Getting the Reporting Right on HSR Cost Estimates
Tim Sheehan of the Fresno Bee has a new article out at California Watch on the “ballooning” costs of high speed rail. It’s a classic example of how the media in the United States obscure more than they reveal in their reporting, and shows the unstated assumptions that often drive reporting on public spending.
Sheehan’s article sets the tone in its intro:
For two years, the California High-Speed Rail Authority said it could build 520 miles of high-speed train tracks between San Francisco and Los Angeles for about $43 billion.
But that figure – long derided as unrealistic by critics – went off the rails this month when the authority released detailed environmental reports for its proposed Merced-Fresno [PDF] and Fresno-Bakersfield [PDF] sections, the first two segments the agency wants to start building next year.
The assumptions in the first two paragraphs are clear:
• Government always lies
• Government claims are objects of derision
• Critics of government spending are always neutral, even heroic people who never bring any biases to the table
• Cost overruns are always treated as a sign of a project that is in trouble, rather than a sign of a project that is becoming more accurate and effective in its estimates.
The other move that the media makes is to ignore the low estimate and assume the high estimate is the most likely to be realized:
The authority’s most optimistic estimates for the San Joaquin Valley sections alone total about $10 billion; route choices could run the price to $13.9 billion.
That’s a far cry from the 2009 estimate of $8.1 billion.
If projected costs can rise by as much as 71 percent in the Valley – a relatively flat, straightforward stretch – what will happen when tracks must be built through mountains and across cities in the Bay Area or Southern California?
If costs escalate statewide as much as in the Valley, the price to build the system from San Francisco to Anaheim could leap from the 2009 estimate of $43 billion to as much as $67.3 billion, even before buying any trains.
Actually, $10 billion isn’t a far cry from the 2009 estimate. And the graphic that accompanies the article indicates that the low-end estimate for the entire SF-LA-Anaheim route is still $48 billion, which isn’t much higher than the $43 billion estimate from 2009.
Sheehan does spend a lot of time actually explaining why the costs have gone up, noting the different options for constructing the segment in the Central Valley. He gives a lot of quotes to members of the CHSRA, including CEO Roelof van Ark and board member Lynn Schenk:
Lynn Schenk, a former congresswoman from San Diego and a member of the rail authority’s board, said the 2009 plan was created in “an atmosphere of wishes, hopes and faith, and … was more of a sales and marketing piece” than a reliable prediction of costs.
Schenk said the October business plan will be “just about our last chance to rebuild confidence in this project, and us, that we can get this done” in the face of growing statewide concern over the rail project.
Van Ark also understands the implications of the new business plan, which will detail not only the costs for the statewide system, but also how the authority expects to pay for it.
And, he added, it will paint a much more realistic picture than the 2009 plan.
“We – I say we even though I wasn’t around – we were a little bit optimistic in those days,” van Ark said.
This suggests that the new estimates are much more accurate and, therefore, less likely to rise. Earlier estimates were made based on less detailed information, and therefore had less certainty. Sheehan’s article criticizes the new cost estimates, but in fact they should be praised for being more realistic.
Of course, the main failing of the article is the same failing that most members of the media make when assessing the cost of a big project – there’s no discussion of the costs of not building high speed rail. Those costs have been estimated at $100 billion. Readers ought to have been given that information, which is important to an honest and accurate assessment of the costs and benefits of the project.
I’m not saying Sheehan is a bad reporter. He’s a very good one, and has shown a good understanding of the details of the project. The problem is instead with the basic assumptions and biases of investigative journalism these days, where government is assumed to be lying or lacking controls, where critics are never shown to have anything other than neutral intentions, and where the bigger picture of costs and benefits tends to not get shown. It may help get more eyeballs on a story. But I’m not sure it helps get us better public policies.