Basically boils down to: If politicians get to call the shots in any way, it's going to run way over budget. Pretty much every single time.
Most recent example was the bridge deconstruction in our small town. It was supposed to cost 80k Euros to completely deconstruct it. Actual cost was 150k and we have the pillars still standing around. It's just business as usual here in Germany.
> If politicians get to call the shots in any way, it's going to run way over budget. Pretty much every single time.
This is nonsense. It's just that infrastructure projects that get delivered on schedule and on budget (or somewhat close to that) don't make for equally pretty HN headlines.
There's a lot of public infrastructure around. The vast majority of it was commissioned by politicians. The vast majority of it is just there, mentioned a few times in the local rag before commission and upon opening and that's it.
Sure, I wouldn't be surprised if public spending is more often out of budget or behind schedule than private spending like you suggest. But even then, Berlin Brandenburg is an exceptional case and suggesting that excesses like it are inevitable when politicians were involved is just nuts. There's plenty of competent politicians.
In my experience, the level of pride politicians show when initially announcing a project is a good indicator of how badly a project will go. The more politicians are "excited" about it, the more they will try to micromanage it later (to death) and the more they will be OK with any shit from the contractors actually building it and the more OK they are with it going over budget. It's easier to pull one over on a politician who makes the final decisions, than a professional project manager with tons of experience.
If it involves different political parties or governments (like BER, which had politicians from Berlin and from Brandenburg involved, both local and state, and the federal government too to some degree) then it gets even worse, a lot worse.
So projects merely commissioned by politicians usually do better (go over budget because of the moronic public bidding process, but that's a different issue), while projects not just commissioned but overseen by politicians do far less well.
>There's a lot of public infrastructure around. The vast majority of it was commissioned by politicians. The vast majority of it is just there, mentioned a few times in the local rag before commission and upon opening and that's it.
>Which you "proved" by carefully selecting a single anecdote?
I CAREFULLY SELECTED a single anecdote... did you miss the part where is detailed why toilets (as in more than one) and other government projects cost so much ant take such a long time to complete? What can I say, keep believing, comrade.
So we are all communists for pointing out that the press only report on public projects gone wrong and not the 1000s of projects that are on budget and on time? Please...
Maybe it's because publicly funded and managed projects have much greater scrutiny, and in many cases are required to respond to information requests. A private company is a black box and can use whatever means they please keep badly managed projects from becoming a story the press would be interested in.
Even the auditing firms are in on the game in the UK, so you really have no chance of knowing the truth until the bankruptcy is announced and the banks are lining up to get whatever assets are left.
Nah, I didn't call you __ALL__ communists because I was replying to a single douche who translated "I wager" to "I proved" while claiming I "carefully selected" a youtube video. In fact, I didn't ever call him a communist because it's not just the communists who call each other comrade, it's a leftist thing in general or least it used to be until the number of comrade run failed states became unbearable. I'm glad you like and trust the politicians so much, I'm sure they appreciate it.
> 1000s of projects that are on budget and on time
Ha, ha, ha, ha... Oh, you're serious :(
> A private company is a black box
That's why it's called a PRIVATE company. Is not your money, it's theirs, if they fuck up, they pay the consequences, it's simple.
Yeah, rules like "wheelchair accessibility" (1:21). Clearly the disabled citizens should just crap at home, so we can save a few bucks. And sustainability? Who needs that?!
Frankly, ReasonTV seems like a left-wing caricature of the libertarians. There's very likely a good case to be made of wastefulness, but that video didn't have it.
>Clearly the disabled citizens should just crap at home
Disabled citizens are clearly better served by waiting for the oversized "Super Commission of Wheelchair Access" that takes three months to put a stamp on a project that has wheelchair access. You clearly didn't even understand the argument.
>And sustainability? Who needs that?!
Buzzword, three months, stamp.
>Frankly, ReasonTV seems like a left-wing caricature of the libertarians. There's very likely a good case to be made of wastefulness, but that video didn't have it.
