This post originally appeared on Orphan Road.
This is not the type of thing you expect to read about a massive construction project:
Sound Transit confirmed last month that the total cost, including construction, inflation, debt payments, bond and other costs would total $37.9 billion. That figure was initially published by The Seattle Times after being confirmed by the agency and was later included in other media reports.
Sound Transit said when it reviewed the initial calculations before the larger number was published that it didn’t catch the fact that it double-counted $7 billion in costs, inflating the total. The amount double-counted was the portion of construction costs to be financed through bond sales.
Double-counting is, of course, a big problem. We like accuracy in our numbers. Still, the whole thing is sorta like the “Community Chest” card in the game Monopoly: “bank error in your favor, collect $7.1 billion.” Not the kind of thing you want to happen all the time, but better this way than the other.
Mostly, though, I think it goes to show the futility of trying ot project debt payments that far out in advance. The Times, in its story, adds:
Sound Transit spokesman Geoff Patrick … says the best figure for the public to use is $10.8 billion, which includes only the capital cost of trains, tracks and other construction, in 2006 dollars.
When inflation, operating costs, finance fees, cash reserves and administration are included, the total for Sound Transit’s plan through 2027 is $23.6 billion, in year-of-expenditure dollars. The $30.8 billion figure includes additional debt payments after 2027.
$10.8? $23.6? $30.8? Pick a number. The important thing is that Sound Transit has a good bond rating and is able to borrow money at a reasonable rate.