save $6 billion sounds like a steal.

>The recent rebuild of a section of the Bay Bridge took 11 years and went 2,500% over budget. Whereas the original entire bridge was built in 5 years, ahead of schedule and under budget.

To use an analogy from heart surgery:

Fixing a car is easy.

Fixing a running car is hard.

There comes a point at which starting from scratch is better than trying to fix the original mess. Which in our business means the company goes out of business and is replaced by something new.

If an earthquake knocked it down somehow people managed to move on until it was rebuilt. The same for the I-85 collapse in Atlanta. Amazingly, traffic was slightly worse but it’s always disastrous so it wasn’t that much worse. Freeway projects should probably shut down the road more often and just get done.

It's also a design problem. There are perfectly adequate designs that cost a lot less and function just as well, but if something isn't part of the official standard it generally can't be used. The official standards are set with a lot of industry involvement, and unsurprisingly they're not focused on being cheap.

This is partly why the only legally mandated building codes ought to be ones without which people and property outside the private lot in question are put at negligent levels of risk. Any risk inside the lot is yours alone.

In a society where renting is increasingly common, that seems like a quick way to kill off a bunch of young, poor people.

Even if there were no legally mandated building codes banks and insurance companies would probably require most of what we have on the books now in order to get anything done.

Why don't cities/counties in-source repetitive maintenance and construction tasks? I'd expect that a county has sufficient need to build roads that a small construction crew + equipment could be kept on staff for road work.

Because there are now structural incentives put in place by lobbyists to prevent public engineering. Everything has to be contracted and red taped so the bribers of politicians can inject themselves into the taxpayer money pipeline.

Its in the same hilarious inefficiency ballpark as medical. Both are built on the foundations of what should be a public service being parasitized from all sides by regulatory capture.

>I'd expect that a county has sufficient need to build roads that a small construction crew + equipment could be kept on staff for road work.

Not so sure about that.

Filling pot holes? Sure, and they already do that in-house. But building roads must be far less common.

Let's say a county is a 15 mile by 15 mile square with a square grid of streets spaced on average 1000 feet apart. That would be 2370 miles of road in the county. Assuming a lifetime for that road of 35 years, they need to replace 68 miles of road per year which works out to about 1000 feet per day.

At $1.5/.32 miles, they would be spending $881K per day on road replacement. If a county run crew could cut 10% of this cost out, and 50% of that was used for labor, they could employ 198 people at 80k per year on average. A paver capable of paving 1000 feet of 24 foot wide road per day costs approximately 60k. Assuming 10% of cost savings went towards capital equipment, they could purchase 52 such pavers per year. For a more reasonable but still quite liberal budget of $1 million per year of capital equipment financing and maintenance payments and salaries of $200k for 40 employees, that 10% cost savings would allow the county to pocket $22 Million per year.

Even if the streets were spaced on average 1 mile apart, that would still be 100 feet per day, and the 10% cost reduction would be $3 million per year.

This does not include new construction or regular maintenance of roads, nonetheless other construction projects.

Only very small or sparsely populated counties should have any trouble justifying the expense of an in-house construction crew.

That doesn't always work out cheaper. The sanitation department here needed to replace 80 meters worth of pipes and first went to the in-house construction crew and was quoted a cost of 250,000 SEK (~$25K USD), then shopped it around town and a contractor could do it for 80,000 SEK (~$8K USD).

It usually takes longer too. They replaced a pipe in the street in front of my parents house and it took them one month to complete the job, whereas contractors typically take less than a week start to finish for that length of road.

Those prices are almost an order of magnitude less than what we'd see in the US ( often due to upgrades etc. that accompany such projects ).

Right now there isn't much incentive for multiple contractors to setup and be efficient in a given town - heavy equipment is expensive to move, so the TAM of any given construction crew is likely limited to a 1 county radius. Based on the math in this thread it's unlikely that many towns need more than 1-2 crews, and the incentive is minimal for that crew to negotiate a fair price.

In the example where there is a public crew for most work the contractor always needs to underbid the public crew, and the city/town has influence on the costs of the public crew as there are no middle men and capex can be amortized over long periods. Most public projects in the US lack this "price ceiling".

As a frame of reference we were quoted $160,000 USD to resurface two miles worth of residential streets, including ground work like changing drainage pipes and upgrading drains etc.

This is in Sweden so YMMV, but we were quoted $80K per mile and these people got told $1.5 million for just over a quarter mile?

An obvious and common problem is just corruption. In many instances, the construction company will have personal ties with lawmakers, but let's pretend that corruption is a non-issue.

Another large issue is government bureaucracy. The process for proposing projects, winning bids, and being able to start work is a very long process which incurs increased staffing costs due to the time it takes to navigate red tape. This is one reason that government projects cost so much.

