The goal was to review how the responsibilities of different levels of government (federal/national, state/provincial, regional, local, agency) in other countries vary in terms of government, project governance, funding, regulation, planning, and project execution. We evaluated four critical areas for each country—governance, regulation, finance, and construction—to establish a common baseline of understanding and comparison.
Eno collected data on 132 rail transit projects completed in the case study countries since 2000. This information includes data on grade alignment, construction timelines, stations, and construction costs. All construction costs were converted into 2021 U.S. dollars using the OECD’s purchasing power parity rates and adjusted for inflation using the Engineering News-Record Construction Cost Index (CCI). These data were added to Eno’s transit construction cost dataset.
Comparing as-built construction costs can offer some clues as to whether other countries are building public transit systems more cost-effectively. However, there are several caveats and challenges when attempting to make a true “apples to apples” comparison between domestic and international construction costs, and between different projects within the same country. The final output of the database is a comparable “unit cost,” in inflation-and currency-adjusted dollars per mile of rail line.
But not all projects and agencies are transparent in their cost reporting, and when they are the data tend to be reported inconsistently. For example, some projects include costs not associated with the actual unit cost of mile of rail line. Elements like maintenance facilities or rolling stock are included in some projects, but not others. Some projects deal with unstable soils, and costs can vary based on the number and length of stations. Detailed cost breakdowns are typically not reported for most projects, and if they are, there may be vast differences in the categories used.
For federally funded projects in the United States, regulations require agencies to report cost breakdowns using nine Standard Cost Categories (SCCs). However, as the Eno team discovered when reviewing select cost breakdowns received through Freedom of Information Act (FOIA) requests, some agencies in the United States also use their own internal methodology to track costs, especially for projects that are locally funded. Rather than reporting project costs for items like stations, sitework, and stations, costs in some cases are broken down by project phase (i.e. preliminary engineering or final design). Cost breakdown methodologies between countries can also vary.
When comparing construction costs, it is important to avoid drawing sweeping conclusions or over-interpreting trends, though such comparisons will become richer with more data.
2.1 Government, governance, and legal structure
In general, democracies are governing systems where citizens are sovereign and control the government. Citizens vote to elect legislative representatives who have constitutional power to make policy decisions. The cases in this report are all considered to be parliamentary or presidential democracies. In a parliamentary democracy, the executive branch of government is a cabinet headed by a prime minister. In a presidential democracy, the executive branch of government is led by a president who heads an executive branch of government that is separate from the legislative branch of government (Table 1).
Such attributes matter for project delivery because the executive branch of the national government distributes funds to transit projects and creates regulations that govern their construction. Consistent policies matter for delivering megaprojects with long timelines. The case study countries range from highly centralized to federated power structures. Centralized countries make most or all of the funding and planning authorizations at the national level, while federated countries delegate much of this power to lower-level units of government.
Countries also differ in the type of legal system they use. Roughly 150 countries around the world use civil law systems, and 80 use common law systems. In countries that practice common law, published judicial opinions often set precedent for succeeding cases. In civil law systems, codified statutes determine judicial outcomes. Table 1 shows the classification of each legal system for the 10 case study countries, which can affect agencies’ ability to manage utility relocation, environmental reviews, and multijurisdictional issues related to delivering a large transit project.
We also examined varying roles of government, including transit-related responsibilities of the national government (e.g. transportation cabinet officials, ministers of other relevant agencies, and, in some cases, research institutions); sub-national governments (i.e. provincial, regional, or local governments); transit agencies (i.e. the primary capital project delivery and/or operating bodies of public transit); and other stakeholders, such as special purpose delivery vehicles and private operators, if applicable.
2.2 Project regulation and planning
Transit projects usually need a range of authorizations and permits to proceed. Those usually require mandated planning processes, environmental review, and safety standards such as fire protection and preparation for seismic events. Such approvals to proceed are often necessary to receive funding and can be set at all different levels of government, depending on the country and its structure.
Project planning consists of all processes that occur prior to construction. It begins when cities or metropolitan areas submit project funding proposals from state, provincial, or national governments. Throughout this process, there is interaction between officials at all levels of government. Similarly, the countries included in this study require some form of an environmental review process to allow project sponsors (i.e. the public institutions charged with leading project delivery) to measure the environmental externalities associated with the project and its construction. At this point, the project sponsor either evaluates one discrete project or a series of alternatives, comparing it with a “no-build” option, and assesses its potential impacts on the environment.
Laws and regulations at all levels of government dictate the processes by which projects are planned and what is possible for project delivery. Throughout both the preliminary planning and environmental review phases, varying degrees of public input are sought to inform the final documentation produced and, ultimately, the nature of the project. The public is typically given adefined period of time to offer comments on the proposed project, and government officials are generally required to respond to those comments or incorporate them into project plans.
Rail transit capital projects are expensive, and funding is derived from a combination of sources.
Most national governments provide grants to project sponsors as part or all their funding package. These grants involve competitive applications, legislative earmarks, infrastructure banks, or other programs and are typically distributed from a national-level transportation agency. Local, state, or provincial governments also provide grants or dedicated taxes for transit projects, especially in federated systems that devolve significant planning authority to local governments. Typically, local contributions comprise a smaller portion of capital funding than national government grants, but in some cases the national government provides little or no financial support for urban transit.
In some systems, passenger fare revenue exceeds operating expenses and provides some of the funding resources needed for capital expansion. Project sponsors can bond against future passenger fares to complete a funding package. This is uncommon but has been used to fund some ofthe system expansions in Chile, South Korea, and South Africa. Also relatively rare is private funding, either through a public-private financing partnership (P3) or other arrangement where a for-profit consortium builds and operates transit under an agreement with a government or agency. In this case, private investors are repaid through passenger fares or promises of government funding if they meet construction or operational requirements.
The work of building a transit project is typically contracted out to private companies that specialize in various aspects of construction. The transit agency (or project sponsor) manages and oversees the project, and also oversees private firms that provide services such as engineering, planning, project management, and design. Construction contractors build the physical infrastructure and project managers who are either public sector employees or hired private consultants are also overseen by the project sponsor.
In some cases, public special purpose delivery vehicles (SPDVs) are created for specific projects to oversee planning and construction. These temporary, self-governed entities are more common outside of the U.S. and are usually public corporations empowered to make decisions about project delivery.
There are several contract types available for organizing the project delivery process, including:
- Design-bid-build (DBB),in which the project sponsor hires an engineering and planning firm to design the project and awards separate contracts to construction companies based on the designer’s plans. The project sponsor owns design details and assumes much of the project’s financial risk.
- Design-build (DB) allows the project sponsor to procure design and construction together in a single contract. The DB entity is typically a consortium of multiple firms that is liable for delivering the planned asset, usually according to a fixed price.
- Construction manager-at-risk(CMR) contracts shift some control and risk to the private sector, though the project sponsor controls and owns project designs. The construction manager is selected prior to the completion of the design, and thus can participate in the design process.
Project construction also involves procurement rules, workforce compensation and unionization, project management structures, and approaches to address community disruption. These factors can vary from project-to-project and country-to-country. For example, many projects cover workforce healthcare and other benefit costs directly either through employer-based plans or government payroll taxes, and other countries do not. Those that are noteworthy or consistent within a country are highlighted in this report.