In Palladium, Brian Balkus wonders why American can’t build anything any more:
Construction of the Fresno River Viaduct in January 2016. The bridge is the first permanent structure being constructed as part of California High-Speed Rail. The BNSF Railway bridge is visible in the background.
Photo by the California High-Speed Rail Authority via Wikimedia Commons.
Sepulveda’s cost and schedule overrun aren’t even the worst of it. Just as unattainable as a shortened commute is the Californian dream of building a bullet train that could take you from Los Angeles to San Francisco in under three hours. In 2008, a year before the Sepulveda project began, the state tried to turn this dream into a reality after voters approved a 512-mile high-speed rail (HSR) project. Amid failing overseas wars and financial crises, at the time it could’ve become a symbol of renewal not just for California but the entire country. Instead, it came to exemplify a dysfunctional government that lacks the capacity to build.
At the time California began accelerating the development of its HSR system it only had 10 employees dedicated to overseeing what was the most expensive infrastructure project in U.S. history. It ended up 14 years (and counting) behind schedule and $44 billion over budget. Incredibly, the state has not laid a single mile of track and it still lacks 10 percent of the land parcels it needs to do so. Half of the project still hasn’t achieved the environmental clearance needed to begin construction. The dream of a Japanese-style bullet train crisscrossing the state is now all but dead due to political opposition, litigation, and a lack of funding.
Despite its failure, the HSR project inaugurated the U.S.’s megaproject era. Once a rare type of project, by 2018 megaprojects comprised 33 percent of the value of all U.S. construction project starts. An alarming number of these have spiraled out of control for many of the same reasons that killed the California bullet train. The decade that followed the financial crisis was a kind of inflection point in the industry; this was when construction projects became noticeably worse and when the long-term implications could no longer be ignored. One of the most cited studies of the U.S.’s declining ability to build reviewed 180 transit megaprojects across the country, revealing that today, U.S. projects take longer to complete and cost nearly 50 percent more on average than those in Europe and Canada.
Having joined Kiewit in 2010, I witnessed these changes first-hand. I have since moved on, but have remained in the broader industry, including working on what are called “strategic pursuits” — the process by which companies compete for megaprojects. This experience has provided insight into the mechanics of how these projects are awarded and why they so frequently fail.
Even if the construction had proceded close to schedule, the economic justification for California’s high speed rail line was never strong … and it’s unlikely the service would have come close to breaking even. It almost certainly would have added significant ongoing costs to Californian taxpayers, and due to the nature of high speed rail services, been effectively a subsidy from working-class Californians to the laptop elites of Los Angeles and the San Francisco Bay area.
All of that, however, are merely additional reasons to believe the project was doomed from inception. Broadly speaking, all major infrastructure projects in the United States are struggling with paperwork and compliance requirements mostly driven by state and federal environmental regulations passed with the best possible intentions (as the saying goes):
Sepulveda’s numerous lawsuits and stakeholder conflicts are an example of a phenomenon that can be traced back to the passage of the National Environmental Policy Act (NEPA) in 1969. NEPA mandates developers to provide environmental impact statements before they can obtain the permits necessary for construction on huge swathes of infrastructure.
Shortly following the passage of NEPA, California’s then-governor Ronald Reagan signed the California Environmental Quality Act (CEQA) into law, which required additional environmental impact analysis. Unlike NEPA, it requires adopting all feasible measures to mitigate these impacts. Interest groups wield CEQA and NEPA like weapons. One study found that 85 percent of CEQA lawsuits were filed by groups with no history of environmental advocacy. The NIMBY attitude of these groups has crippled the ability of California to build anything. As California Governor Gavin Newsom succinctly put it, “NIMBYism is destroying the state”.
It is also destroying the U.S.’s ability to build nationally. The economist Eli Dourado reported in The New York Times that “per-mile spending on the Interstate System of Highways tripled between the 1960’s and 1980’s.” This directly correlates with the passage of NEPA. If anything, the problem has gotten worse over time. Projects receiving funding through the $837 billion stimulus plan passed by Congress in the aftermath of the financial crises were subject to over 192,000 NEPA reviews.
The NEPA/CEQA process incentivizes the public agencies to seek what is often termed a “bulletproof” environmental compliance document to head off future legal challenges. This takes time, with the average EIS taking 4.5 years to complete. Some have taken longer than a decade. A cottage industry of consultants is devoted to completing these documents, earning themselves millions in fees.
