The Silver Line to Dulles: no gold here

Not all that glitters is Silver

“Silver and gold” sounds like an appropriate theme at Holiday time. It’s a theme not limited to listening to Burl Ives singing on the soundtrack to “Rudolph the Red-Nose Reindeer”. Plenty of Silver and Gold have been made on infrastructure around the world, with year-end dividends in investors’ stockings by the fireplace. One place, though, where Silver is definitely not turning to Gold is Washington DC, with the city’s Silver Line metro extension. In this update, we’ll do our best to find some holiday cheer about this important but unpromising piece of infrastructure.

For residents of Washington and Northern Virginia, and even more so for visitors to the Nation’s Capital arriving by air, the Silver Line originally seemed like a very welcome gift, even if overdue. Aimed at connecting by rail Washington’s Dulles Airport to the city and the area’s metro system, extending the (then) highly-regarded Washington Metro subway, the Silver Line’s planning was launched over 15 years ago (rail service to Dulles Airport had been envisaged back in the 1970s, but postponed then to an indefinite date).

For infrastructure planners and investors, the Silver Line is also a big deal. The originally projected costs of the Silver Line amounted to $5.6 billion, $2.7 billion of which for the still under construction Phase II. The project is structured as a PPP, or Public-Private Partnership, with governments providing 51% of costs (the US Government just under $1B, and state and county governments $1.8B), and “users” funding the balance. The “users” funding was unusually structured, with the “users” not being the users of the Silver Line itself (which would normally be classed as “users”), but rather users of the parallel Dulles Toll Road, though toll surcharges running already a decade. These numbers make it one of the United States’ biggest infrastructure projects, and one of the largest PPPs on record.

The first phase of the Line, running from Reston, Virginia, to the existing Orange Line and from there into downtown Washington, was completed at long last and service opened to great fanfare in July 2014. Ridership has been limited and below projections, as many potential users awaited the “imminent” extension of the Silver Line through a Phase II running from Reston to the airport – and now beyond Dulles Airport to stations in Ashburn and “Cloud City,” where many internet servers have located. At the Phase I service launch, sometime early calendar year 2018 was announced as the “end of the line,” and the long-awaited conclusion of the complete Silver Line’s construction. For those who have flown into Washington, waited for immigration and customs lines and baggage, only to stand in long lines waiting for taxis from Dulles at peak times, the Silver Line could not come too soon.

Only it’s not coming soon. Already 13 months behind schedule, the Silver Line announced this month… yet another problem.

In 2015, not long after Phase I started operation and there was still optimism about the whole project, the Silver Line experienced its first major setback. Cracks were found on girders supporting tracks near the airport… which had not even been used yet! Not a good start. Then in early 2018, the next major problem arose: this time the issue was substandard quality of concrete being used at the new stations. Replacement generated more costs and delays, and embarrassment which continues, with last month a subcontractor accused of faking records having been sentenced to prison. And now the latest problem: it appears that hundreds of concrete ties being used for the rail line are flawed. The ties have been discovered to be thicker in the middle than on the ends, creating potential for imbalances in train cars passing over them. Again not good. Even worse, the problem has reportedly been known for several months, and there seems to not yet be any agreed solution. So, no Phase II opening in 2018, and now probably not in 2019 either, or maybe not even 2020….

Cost increases associated with the first year of delay in Phase II were announced as being $100 million, and will certainly be far higher than this before construction is complete. No revised funding plan has been publicly announced.

This news is not only bad for Washington area commuters and airport arrivals. For backers around the world of metrorail systems, of mass transit, and of transport PPPs, this is grim news. The Silver Line has been a flagship project not just in the DC area, but nationwide, and globally among subway projects. Its travails will have a chilling effect on planners, voters, and infrastructure financiers.

What lessons can be drawn here? The already obvious lesson is that rail systems are difficult to build. Subways are notoriously prone to delays and major cost overruns, and in that sense the Washington Silver Line’s problems are not “new.” Yet the implications now may be bigger. As Infrastructure Ideas has previously discussed, we are now in an era where new urban transport technologies are emerging, posing new opportunities for users and new questions for infrastructure planners. And while many of the new transport modes benefit from rapidly declining costs of technology, traditional rail transport does not. Laying down concrete and steel comes with the same kind of risks that it has, well for over a century, and there are no fundamental changes on the horizon there. So relative to new options, rail is getting more expensive for users and financiers, and also looking much riskier for planners. It is an analogous situation to the transformation we have been seeing for several years now in energy infrastructure, where traditional modes of generating electricity (oil& gas, coal and hydropower) are getting progressively more and more expensive relative to new modes (wind and solar) which benefit from plunging technology costs.

A second lesson doesn’t look so obvious, yet it is nevertheless. And this is that, with all the Silver Line’s problems, potential users continue to wait for it. A recent Washington Post review of the first full year of congestion pricing (also covered by Infrastructure Ideas) on Interstate 66, from Northern Virginia into Washington, noted that with frequent peak time $20-30 one-way tolls, many drivers still eagerly await better mass transit options to go from Fairfax and Loudoun counties into Washington. Which points to the underlying situation faced by Washington, and by so many cities across the globe: urban populations continue to grow and more people continue to need to get into cities and around them. And congestion on roads keeps getting worse. The demand for transport infrastructure continues to grow, whatever the problems encountered by infrastructure projects.

A third lesson is that the mix of mass transit approaches to urban transportation is likely to keep changing. The Washington Silver Line’s problems probably reflect fairly accurately what many planners see when they look at urban rail: potential to move large numbers of people, but high risks of major delays and cost overruns. Already we can see across Emerging Markets that planners are tilting much more heavily towards BRT and bus-based systems than rail. This tilt will continue. And we can project that several new features will start appearing more regularly: deployment of new EV, and in some case AV technologies (especially electric buses); initiatives to connect more consistently to last-mile technology systems such as e-scooters and bike-share networks; and alliances with ride-share companies such as Uber and Lyft. Infrastructure Ideas will delve further into the implications of this evolution in upcoming columns. Rail systems will not go away. But stand-alone, traditional subway systems, ignoring new technologies and competing/ complementary transport options – as the Silver Line largely was– are increasingly a thing of the past.

Lest this gloomy Silver Line update make our readers think of Infrastructure Ideas as a Grinch, we’ll end the year soon on a more upbeat note, with a Holiday column on Santa Claus and the world’s (future) biggest infrastructure company.

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