I have a family member that works for a heavy civil construction company and it sounds like it's a combination of politics and... wait for it, corruption

It's probably a combinations of many factors. Here are some theories, and they could play together:

- the population has grown a lot. The demand is way higher, but the offer is propotionally smaller.

- competition is disapearing. Big companies are buying or killing the small builders more and more. They set the prices. They have overhead. They can lobby or corrupt.

- we have more requirements than before. Safety. Going green. Labor laws. This is not free. We are only paying them now because the infra from decades ago was still holding.

- complexity has increased. There are more electricity cables, more water and evacuation pipes, internet cables, gaz pipes, etc.

- price of material has increased. The demand is global now. 3 billions of Asians need roads too.

- administrative burden is higher. This has unexpected costs. Not to mentions insurances and the risk of being sued.

- people are not ready to work as much, and for as little money as before. In my grandma's time, there were plenty of people living very simply, in homes with the bare minimum, working 60 hours a week for a ridiculously small pay. They don't show you that in the movies about "the good old times".

- we have less skilled people than before in those industries compared to the technical level it needs now. Because of our failing education system, the disapearence of parallel ways of learning (you could become good at a trade without going to college 80 years ago) and the lack of respect we show to manual workers, the ones remaining to do the job are often not that good. But the requirements are higher than before.

- we are used to automation. We have machines doing everything for us. Mechanized processes are expensive if not on a mass scale. There are many things that could be made cheaper, but it would require more skill (and painful work conditions) to do them without those tools. Also, while we are getting better at doing hight tech stuff, we are losing knowledge for the mondain tasks.

- it compounds. Industries don't exist in a vaccum. They depend of each other. If machine maintenance, food making and traning people also suffer from the all those same problems, it will affect the building industries situation and hence, prices.

> There is another degree of freedom here: project cost. Why on earth does 0.32 miles of residential road cost $1.5M? Having just managed a construction project much larger than this stretch of road myself, I am certain that a lot of the blame here lies with the contracting process as well as outrageous fees (and just sheer inefficiency) from the engineers and contractors. There is no valid reason this should be so expensive. In the rest of the world, I guarantee you they are not paying over a million dollars for something like this and their standards are just as high if not higher.

Numbers can vary quite a bit but 1m of road costs about 10000 euro [1] in Germany. So this seems cheap in comparison. Mind you the quality is also quite a bit better. I never understand the complaints about investment in infrastructure and having to pay for it in taxes. I'm generally glad to pay taxes and get a functioning society. But then again the country I live in also does not spend as much on military as the next 6 or 7 next countries combined. Funnily enough the same people who complain about taxes for the road in front of their house hardly ever complain about that.

[1] https://www.google.com/url?q=https://rp-online.de/nrw/landes...

> I never understand the complaints about investment in infrastructure and having to pay for it in taxes.

In the US, this is largely due to the perception (right or wrong) of budget bloat and cronyism on taxpayer-funded projects. Those projects have a reputation for cost overruns and generally being more expensive than comparable private projects.

> I never understand the complaints about investment in infrastructure and having to pay for it in taxes. I'm generally glad to pay taxes and get a functioning society.

In the case of the article, the road is not affordable. The writer isn't advocating for not paying taxes. The writer is advocating for not taking on projects you can never net on. That doesn't sound unreasonable.

> ... 1m of road costs about 10000 euro ...

Too little information. If 1m is length, what is the width? where is the road located?

If it's a two-way superwide highway in the middle of a big city, sandwiched between a similarly sized winding overpass, and an underpass, and the cost includes the overhead on the city's economy for shutting down that part of the highway for the given duration, we might be having a conversation.

It fits right in the middle for Autobahn, so in this case I assume 2 lanes each way (with a third at the right for emergency stops), controlled access, no major earthworks, and either steel or steel-reinforced concrete center and side barriers. Also including some trees or brush either side to shield noise and, presumably, also side winds.

Depending on curves, it would be rated between 120 km/h and ~200 km/h (though anything above 130 km/h seem to be declared as "no limit", deferring to the motorist's judgement).

The best part is when a city tries to renegotiate the cost of a project, and ends up spending 90% for 1/2 of the original design. Then the overruns hit, and somehow they still pay out more. Then it will turn out that there is some sort of critical design flaw, that they need fix, add solar panels to "save money", and so it goes on. The whole thing is a racket in many places.

> I am certain that a lot of the blame here lies with the contracting process as well as outrageous fees (and just sheer inefficiency) from the engineers and contractors.

I think a significant cause of this kind of thing is the use of cost-plus EPCM contractors. Sure it's easy to throw a requirements spec and some money at them and have them take care of everything, but ultimately they earn their crust by spending your money. Suddenly, mysteriously, more meetings are essential, more paperwork is required, and more overhead created in every dimension.

