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96 Estimating Soft Costs for Major Public Transportation Fixed Guideway Projects LIGHT + HEAVY RAIL: ALL SOFT COSTS LIGHT + HEAVY RAIL: ADMIN COSTS ONLY 60% 35% Management (% of Construction) 50% 30% 25% Soft Costs (% of Construction) 40% 20% 30% 15% 20% 2 10% R = 0.01 2 R = 0.09 10% 5% 0% 0% (2) - 2 4 6 8 (2) - 2 4 6 8 Years of Delay Years of Delay 2 2 Sample Size: 15 R = 0.01 t-Stat = -0.43 Sample Size: 15 R = 0.09 t-Stat = -1.14 Figure 72. Soft costs as a percentage of construction versus years of delay in opening. Figure 73 and Figure 74 examine this potential explanation by comparing the rate of growth of soft and hard costs as the vertical profile becomes more complex. Soft and construction costs are on a per-linear-foot basis, and in every pane construction costs are shown as green diamonds, with a green dashed trend line. Figure 73 shows that for light and heavy rail and both modes combined, as more of the align- ment is in cut and cover and tunnels, construction costs rise faster than soft costs. Figure 74 shows a similar trend when alignment is simply not at grade, although the pattern is less strong. These trends affirm that when the alignment moves from at grade to more complex tunnel, bridge, or aerial structures, construction costs expand rapidly, sometimes faster than soft costs. C.16. Isolating Agency-Specific Effects One potential source of variance within the dataset used here is that financial and construc- tion management practices differ from agency to agency. Where one agency maintains construc- tion inspectors and managers on staff through the operating budget, another agency might LIGHT RAIL HEAVY RAIL LIGHT + HEAVY RAIL $40 $60 $60 Construction Costs Construction $35 Costs $50 $50 Construction Costs per LF (000) Costs per LF (000) 2 Costs per LF (000) $30 R = 0.38 Costs $40 $40 $25 2 R = 0.19 $20 2 $30 $30 R = 0.18 $15 $20 $20 $10 2 2 2 R = 0.03 R = 0.27 R = 0.41 $10 $10 $5 Soft Costs Soft Costs Soft Costs $- $- $- 0% 25% 50% 75% 100% 0% 25% 50% 75% 100% 0% 25% 50% 75% 100% % Guideway Below Grade % Guideway Below Grade % Guideway Below Grade 2 2 2 Soft Costs trend: R = 0.41 t-Stat = 3.87 R = 0.03 t-Stat = 0.76 R = 0.27 t-Stat: = 3.94 Figure 73. Soft costs and construction costs per linear foot with percent of guideway below grade.
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Supplementary As-Built Cost Analysis 97 LIGHT RAIL HEAVY RAIL LIGHT + HEAVY RAIL $45 $60 $60 $40 Construction $50 $50 $35 Costs Construction Construction Costs per LF (000) Costs per LF (000) Costs per LF (000) Costs Costs $30 $40 $40 $25 2 R = 0.28 $30 2 $30 $20 2 R = 0.02 R = 0.12 $15 $20 $20 2 $10 R = 0.36 2 Soft Costs R = 0.35 $10 Soft Costs $10 Soft Costs $5 2 R = 0.01 $- $- $- 0% 25% 50% 75% 100% 0% 25% 50% 75% 100% 0% 25% 50% 75% 100% % Guideway Not At-Grade % Guideway Not At-Grade % Guideway Not At-Grade 2 2 2 Soft Costs trend: R = 0.35 t-Stat = 3.45 R = 0.01 t-Stat = 0.52 R = 0.36 t-Stat: = 4.88 Figure 74. Soft costs and construction costs per linear foot with percentage of guideway not at grade. charge these employees to the project's capital budget, for example. In another case, certain agen- cies collect internal staff, force account, and contractor staff into separate operating accounts and then allocate them back to specific projects. These differing approaches may have some impact on the soft cost amount used in this analysis. The philosophy or style of agency management might have just as much impact on soft costs as the alignment profile or number of stations. However, it is particularly difficult to control for agency-specific effects given the range of potential impacts and the generally small number of new rail construction projects per agency. The dataset contains twelve distinct projects for Washington, DC, presenting an opportunity to try to isolate agency-specific effects. Examining only projects constructed by WMATA means analyzing projects with very similar project development processes and cost allocation practices. WMATA has expanded its Metrorail system incrementally over the past four decades, with each extension or new line treated as a discrete project in the database. This section of the report restates some of the previous analysis for WMATA projects only. Figure 75 shows that soft costs for WMATA projects have been increasing in percentage terms over time. From the initial Metrorail segments completed in the 1970s through the projects com- pleted in the late 1990s, WMATA has seen an increasing trend in soft costs. The initial segments of Washington DC's rail system had soft cost percentages of construction at about 20%. Through the rail extensions in the 1980s, soft cost percentages were mixed, with projects higher and lower than 20%, with a range from as low as 11% to as high as 38%. The three projects completed in the 1990s, however, had more consistent soft cost values of about 38%. Figure 76 examines the soft cost percentage of construction costs with the percent of project alignment not at grade. In contrast to the full database for heavy rail, WMATA projects suggest a declining trend in soft costs with more complex alignments. The heavy rail project database showed an increasing trend from 27% to 36% with a statistical relationship, but little correla- tion. The WMATA statistical relationship is also insignificant, but does result in a declining trend more similar to the combined project database. Analysis of the full project database suggests that this pattern may be caused by other project categories growing faster than soft costs for these alignment types. Figure 77 presents a similar analysis but is focused on only the proportion of alignment that is below grade for WMATA projects. The results of this WMATA analysis are similar to those
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98 Estimating Soft Costs for Major Public Transportation Fixed Guideway Projects HEAVY RAIL 60% Soft Costs (% of Construction) 2 R = 0.40 50% 40% 30% 20% 10% 0% 1970 1975 1980 1985 1990 1995 2000 Midyear of Expenditure 2 R = 0.40 t-Stat = 2.69 Figure 75. Soft costs as a percentage of construction versus midyear of expenditure, WMATA only. HEAVY RAIL 60% Soft Costs (% of Construction) 2 R = 0.05 50% 40% 30% 20% 10% 0% 0% 20% 40% 60% 80% 100% Percent of Guideway not At Grade 2 R = 0.05 t-Stat = -0.79 Figure 76. Soft costs as a percentage of construction with percentage of guideway not at grade, WMATA only. HEAVY RAIL 60% Soft Costs (% of Construction) 2 R = 0.08 50% 40% 30% 20% 10% 0% 0% 20% 40% 60% 80% 100% Percent of Guideway Below Grade 2 R = 0.08 t-Stat = -0.98 Figure 77. Soft costs as a percentage of construction with percentage of guideway below grade, WMATA only.
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Supplementary As-Built Cost Analysis 99 from the full database of heavy rail projects. The trend line shows a declining trend from a high of 30% to a low of about 22%, but the relationship is not statistically significant. Note that some WMATA projects are 100% below grade. These results suggest that below-grade alignment has no effect on soft costs as a percentage of construction costs. These WMATA Metrorail results do not support the full heavy rail database, nor do they demonstrate consistent relationships that may be expected for projects from the same agency. The results from the preceding WMATA-only data demonstrate the difficulty in identifying project characteristics that can be used to help estimate construction soft costs of major public transportation capital projects.