Last month Clark Williams-Derry wrote about Bent Flyvbjerg’s work on analyzing cost overruns on megaprojects, those large and expensive projects like tunnels, bridges and light rail systems. Such projects are plagued, according to Flyvbjerg, by grossly underestimating the final cost of the projects.

The true cost of projects and whether those projects are actually going to do what they are supposed to do form most of the public debate on megaprojects.

This theme has been echoing in recent discussions on the pages of the Oregonian over the summer in threeopinion pieces written from different perspectives on the Columbia River Crossing project in Portland.

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  • They are all worth reading but the best one of them is by Joe Cortright, an economist and chair of the Oregon Governor’s Council of Economic Advisors. He writes:

    Highway advocates have a similar delusion—that traffic levels can only increase. But that’s not true. Driving has been going down in Portland, a trend that started even before the run-up in gas prices and the recession. Traffic counts have been going down on the Interstate bridges for the past three years. And according to Inrix, the nation’s leading providing of real-time traffic information, afternoon peak-hour congestion on I-5 northbound has declined more than 10 percent in the past year. If traffic levels flat-line, or grow much more slowly than in the past—as now seems certain to be the case, thanks to higher gas prices—we simply don’t need 12 lanes of capacity, plus light rail.

    And Cortright goes on to point out that decreasing traffic volumes also adversely affect the tolling scheme which would help pay for the bridge. Fewer cars mean less money for tolls.

    Like Seattle’s megaproject, the deep bore tunnel ($4 billion plus) to replace the broken Alaskan Way Viaduct—the River Crossing ($4 billion plus) project is considered a done deal. The Oregonian editorial board wrote that “in theory, everybody’s signed off on the 12-lane bridge connecting Portland to Vancouver.”

    Even the most hardened supporter of either project would have a difficult time responding to Cortright’s point that Vehicle Miles Traveled (VMT) are falling. Not just per capita miles either, but total miles driven. And it’s been declining for several years now; 2009’s first quarter VMT dropped was the same as the same period in 2004.In the northwest the trend has been the same. So why add expensive new road capacity when people are driving less?

    Add to that Flyvbjerg’s study of over 258 megaprojects all over the world that found that 90 percent of them went over budget and another study he did that found that the projects didn’t work the way they were supposed to. Together it paints a pretty grim picture for the tunnel in Seattle and the bridge to Portland. Furthermore, the economy is struggling meaning revenue that funds other critical state and local services are taking a huge hit. Digging into those funds now to buy questionable tunnels and bridges doesn’t make sense.

    But if projects like these go over budget, we don’t have the money to pay for them, and we may not even need them, then why do they keep cropping up? Partially it is what Flyvbjerg points illustrate in his fantastic chart that I am reposting :

    Flyvbjerg - deception and delusion

    Megaprojects often end up being solutions to political problems rather than transportation problems. The strange dynamic of delusion and deception that Flyvbjerg describes so well is really the symptom of well intentioned politicians trying to meet the needs of their various constituencies, which sometimes means spending lots of money addressing their particular issues. For labor it might be jobs, for transit advocates it might be a train and for business it might be the ability to move commuters and freight.

    What often emerges are huge, expensive projects that employ people for a short time and, on paper, may seem to solve many problems at once. But Flybjerg’s evidence shows that the more politics distort the engineering and financing of the projects the more untenable they become. Unfortunately, there is no simple solution to this problem, but it does point to the importance of looking for “least cost” solutions that carefully steward our resources whether financial or environmental. Having elected leadership willing to resist turning capitol projects into political panaceas would be a good start.