Comment by Anechoic | Hacker News Reader

Comment by Anechoic | Hacker News Reader

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the criticism amounts almost entirely to basic arithmetic and comparisons to existing systems that are built on rather different principles.

But many of most important (and show-stopping) principles involved are the same, and those are what tend to cause delays and increase costs - things like running into unexpected geology, dealing with NIMBY's, the eminent domain process and so on.

He seems to think that, in between, his colleagues have been perfecting the fine forms of the art and polishing its many facets.

They (we) are. Want to see for yourself? Go to the Transportation Research Board annual meeting in Washington D.C.: http://www.trb.org/AnnualMeeting2014/AnnualMeeting2014.aspx

Except feats that were once fairly common, such as building the Hoover Dam under budget and two years ahead of schedule [1], are in the realm of the mythical these days.

You can say the same about the original elevated Boston Artery, the 19th century railroads, etc. The biggest difference between the mega-projects of old and today involve 1) the environmental process and 2) commitments to worker safety. It's fairly easy to build a project quickly when you don't care about splitting neighborhoods, killing/maiming workers and contaminating soil. The environmental process in particular has been a double-edged sword - it's done well in protecting the environment and communities, but it also provides means for anyone who doesn't like any facet of a project to significanty delay (or kill) it.

>The biggest difference between the mega-projects of old and today involve 1) the environmental process and 2) commitments to worker safety.

I don't see why environmental and safety considerations are such big unknowns, I think we have a pretty good handle on both by now. Are they factoring to build it with pollution and no safety when they estimate the cost and schedule these days?

In fact, if you read about the history of Hoover Dam there were a number of these things that they weren't legally mandated to do back then, but did them anyway. For instance, workers were offered employer-based health insurance (an arrangement that later evolved into what we know today as Kaiser Permanente).

I think we have a pretty good handle on both by now

In terms of a specific project, not really. Look at everything that goes into an environmental study: watershed/water quality, affected wildlife/endangered species, noise & vibration, soil contamination, archaeological issues, visual impacts, rodent/pests, etc, etc. On top of that, you have to consider the effects of all of those areas during construction and ongoing operations for 20+ years. And that doesn't even account for NIMBY issues.

When you're getting into the details of a specific project, it can quickly become overwhelming, especially if you have people who may be philosophically opposed to the project hammering you with those issues time and time again.

Are they factoring to build it with pollution and no safety when they estimate the cost and schedule these days?

When you look at a project at a high level, you make general assumptions, but as you get more detailed and you know specifically what kind of equipment

Take for example, tunneling: At the start of a project, your best information tells you that the sand down to 70ft below grade is clay, so you make your cost and construction estimates using this assumption. You get into detailed design and send drill crews out to collect sample borings and you find out that in much of the area where you assumed sand, you actually have bedrock coming up to 10ft below grade. Now you're plans have to change - instead of doing cut-and-cover tunneling everywhere, you have to blast in some sections, which means having to get a blasting contractor, deal with protecting nearby structures, changing traffic patterns to allow for the blasting etc. In the old days, the project would have just blasted, and if someone's foundation got cracked in the process, too bad. Today that won't fly.

edit: just saw your edit

In fact, if you read about the history of Hoover Dam there were a number of these things that they weren't legally mandated to do back then, but did them anyway.

Compare the number of people killed at the Hoover Dam project compared with the number killed during the Big Dig.

I really appreciate and thank you for the perspective you bring to this discussion. Even if I turn out to be completely wrong, I'll still be glad I initiated it if only to elicit this kind of response.

That being said, I'm by no means persuaded. If the original technical estimates can't be completely precise, why do they always happen to always be inaccurate on the bad side these days? How come they rarely plan for bedrock and get a lot more clay instead?

Overall, I understand there are new challenges today that older projects didn't encounter. On the other hand, they also had serious challenges that we don't meet (very bad transportation network, frequent strikes, including the wildcat variety, a much less educated workforce etc.) Maybe it's even true that, despite all the new technologies and infrastructure to help us, the cost per unit needs to be higher these days and work needs to proceed more slowly. But that still doesn't explain why projects almost always still run over that higher cost and longer schedule.

why do they always happen to always be inaccurate on the bad side these days?

I don't have time to find it right now, but I remember reading a study a few years ago that showed most projects to in fact come in on time and on budget. It's the few major projects that make the headlines that have schedule & budget problems, and (to no surprise) those tend to be the projects that have to deal with the most complexities. It's not different than large software projects.

