ST2 hasn’t even been approved and the cost has already come down by more than $7 billion:

It will cost an estimated $30.8 billion to build an expanded Sound Transit light rail system, operate it for 20 years and repay financing costs over 50 years, according to a revised calculation made by Sound Transit.

This is more than $7 billion less than the agency reported earlier.

Urban-area Puget Sound voters will be asked to approve the new amount as part of a November ballot and would continue to pay for it until bonds are repaid in 2057, the agency said.

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. Sound Transit spokesman Geoff Patrick said someone outside his agency, whom he wouldn’t identify, pointed out the error.

Wow. I guess that should make it easier for voters to swallow!

3 Replies to “Light Rail $7 billion less than Original Estimate”

  1. It’s ridiculous that voters are being presented with interest payments as “cost”. When you buy a house on the market for $400,000, you don’t say “This house is $800,000” – you say it’s $400,000.

  2. I agree. ST all along has been saying the cost is 10.8 billion, and after the “error” was found, ST’s estimate is still 10.8 billion. It’s the press that has been wildly throwing around the 37 (sorry, now it’s 30) billion dollar number. All it does is confuse the public, and I wonder if that is the underlying intention of reporting the interest numbers as part of the cost. It’s a disservice to their readers.

  3. Boy do I disagree.

    It’s a conscious choice to borrow all the money needed for capital projects rather than to match expenses to the amount available. Every dollar financed through bonds requires more than another dollar in finance charges, so the result is that you get half as much done for the same number of dollars. How can you say that doesn’t matter?

    When you buy a house you put up with finance charges because you have no choice, but governments have a choice. Bond financing is all done so politicians can promise they will finish things fast, but more than doubling the cost is too high a cost for that, given the other transportation needs – to say nothing of education, health care and housing.

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