Why do infrastructure costs in the U.S. run so high? Two recent examples from Texas illustrate one of the reasons.

Last month, public-transit planners in Austin revealed new details about Project Connect, the region’s ambitious attempt to improve transit service. The project’s light-rail component, designed to link some of the city’s main commercial streets as well as the airport, won’t need overhead wires—unlike almost every other tram line in the world. According to Dave Kubicek, the project head, new vehicles will likely be battery-powered. The Austin Transit Partnership has not ruled out hydrogen fuel-cell vehicles, though, as Kubicek notes, the technology is “very cutting-edge, very heavily subsidized and there’s a lot of risk.”

He could have said more. Though Toyota makes one, hydrogen fuel-cell vehicles haven’t been broadly commercially deployed. Battery-powered trams exist in a few places where narrow streets or historic architecture preclude the installation of overhead infrastructure. (A recent tram line in Nice, France, has short wireless stretches in the historic center where trams operate under battery power, before recharging their batteries from overhead wires on the rest of their routes). But fully battery-powered trams are another matter. And though Austin has many charms, the architectural heritage of the strip malls lining its main commercial avenues is not one of them.

Choosing untested technologies carries many drawbacks: a higher purchase price, less competitive bidding for vehicles and maintenance contracts, and the prospect that technology without extensive commercial-service records may have significant problems. Kubicek’s explanation for why these risks are worth taking seems to boil down to preemptive appeasement of opponents of a new electrical substation that would be needed to power conventional light-rail cars. “If you have to put a substation somewhere,” he reportedly said, “there’s a civil impact. There’s an outreach, you know, there’s a utilities drop. There’s a land need.” Better, therefore, to place bets on an untested, unnecessary, and likely very expensive technology than go through the protracted process of public engagement required even for such a trivial investment as a new substation.

Not too far east of Austin, another new infrastructure project faces similar difficulties. Texas Central, a privately financed high-speed rail line, will link Dallas and Houston in about 90 minutes—well under half the time required for driving. But costs for the railroad have substantially escalated, with some current estimates reaching about $30 billion.

The reason: lawsuits from aggrieved farmers along the Texas Central route, often supported by county authorities, have forced Texas Central to spend billions of dollars on technically pointless overengineering. “The current design of the system,” Texas Central’s website notes, “calls for more than 50 percent of the 240-miles of tracks to be elevated on viaducts in order to preserve access for landowners,” with much of the rest on raised berms or earthworks—even though terrain as near-perfectly flat as East Texas would easily allow construction at ground level.

As viaducts cost roughly three times what at-grade construction costs and raised berms cost about twice at-grade construction, Texas Central’s unnecessary elevated construction may have added well over $10 billion to the construction price tag. At prevailing East Texas rural land prices of about $5 million per square mile, that’d be enough to buy a swath of undeveloped land several miles wide running the length of the entire route. (New railway construction in other countries—with the notable exceptions of Japan, where arable land is scarce, and China, which copied many engineering standards from Japan—is almost always done at ground level. In France, the national railway organizes land-swap deals to help farmers near a high-speed line rationalize their land plots.)

Texas Central and Austin’s light rail system are being dogged by a phenomenon pointed out by infrastructure writer Alon Levy: surplus extraction. New infrastructure projects, in Levy’s description, are large enough investments that there’s much less of a competitive market for them than there is for consumer goods. Therefore, new projects tend to generate considerable surplus in the form of public benefits or profit for private investors. But this surplus can be “extracted” by various groups with either local political power or privileged access to the legal system. These groups can push for benefits that don’t come close to outweighing the costs—whether it’s needlessly expensive unproved technology to protect a few homeowners from living near a new substation or billions of dollars in unnecessary viaducts to avoid causing a few thousand farmers inconvenience.

Photo by Peter Tsai Photography/Getty Images


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