4 ms·

While I agree that the attitude shown in the quote is undesirable, I think it's more a symptom of the problem, not the underlying problem itself. He's essential

While I agree that the attitude shown in the quote is undesirable, I think it's more a symptom of the problem, not the underlying problem itself. He's essentially right. Infrastructure projects are constantly shot down because of cost concerns, yet we have crumbling infrastructure that needs to be replaced. If estimates became higher, approvals would decrease. One other piece I haven't seen mentioned yet: large construction projects that take years to complete are incredibly hard to estimate accurately, because unpredictable economic swings can cause the cost of items to vary quite a bit between when the estimate was produced, and when the work was actually being performed and purchased. This was one of the reasons why the Big Dig's estimates were so far off. Although there are a dozen other factors with that particular case as well.

chii 8y ago
Why can't the cost of materials be hedged against rising? Costs above initial estimates should only happen when there's an unknown (e.g, digging discovered a really hard rock layer that nobody knew about). Or weather issues beyond prediction (like tornadoes or hurricanes).
- vonmoltke 8y ago
  > Why can't the cost of materials be hedged against rising? How, other than by buying everything you need up-front, finding a place to store it until you need it, and hoping that it is still usable when you do?
  - andymcsherry 8y ago
    You can buy futures on basically any commodity to hedge against price fluctuations.
- xfitm3 8y ago
  Are you assuming cost increases are due to materials? labor is a huge cost, it might even exceed materials.
wwweston 8y ago
One factor in play is that many people only have experience with household-scale budgets. An intuition about what "millions" (let alone "billions") actually represents in terms of economic power is hazy at best. Business scale budgets sound extravagant; metropolis-scale or state-scale budgets are mind-boggling. How does such a person know what's "too much"? Absent a reasonable working model of costs involved in infrastructure projects, it's all going to sound like too much. And past a certain point on a spectrum of temperamental tendency to attribute laziness or wastefulness to other people, the working assumption is going to be it's boondoggles all the way down. The only way to fix this -- if it can be fixed -- is reinforcing narratives about the value of projects and measured collective values.
- xfitm3 8y ago
  I think you have a great point but it’s only part of the problem. I can affirm your sentiment with anecdotal experience. At my company cost discrepancies of less than 20k are considered a rounding error.
mc32 8y ago
Well, then, how is it other countries can make better estimates? I get that for various reasons our costs are higher, but why can’t we at least project costs more accurately?

chii 8y ago

Why can't the cost of materials be hedged against rising? Costs above initial estimates should only happen when there's an unknown (e.g, digging discovered a really hard rock layer that nobody knew about). Or weather issues beyond prediction (like tornadoes or hurricanes).

vonmoltke 8y ago
> Why can't the cost of materials be hedged against rising? How, other than by buying everything you need up-front, finding a place to store it until you need it, and hoping that it is still usable when you do?
- andymcsherry 8y ago
  You can buy futures on basically any commodity to hedge against price fluctuations.
xfitm3 8y ago
Are you assuming cost increases are due to materials? labor is a huge cost, it might even exceed materials.

wwweston 8y ago

One factor in play is that many people only have experience with household-scale budgets. An intuition about what "millions" (let alone "billions") actually represents in terms of economic power is hazy at best. Business scale budgets sound extravagant; metropolis-scale or state-scale budgets are mind-boggling. How does such a person know what's "too much"? Absent a reasonable working model of costs involved in infrastructure projects, it's all going to sound like too much. And past a certain point on a spectrum of temperamental tendency to attribute laziness or wastefulness to other people, the working assumption is going to be it's boondoggles all the way down. The only way to fix this -- if it can be fixed -- is reinforcing narratives about the value of projects and measured collective values.

xfitm3 8y ago
I think you have a great point but it’s only part of the problem. I can affirm your sentiment with anecdotal experience. At my company cost discrepancies of less than 20k are considered a rounding error.

mc32 8y ago

Well, then, how is it other countries can make better estimates? I get that for various reasons our costs are higher, but why can’t we at least project costs more accurately?