People don't price loaves of bread for fun anymore. I
remember back in the early '80s the rate of inflation was a laughing
topic of conversation. Many wondered how much a trip to the grocery store would
cost in 20 years, and it usually calculated into the thousands. Price
increases, however, are no longer a part of the sense of humor. Heck,
they're ignored even when it's time to be serious.
According to an audit issued by the U.S. Department of
Transportation's inspector general, the cost to improve the Springfield
Interchange in Virginia--The Mixing Bowl--is fast approaching $1
billion. Back in 1994, the state's Commonwealth Transportation Board
approved a $241 million plan. It was still a steep price back then, but
commuters were anxious for the project to spring into action. The Springfield
Interchange is the deadliest and most confusing grid in Virginia, and the new
Mixing Bowl was viewed by many as a healthy serving of good.
Since then, however, cost estimates have risen a portly 180%
to the latest estimate of $676.5 million.
So what's the most shameful act behind this cheap
mismanagement of funds? According to the U.S. DOT inspector general, VDOT
failed to assume any increase in the cost of materials or labor for the life of
the project between 1994 and 2001. This alone tacked an additional $44 million
on the final project price.
The Mixing Bowl suffered hikes in four other major areas:
* Feeling the pressure from Fairfax County officials,
VDOT added more ramps from the interchange to Franconia and Old Keene Mille
roads. The project expanded to include the widening of Loisdale Road and
Commerce Street, improvements officials believed would help traffic flow
through downtown Springfield. The maneuver called for an additional $30
million;
* The public basically decided more noise walls were
needed, and more retaining walls were installed to accommodate extra work on
utilities. The package cost $54.3 million, which included the replacement of
bridges engineers thought could simply be redecked;
* Fairfax County supervisors pushed for broader
efforts to ease congestion during construction. This resulted in an increased
presence by Virginia State Police, expanded local bus service and improved
roads in the area. This called for another $31.2 million; and
* Widening Franconia Road took additional land from
Lee High School, and the Fairfax County School Board demanded compensation.
VDOT agreed to replace fields, tennis courts and a press box for $500,000.
Ignoring the rate of inflation for eight years has really
left The Mixing Bowl vulnerable to a serious licking from critics. I believe
this was another case of low-balling. The public would have taken a knife to
any proposal asking for $600 million back in 1994. Still, keeping predicted
costs low for the sake of approval is a bad practice certain people in this
industry continue to follow. If you're upfront with people they are more
willing to accept a grandiose figure. It may take a little while, but constant
PR on the benefits of a massive road project would diminish the initial objection.
However, when you present a number then continually tack on more it's
only natural for people to feel betrayed. For some obscure reason those on
planning commissions feel it is best to put a cover on the real deal. In the
meantime, this industry is looking more and more like an addicted
purse-snatcher.
Cost overruns have been happening since the dawn of public
infrastructure. According to a study conducted by Danish Prof. Bent Flyvbjerg,
258 projects built between 1910 and 1998 in the U.S. and Europe underestimated
final costs by an average of 28%.
Now I know there are legitimate unexpected costs involved
with every project. Widening streets and adding more noise walls due to public
demand are sometimes tough to predict. But inflation is a given in this
country. Dismissing it is inexcusable. VDOT has a rate installed now--a
soft 3%--so you can expect a total cost of $1 billion, maybe more. The
checkout counter will remain open.