On the other hand, they also had serious challenges that we don't meet

Sure, but they could work around those problems by (literally) throwing bodies at that project and dumping crap into rivers. And some of those things you indentifiy as problems ("very bad transportation network," "less educated workforce") aren't really problems - "less educated" means "cheap": the project just needed to train you to hold a rivet in place or swing a hammer, today's workforce needs to know how to manage complex diesel equipment. "very bad transportation network" means "more room to work": building the Hoover Dam in the boonies is in many respects much less difficult than building the 2nd Avenue subway under a crowded Manhattan or building the Big Dig under a busy Boston. In fact most of the high cost of CA HSR isn't from building the sections in the boonies (which is why they're starting construction there first), it's building the connections into the heavily populated metro areas like San Francisco and LA.

If you ever have the chance (and you're an American), go to a public meeting organized by a huge capital project. Listen to all of the comments (ranging from measured to angry, reasonable to crazy) and keep in mind that the project has to address all of those concerns. That will give you a sense of scale of the problem. In fact I spend this past weekend dealing with concerns that frankly defy the laws of thermodynamics, but the project has to address, which means I spend billing hours debunking it.

edit: enko makes a good point, you could go ulta-conservative with cost estimation, but then every highway widening project becomes a $100 billion undertaking and nothing would ever get done. Projects to set aside 5-15% for continengy and most of the time that's enough. Of course there are outliers, and those are what tend to get attention. You also have times were a project may also set a relatively low budget, but they get back bids from contractors and/or engineering firms that way exceed the budget, so the budget gets increased.

I would like to see that study saying most projects come in under budget. I'm guessing it doesn't apply to the large and complex projects we're talking about here, which are probably harder to estimate. And, the fact that it's in California may matter, too. According to Musk yesterday, without a citation:

    I don’t think we should do the high-speed 
    rail thing because it’s currently slated 
    to be roughly $70 billion but if one ratio 
    is the cost at approval time versus the 
    cost at completion time of most large 
    projects I think it’s probably going to be 
    close to $100 billion.

http://www.forbes.com/sites/hannahelliott/2013/08/12/latest-...

And, according to this:

http://californiawatch.org/dailyreport/bullet-train-bidder-h...

...the lowest (and winning) bidder for early work on the California HSR has a history of cost overruns, so things aren't starting out so hot.

Your last paragraph seems to say that we don't want accurate estimates because then we might not do the projects. That's the point of knowing the costs. We don't want to do projects that are too expensive.

Large projects, like Hyperloop or HSR, are probably the ones particularly likely to be "outliers" (if indeed projects with overruns are outliers) and big projects are the ones where that damage costs the most, so it's a double whammy.

Meanwhile, if we're now accepting that lowballing is a good idea, as your last paragraph says, then I don't understand why you seem to be defending the original article as Musk must just be lowballing and he expects overruns. It will take a lot of overruns to catch up with the ostensible California HSR budget.

I will say that, with SpaceX, Musk and the government have fixed-price contracts, so SpaceX eats cost overruns. They also have the lowest space cargo delivery cost for their class. This gives me some evidence that Musk could deliver more cheaply and on budget than the linked industry observer expects.

Your last paragraph seems to say that we don't want accurate estimates because then we might not do the projects.

No, my last paragraph says we don't want ultra-conservative estimates because we would definitely not do the projects.

Meanwhile, if we're now accepting that lowballing is a good idea, as your last paragraph says

My last paragraph doesn't say that.

This gives me some evidence that Musk could deliver more cheaply and on budget than the linked industry observer expects.

Perhaps. But if I were a betting man, I think Must will be in for a rude awakening upon discovering the mess that is the public environmental process, as have many other entrepreneurs before him.

> why do they always happen to always be inaccurate on the bad side these days?

Well, an obvious factor is that there is a huge incentive to under-estimate for anyone with an interest in the project's green light. The cheaper a project looks on that initial paper, the more likely it will be approved, and if/when it goes over budget, what are they going to do? Cancel it with the tunnel half dug?

It's a political/societal problem of poor economic ideologies, lowest-bidder pricing and misaligned incentives, coupled with a low aversion to - or even understanding of - economic crime.

And it's by no means limited to these mega-projects. I know a certain software company who specialises in winning contracts by low-balling the price, expecting to argue it up later when all sorts of "unexpected" issues arise - those same issues the losing bids allowed for. Pretty much the same game.

Re: EPA regulations. I think Elon's familiar with the curveballs of meeting regulations :)

https://twitter.com/TalulahRiley/status/320421724644573184 https://twitter.com/TalulahRiley/status/320422298618302464

Just to toss in an entertaining data point.

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