Maybe We Have Too Much Infrastructure

Not far from where I used to live, in New Jersey, a light rail line rumbles between Newark Penn Station and the much smaller Broad Street Station, on the other side of downtown. This line, about a mile long, opened in 2006, and it cost more than $200 million to build. It was projected to serve 13,300 riders a day by 2015. Actual ridership, though, is just a few hundred. You won’t have trouble finding a seat.

The Broad Street extension is an example of a problem people don’t much like to talk about: misguided infrastructure spending. We constantly hear complaints about inadequate infrastructure, from the archaic main terminal at LaGuardia to the all-day traffic jams at Chicago Circle, and armies of consultants roam the world helping justify yet more projects. The truth, though, is that a great deal of our existing infrastructure is poorly used, and taxpayers often are on the hook for new projects that don’t produce the expected returns.

This isn’t just an American problem. Last week, I was in Europe, where there has been massive investment in container ports to handle the extremely large vessels now coming on line. These ships carry the equivalent of 9,000 truck-size containers, and to accommodate them ports are deepening their channels, lengthening their wharves, expanding their storage areas, and installing bigger cranes. Every port wants the mega-ships to call. The ship lines that own these vessels, though, don’t want to stop in every port; they want their ships to spend as little time in port as possible. Moreover, as these giant ships replace smaller vessels, most ports will see fewer containerships, not more. The bottom line: Europe’s ports now have far more container-handling capacity than required. That overcapacity increases the ship lines’ ability to play one port off against another to force port charges down, making it even harder for port operators to recover the cost of their investments and increasing the likelihood that taxpayers will be forced to pay up.

Container ports are not the only place where there’s excess infrastructure. In the United States, several relatively new toll roads are attracting far less traffic than projected. Pittsburgh airport demolished one of its concourses after passenger numbers plummeted, and the near-empty terminals at Kansas City airport can be spooky. Japan’s high-speed trains are wonderful–but while some carry extremely heavy traffic, others appear to be rather underutilized. There seems to be a surplus of convention centers almost everywhere, and the world is full of stadiums that receive only occasional use.

So while there may be many places where today’s infrastructure is inadequate, claims of an infrastructure crisis deserve careful scrutiny. Often enough, users of infrastructure, such as transportation companies or sports teams, want governments to bear the risk of building facilities that the private sector may, or may not, choose to use. Governments have a hard time saying no to such demands: what politician wants to face accusations that his or her inaction caused a business to leave town? But building too much infrastructure may well leave tomorrow’s taxpayers facing the bill for today’s mistakes.

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