> In the rest of the world, I guarantee you they are not paying over a million dollars for something like this

Not quite the same construction - this is widening a motorway - but an order of magnitude more expensive - £30M per mile in 2006 money.

https://www.theguardian.com/society/2006/dec/13/guardiansoci...

Fascinating. Why don't you think it's possible to build such a construction company? (I have no experience in construction.)

I read their comment more as saying that building a better construction company wouldn't fix the issue (e.g. they might not get hired), not that it wasn't possible to build a better company.

I think you hit the nail on the head.

Elected officials unfortunately don't have that much incentive to hire the "cheapest" company as the debt will be incurred over the next 100 years while they will be long gone.

They probably hire the company that they feel will give them the least amount of trouble, which is the easiest to navigate or that will do something for them in exchange. It's the "not my money" issue at play.

I think it's quite the opposite. There is heavy incentive to pick the lowest bidder without any consideration paid to how absurd the bid is, which is where you get these crazy cost overruns. The bid was never doable to begin with.

And once there is a cost overrun it's easy to bloat the budget because the government is stuck with the contractor they hired.

Presumably the problem is that honest construction companies don't win bids.

They win when the project is needed. Most of these projects aren't needed. Another HNer pointed out to me that when the East Bay interchange had a collapse due to a tank truck fire, the replacement came in under budget and ahead of time - bidding lower than everyone else and making it back on speed-of-delivery incentives.

The reality of most construction projects? You don't need them. You're not going to get better with them and you're not going to get worse without them.

I don't think you understand how corruption works, so let me share a worked example with you.

A stretch of road is past its shelf life and scheduled to be repaved. The city does some analysis, and estimates the cost for that mile of road to be 1M^1. Then they put out a Request for Bids for contractors to do the work, lowest bidder wins. Corrupting the auction is how things fail.

The simplest corruption is to leak sealed bids so that you know how much to bid. Remember, this isn't a vickery auction, bidders are paid what they bid and no more. If you want to maximize your profits, all else being equal you want to bid one dollar less than the 2nd best bid. If you were going to bid 800k, someone who informs you the second highest bid is 900k is worth 100k. Sending them a bribe for that tip will still leave you ahead, and the city behind. And if you repeat this, eventually that 2nd bidder is discouraged enough to leave the market, or at least stop participating in Corrupt City IFBs. Which raises the cost per mile even higher.

The other method is to disqualify competitors and proposals. Contracts often give a measure of leeway to officials disqualify bids. Or, to advise a bidder to change their proposal before they get disqualified. Or you can just write the work to be done in such a way that only one bidder could feasibly win.

^1 I really don't know the costs here, just examples.

For the necessary projects, no one fucks them, because the costs of failure are too high. They are very rare, though, but when comes around it moves like a grass fire on a windy day[0]. That road "past its shelf life"? It's not. Your standards are just too high for your wallet.

0: https://en.wikipedia.org/wiki/MacArthur_Maze#2007_I-580_East...

Without a sane monetary system which has a limited supply of money, the ponzi scheme will never pop. It will keep on quietly diluting the wealth of workers to pay for projects which benefit the owners of existing capital.

The financial system is founded on financial insanity. The idea that one should keep taking out new credit cards to pay off your the ones - Except that this is happening on a global scale.

I read somewhere that China builds things at 1000x the efficiency of the US.

If that's speed or cost or if it's really only 100x doesn't matter.

This is a fundamental superiority Chinese society has, and I don't see the US switching to a pro construction stance anytime soon!

China has vertically integrated the entire construction process, making the machines that, extracting the materials, transporting them, and building the infrastructure all using slave wage labor. Americans would never accept that quality of life.

Is their "slave wage labor" really any worse than being a construction worker in the US, in relative terms?

Yes, significantly so.

~18 workers died and hundreds were injured building the HK bridge to Macau and the Mainland which opened in 2018.

Um.. yes? Construction work may be back-breaking and hard but it often pays well, or at least can serve as a path towards a trade or higher earning.

It's not about the wages.

It's about a bias towards building things and taking action.

Construction in the US bordering on a "Vetocracy". Everyone and their NIMBY uncle can oppose anything being done. So what little gets done happens after many years and at great cost.

I've seen Youtube videos of collapsing buildings in China that were built not terribly long ago (someone on HN posted a link in a related discussion a while ago, but man, I would have to dig). So I would need some additional data to conclude that China is doing it better than anyone else.

In response to claims of progress and efficiency, constantly claiming it is done via smoke and mirrors, with what appear to be extreme examples, seems like a good way to be left behind, because it implies there's nothing to learn from others, which is always false.

Uncritically accepting propaganda of an authoritarian regime about the superiority of it's system seems to be a good way to get oneself crushed under the boot heel of authoritarians, either of the same regime or another taking advantage of the attraction driven to that system.

That isn't what I said and completely goes off the rails with and twists what is under discussion.