> Disabled citizens are clearly better served by waiting for the oversized "Super Commission of Wheelchair Access" that takes three months to put a stamp on a project that has wheelchair access.
There is no such commission, no such stamp. What there are, as the video says, is rules (and by the way, the guide shown is for visitors, nothing to do with construction). And yes, maybe disabled citizens are better off with those, because from what I can tell, the so-efficiently-renovated Bryant Park restroom has no wheelchair accessible stalls.
Again: is there waste? Absolutely, and it would have been nice to see some proper journalism covering it.
Actually, that would be the last time I saw a highway construction project get completed: a major revamp of the A2 highway as it circles my home town Eindhoven.
Politicans of all flavours, in all countries, for nearly all projects seems.
Yet just about every IT, aircraft and building project etc in the private sector comes in on time and under budget. Oh, wait, it barely ever happens there either!
Maybe it's large projects per se then. Maybe there's added risk when politicians and private sector interrelate.
The issue is simply that accurate estimation cannot be done for complex projects, yet people who aren't engineers and especially politicians cannot psychologically accept this, so insist on setting fixed size budgets (which then inevitably turn out to be insufficient).
A better approach would be to do what's done more in the tech industry - decide a project needs to be done, then allocate it a permanent percentage of total revenues with close supervision of the details, until it's completed.
> The issue is simply that accurate estimation cannot be done for complex projects
I do not think so. There are plenty of previous examples with enough similarities to estimate costs to +/- 20% at most, usually better.
A bigger problem may be that quoting wildly optimistic price is more likely to get a public project started, even though most parties understand that the actual budget and time will be very different. But as long as the project takes a long time those who gave original estimates / started execution have plenty of chances to move away. And then "well, when I was running it, things were different" is a decent defense.
Maybe I should have said "cannot be done reliably".
Even a very inaccurate and bad estimation process will yield correct estimates at least occasionally - stopped clocks and all that. But estimate-driven budget allocation is hardly useful if the result is wrong 50% of the time, and to me it feels like it's at least that unreliable. Although this story focuses on Germany, look at CrossRail in the UK for another pertinent example. It was "on time and on budget" right up until a few months before launch, when it suddenly wasn't on time or on budget anymore, and in fact, after churning through some CEOs, eventually they got one willing to admit the truth - that nobody knew how long it would take to complete. But by then they had started shutting down the project, e.g. by laying off their entire internal and external communications team. It'd have been far more effective if they'd admitted up front they didn't know exactly how long it'd take.
That's actually more like the approach taken in the past in the UK for huge infrastructure projects, or road and power station, sometimes via setting up a specific (nation or city) owned company that got funding rounds! Yes, projects turned out more expensive than thought quite often, but it didn't make headlines quite the same. It was managed to stay good value rather than expected to hit a precise penny-accurate budget.
I think the modern tendency to seek cheapest bid, rather than best value, makes it far worse. In trying to save money time and again they end up spending far more...
If politicians get to call the shots in any way, it's going to run way over budget. Pretty much every single time.
My son talks a lot about a study that showed optimists badly underestimated how long a project would take. So did pessimists, though their estimates were less egregiously wrong.
Basically, if people are involved, you can assume that budgets and time estimates are hand-wavy, ballpark guestimates at best.
Life will get in the way. Even people who truly understand that will fail to accurately predict just how much life will get in their way.
If you always give the contract to the company that offers the lowest price, don't be surprised that it eventually gets too low to cover the real costs.
80k for a project that likely consists of months of filing for permits, coordinating tens of people and machines? Sounds like a joke.
>After the prescribed date, the bids are opened and assessed, and either the "lowest cost" or "most economically advantageous tender" is chosen. The contract award must also be reported in the OJEU and be published electronically on Tenders Electronic Daily ('TED'). [1]
It's difficult to choose the best offer if you are legally obliged to choose the cheapest one. This has led to a situation where all companies have to make cheap offers. The only way to make money is by invoicing bills for unforeseen work that wasn't covered by the original offer.
