the ugly truth about public project costs

A great column in the San Jose Mercury News points out out how with any given public works project–a new city hall, new bridge, whaterver– news that the costs are higher than expected is inevitable. Some highlights. . . When San Jose officials revealed recently that the new downtown City Hall might require an additional $45 million for technology and equipment, the news prompted a variety of shocked, shocked talk among the city’s politicians. But any look at the history of public works in this valley should tell you that surprise is the wrong emotion at news of fresh costs. Wariness, yes. Frustration, yes. But not surprise. Virtually no major project of the past two decades has come anywhere close to original estimates. Like untended weeds in rainy season, many have grown well beyond the first released numbers. [I noticed this myself at the very beginning of my career, still in grad school, looking at public transit light rail projects, not one of which in the 80’s and 90’s came in close to original cost projections. adrianm] Here’s how a new project should be announced: “Mayor So-and-so announced Tuesday that the city will build a new $300 million country-western music hall. Herhold’s Law suggests that the real cost will be $500 million.” At least. . .

Adrian Moore

Adrian Moore, Ph.D., is vice president of policy at Reason Foundation, a non-profit think tank advancing free minds and free markets.