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Analysis | Florida’s New Train Has Lessons for California

Florida’s privately owned Brightline railroad, founded in 2017, is poised to start service between Miami and Orlando in a few weeks. In California, meanwhile, where voters approved funding for high-speed rail in 2008, the state recently announced that it will soon begin reviewing preliminary bids from manufacturers for what amounts to a Train to nowhere — connecting the minor cities of Merced and Bakersfield, with no concrete plan to reach either Los Angeles or the Bay Area — that is scheduled to begin operations in 2030, or maybe 2033.

What gives? Is this yet another example of the private sector pwning the public sector? Not quite.

Part of the difference is project scope — Miami and Orlando are much closer than San Francisco and L.A. — and part of it is train speed. Brightline refers to itself as high-speed rail in marketing hype, but it wouldn’t come close to qualifying for that title by European or Asian standards. California, because it’s trying to connect more distant cities and compete with air travel, is aiming for a faster rail line that’s harder to build.

But the most important difference is that Brightline brings to the table a private-sector superpower: the ability, and willingness, to say no and just walk away.

Large-scale civil engineering projects in the US are typically committed to long before the details have been worked out. People come up with an idea, such as a high-speed rail line connecting California’s main cities, then they come up with an estimate of what it will cost, then they try to get political support for the project.

Only once the project has been launched do the various rounds of community consultation and environmental review start. What route will the train take? Will there be viaducts or tunnels, or will the train run at grade? How many stations will there be? What kind of noise mitigations will there be?

Since the individual stakeholders involved in those questions aren’t personally shouldering the costs, they tend not to put much weight on cost-effectiveness. The stakeholders in question can be homeowners, local businesses, labor unions, politicians — almost anybody.

In one noteworthy case from New York identified by Transit Cost Project researcher Alon Levy, the New York City Department of Parks & Recreation asked the MTA to pay it $11 million in exchange for temporarily using part of a city playground as a staging area for Second Avenue Subway construction.

On one level, it should be easy to avoid this kind of wasteful spending — just say no when you are asked to do expensive things that have little actual value. But the structure of decision-making combined with public-sector management makes it challenging. In the academic research, this problem is known as “lock-in.” Once you’ve committed in principle to a major project, it’s difficult to say, “Actually, we’re not going to build it unless the residents of Community X suck it up and let us do it the most cost-effective way possible.” Each little concession may seem relatively minor relative to the scale of the project, but $11 million here and $11 million there pretty quickly adds up to real money.

Of course, managers in the private sector can fall into the same kind of ego-driven trap. But at the end of the day, the profit motive — and the need to raise funds from investors — requires them to have a credible exit strategy. Nothing about Brightline’s structure magically guaranteed that the Florida project would happen. But it did guarantee that if stakeholders encumbered it with too many “nice to haves,” then it wouldn’t happen.

In many cases, that means private engineering projects just won’t happen. But it also means that, if they do happen, they tend to be relatively cost-effective.

This is not without its own problems.

Brightline has an unusually high number of passenger deaths, an issue that could probably be mitigated with more spending on fences or gates or expensive grade separations. The company argues that the existence of the train itself is a win for safety since it means fewer cars on the road.

In any given project, there will always be more and less expensive options, and there is usually some kind of benefit to spending more. This is not unique to trains. One research paper found that the primary driver of increased per-mile spending on highway construction, for example, is “the rise of ‘citizen voice’ in government decision-making in the early 1970s.” And the greater the number of people who have a say, the greater the likelihood that something will cost more.

Sometimes that’s money worth spending, and sometimes it isn’t. But private actors have greater credibility when they threaten to walk away. It’s unclear if Brightline will ever work as a profitable business, but it’s obvious that it couldn’t work if construction costs exploded. So it’s willing to just say no.

The public sector can accomplish something similar.

At one point during the construction of the most recent extension of the Boston area’s mass-transit system, then-Governor Charlie Baker said it was too expensive and threatened to kill the project. Faced with the threat of cancellation, planners came back with smaller stations, less landscaping, no bicycle path and other value-engineering measures. Baker said yes to this cheaper version.

It sounds like a pretty simple idea — Just Say No, where have I heard that before? — but Baker had the advantage that none of his personal prestige or political capital was invested in the idea. Normally large-scale proposals develop a polarized dynamic between champions who are overcommitted to their completion and critics who are determined to kill the whole thing.

Conditionality — where you genuinely want to do the project but are willing to walk away in the face of excessive demands — is common in private enterprise but relatively rare in government. To improve its infrastructure, the US needs to infuse the public sector with more of that spirit.

Elsewhere on Bloomberg Opinion:

• Amtrak’s Boondoggles Need to Stop: The Editors

• No, Amtrak Isn’t About to Turn a Profit: Justin Fox

• US High-Speed Rail Is Going Nowhere Fast: Noah Smith

For more Bloomberg Opinion, subscribe to  our newsletter .

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Matthew Yglesias is a columnist for Bloomberg Opinion. A co-founder of and former columnist for Vox, he writes the Slow Boring blog and newsletter. He is author, most recently, of “One Billion Americans.”

More stories like this are available on bloomberg.com/opinion

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