No one said to uncritically accept anything. In fact, the hidden assumption is usually to uncritically accept that anything the U.S. does is the best.

I simply implied that to attempt to stay ahead, one needs to not blatantly dismiss and discredit what others do, but this is unfortunately very common place in the U.S., whether it regards China or any other country.

I have visited China. Whether there's propaganda or not, it doesn't explain away the amount of nice roads, trains, subways, etc. and the efficiencies of these systems. Coming back to the U.S. felt like stepping back decades when it comes to transportation aside from a few things. China does not magically transport people via smoke and mirrors. They are actually doing it.

In my city, it's taken decades to build mere single digit miles worth of above ground train track, and it's still not done. Propaganda on either side does not magically explain away the disparity.

I've been to China repeatedly over the last 15 years and you can see the pace of change with your own eyes. Large cities built so fast that you can literally walk through neighbourhoods and not recognise where you are after two to three years, that's not propaganda.

The real danger today doesn't lie in authoritarianism but in a lack of state capacity. Decades of fearmongering have led the US and significants chunks of Europe to a point where governments can't provide cotton swabs during a pandemic and can't build housing in their cities.

> The real danger today doesn't lie in authoritarianism but in a lack of state capacity.

Yes, it does lie in authoritarianism, and that (“lack of state capacity”) is literally always the defense of authoritarianism, especially from those who like to pretend to be merely reluctant supporters rather than ideological devotees.

> . Decades of fearmongering have led the US and significants chunks of Europe to a point where governments can't provide cotton swabs during a pandemic

I'm not going to talk about Europe, but there is absolutely not a “state capacity” problem produced by “decades of fearmongering” I the US of that kind. Both the material capacity and the administrative capacity for the federal executive to direct that material capacity with no effective veto points exists. The present federal executive deliberately choose to apply that power in the worst possible way, withholding it from practical and useful supplies, preventing subordinate authorities from acquiring supplies they had located despite the lack of federal cooperation, and applying federal production mandates to prevent major disease spreading centers (meat packing plants with major outbreaks) from being closed to constrain the spread of the disease.

>Yes, it does lie in authoritarianism, and that is literally always the defense of authoritarianism.

One can turn this around trivially. Vague allusions to tyranny are always made to justify present-day dysfunction, without any clear expanation of how concrete steps actually lead to said tyranny. It usually just resembles a sort of vague, primal fear of authority.

And on the second point, the US doesn't just have implementation problems. It also altogether lacks power. One reason why construction is so expensive is simply the extreme difficulty to overrule local interests when it comes to acquiring land, and related the threat of litigation.

That's a structural issue, not just a sort of temporary failure. The reason Europe can build rail at one fourth the cost per mile is (among other reasons), that local homeowners don't rule supreme. Just look at California to see what a mess it is.

> I read somewhere that China builds things at 1000x the efficiency of the US.

uhh, source for this? Efficiency measured how? dollars per building? man-hours per building?

Don't remember the source, so feel free to ignore it.

I think it was someone reasonably credible on Twitter, not too long ago.

Speed, cost and quality form the iron triangle, and this is what China gets by sacrificing the third:

https://aeon.co/essays/what-chinese-corner-cutting-reveals-a...

The source of this kind of "superiority" is a nearly unlimited workforce with low wages and low living standards. Maybe there is additional planing efficiency established through other large scale projects, but I believe it to be a smaller factor.

From an economic perspective it might look more efficient, yes.

No, it's that they don't have "NIMBY vetoism".

The decision to build something is a straightforward yes/no one that does not get dragged through various permitting instances for years and decades only to probably be denied eventually.

China isn't even a poor country anymore. It's middle income, and is losing jobs to poorer countries these days.

> If that's speed or cost or if it's really only 100x doesn't matter.

If it's just complete BS, does that matter?

Brady of Practical Engineering on YT talks about this in one of his videos here: https://www.youtube.com/watch?v=PIK6I6Q58Ec

>There is another degree of freedom here: project cost. Why on earth does 0.32 miles of residential road cost $1.5M?

Well, the mayor's family member/Buddy who owns the roadworks business who needs their cut, then his family member/Buddy who owns the flagging company needs their cut and Buddy who owns the asphalt production company and so on. Then, work needs to be done as cheaply as possible, with as many corners cut as possible to ensure maximum profit possible for everyone getting their cut. Then the developers will swim around on their mountain of cocaine and money until it runs out and so the cycle goes.

This is how every developer i've ever subcontracted for has operated.

Not sure why this reply is being downvoted. Could have been phrased differently but it seems like street construction projects are low risk opportunities for corruption on a recurrent basis.

Regulation. Environmental impact surveys, union fees, product compliance, safety regulations and temporary signage all cost money. They increase man hours and require increased materials. You could get rid of all of this but you wouldn’t like the result.

Union or non-union contractors?

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