Want More Money for Rail-to-Dulles? Make the Project More Transparent.

Transparency is a beautiful thing.

It does not look like the Project Labor Agreement (PLA) controversy will fade away quietly. (For background, see “Games People PLA.”) Del. Robert G. Marshall, R-Manassas, has filed a bill to prohibit the use of state revenues for construction of Phase 2 of the Dulles Corridor Metrorail project unless the project meets three transparency standards.

The recently signed Memorandum of Agreement  between the McDonnell administration, the Obama administration, the Washington Metropolitan Airports Authority (MWAA), Fairfax County and Loudoun County calls for a restructuring of the costs and financing of Phase 2 of the $2.8 billion Rail-to-Dulles project. The state will contribute an additional $150 million to the construction, contingent upon approval by the General Assembly. Marshall’s bill is the first indication that the legislature’s approval cannot be taken for granted.

House Bill No. 2 would prohibit the state from contributing any funds to Phase 2 if (1) the project is subject to a Project Labor Agreement, (2) the policies or bylaws of the MWAA governing public access to meetings and records are  incompatible with Virginia’s Freedom of Information Act, or (3) phase 2 of the project and its finances will not be subject to audit by either the Virginia Department of Transportation or Auditor of Public Accounts.

MWAA’s board wants to use the PLA that Dulles Transit Partners voluntarily adopted for Phase 1 and as a model for phase 2 — but make it mandatory. Critics charge that such a requirement would effectively eliminate non-union company from competition, resulting in a higher bid. An agreement between the state and the MWAA clarified that any PLA had to be consistent with the state’s Right to Work law, which protects the right of workers not to join a union, but left it unclear whether the MWAA still could require the prime contractor to adhere to a PLA with other requirements, such as hiring all workers (union or non-union) through a union work hall and contributing to union retirement funds.

The financing for Phase 2, which will rely heavily upon toll revenue paid by commuters on the Dulles Toll Road, has been highly controversial in Fairfax and Loudoun counties. Without the state’s $150 million contribution, the deal brokered by U.S. Transportation Secretary Ray LaHood could well fall apart.

The McDonnell administration has made no public comment upon the bill. But Marshall wrote in an email distribution of his bill, “Del. Joe May [R-Leesburg] and the McDonnell administration do not appear initially supportive of my effort to secure more transparency and accountability for taxpayer funds as provided in HB 2.”

— JAB


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5 responses to “Want More Money for Rail-to-Dulles? Make the Project More Transparent.”

  1. Starting to look like rail to Tyson’s was a prophetic moniker.

  2. Your attention to this issue is much appreciated by the people of Loudoun who are potential victims of this scam. Hiding real information behind a veil of secrecy is the modus operandi of rail promoters. One can only guess how the flow of mega bucks shapes the process of dreaming up “final preliminary estimates” or whatever they release to get the buy-in from their marks.
    Veronique de Rugy a senior research fellow at the Mercatus Center at George Mason University studys tax and budget issues. Check out what she says about how consistently infrastructure projects, especially rail project twist and distort to get their pork projects pushed through. In her study released Nov. 16, 2011 titled “FEDERAL INFRASTRUCTURE SPENDING: NEITHER A GOOD STIMULUS NOR A GOOD INVESTMENT.” (link below)
    “…nine out of ten public works projects come in over budget. 19 For rail, the average cost is 44.7 percent greater than the estimated cost at the time the decision is made.”
    “These cost overruns dramatically increase infrastructure spending. On average, U.S. cost-overruns reached $55 billion per year.21”
    “Unfortunately, studies have shown that project promoters routinely ignore, hide, or otherwise leave out important project costs and risks to make total costs appear lower.23 Researchers refer to this as the “planning fallacy” or the “optimism bias.” Scholars have also found that it can be politically rewarding to lie about the costs and benefits of a project. The data show that the political process is more likely to give funding to managers who underestimate the costs and overestimate the benefits. In other words, it is not the best projects that get implemented but the ones that look the best on paper.24”
    “In addition, inaccurate estimates of demand contribute to consistent underestimation of public projects: A study of 208 projects in 14 nations shows that 9 out of 10 rail projects overestimate the actual traffic.25 Moreover, 84 percent of rail-passenger forecasts are wrong by more than 20 percent. Thus, for rail, passenger traffic averages 51.4 percent less than estimated traffic.26 This means that there is a systematic tendency to overestimate rail revenues.”
    So if rail promoters can’t dazzle us with “planning fallacy” or the “optimism bias.” they try to baffle us with BS.
    link to study: http://mercatus.org/sites/default/files/publication/Federal%20Infrastructure%20Spending%20-%20Neither%20a%20Good%20Stimulus%20Nor%20a%20Good%20Investment.pdf

  3. I much like the transparency for money idea… I hope it spreads.

  4. Virginia’s Freedom of Information Act needs strengthening also. I have performed legal work for several Virginia school divisions over the years, including negotiating leases. Those leases are public documents and the rates, terms and conditions are available to the public. But many of the rates, terms and conditions of Phase I for Dulles Rail have been redacted. I’ve been told Dulles Transit Partners (a/k/a Bechtel) lobbied to get the exception. Something is wrong here. Transactions involving government revenues, expenses and investments need to be in the public domain. Even when Bechtel and other big companies are involved.

  5. You know, if Dulles Rail wasn’t so unbelievably bloated and overpriced, maybe financing might not be such an issue. What a concept! I keep pointing this out, and it keeps being pointedly ignored: The Rt 28 Dulles Rail station – you know, the one that the FTA July 3, 2011 White Paper said would cost $136 million, and then it was very quietly (thank you, news media) corrected to $82 million because they had counted the $53 million parking garage twice. Why is it so darn expensive? $82 million, when a Metro station in posh Fairfield, Connecticut costs $42.7 million – AFTER cost overruns… So, why is a Metro station in this ares twice as expensive, anyway? (Listens to crickets chirping.) No, there is no reason, except that this thing is a gigantic boondoggle, and a ripoff, as Virginia’s Attorney General once said. But neither the media, nor the People, seem to care, at all. So, as Franklin once said, the People get the government they deserve. Too bad I get it too.

    Let’s have transparency, sure… but reasonable cost is what we really need. The costs we are being handed now, are not reasonable at all. And we were handed a whopping $53 million blunder, and the news media simply covered it up. This whole thing makes me sick.

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