The irony of the situation is that there was an offer by the industry to build the airport for a fixed price. But Berlin chose to build the airport by themselves because that was supposed to be cheaper.
Well, Athens chose the other way: [2]
> However, after delays and slow development, the project was revived in 1991 with the then government launching an international tender for the selection of a build-own-operate-transfer partner for the airport project, with Hochtief of Germany being selected.
>In 1996, Athens International Airport S.A. (AIA) was established as a Public–private partnership with a 30-year concession agreement.[1] That same year, the €2.1 billion development finally began with an estimated completion date of February 2001. The airport construction was completed five months before schedule, but was delayed opening a month due to surface connections to Attiki Odos not being completed. The airport officially opened on March 28, 2001.
> If you always give the contract to the company that offers the lowest price, don't be surprised that it eventually gets too low to cover the real costs.
It's a known problem no one seems to care about. The Swiss do it better: They throw the cheapest and most expensive offers out and pick a contractor from the middle price range. Seems to work well for them in most cases.
> 80k for a project that likely consists of months of filing for permits, coordinating tens of people and machines?
It was a small bridge for pedestrians and cyclists that was closed about 5 weeks before they took it down, which took the crane just a couple hours.
It was a project as simple as it gets and they still went way over budget while also leaving half the bridge standing. I just wish I could say this was an outlier, but it's commonplace around here.
The store is the same everywhere. I find very little info about the New Karolinska hospital in English, but it ended up being several billion SEK more expensive than planned. The cost is spread out over 30ish years,but it has already cost 18bn SEK (1.8bn EUR).
> Basically boils down to: If politicians get to call the shots in any way, it's going to run way over budget. Pretty much every single time.
So it’s not a surprise that we find counter examples in strong democracies. The Gotthard Basistunnel was build faster than projected and about 30% cheaper [1].
Genuine question but have there been studies comparing public and private construction projects and whether or not both go overboard financially/time-wise?
Also the us. The subway extension to Dulles airport is years over due and well over budget.
I don’t think it’s a problem with government. If you want these sorts of public good projects built, you need government to do it. Government doesn’t have the same incentives that private business does, and there are positives and negatives with that. A profit oriented organization would never have taken on projects of this scale.
Istanbul Airport was built in 3 years by private companies, it was opened this year and considered as biggest after the new Chinese airport being built.
Not only that, large parts of it remain under construction. I know because I’ve been there two weeks ago. There was raw cement residue sitting uncleared before passport control. The signage is half broken and half incomplete. Instead of signage they have temp workers shouting the names of connecting flights and you have to huddle over to that guy and hope to god he knows what he’s doing.
Oh, and it takes 4+ hours to come to Kadikoy, the centre of the town on the Asian side.
It might be less of a disaster than the Berlin-Brandenburg mentioned here, but only barely so.
I was aware of those issues while I was typing the comment. One of my cousins worked in the construction (as a worker), heard things from him, too.
My point was about private companies building airports. If Turkish government built Istanbul Airport, would there be no deaths ?
Worker rights definitely make difference. But in the context of new Berlin airport, it looks like the problem is more about being able to organize and being able to manage a huge project.
I meant more in the vein of government having a large role in being the referee in these kind of issues. Had Istanbul Airport been built in Germany with the exact same private companies, I suspect it would have far fewer of a death toll, since the German government is much more aggressive in coming after workplace safety violations. So even if private companies are ultimately responsible, the government still does have a large role in keeping everything in check - a role Germany and Turkey failed in different ways.
Sorry to hear about your cousin, though, I hope he managed to get out unscathed.
And there's also Hamburg's Elbphilharmonie: https://www.ft.com/content/d59a5164-d41d-11e6-9341-7393bb2e1...
Basically boils down to: If politicians get to call the shots in any way, it's going to run way over budget. Pretty much every single time.
Most recent example was the bridge deconstruction in our small town. It was supposed to cost 80k Euros to completely deconstruct it. Actual cost was 150k and we have the pillars still standing around. It's just business as usual here in Germany.