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A Single Delta Tunnel Will Still Sink Taxpayers

Monday December 19th, 2016   •   Posted by K. Lloyd Billingsley at 11:14am PST   •  

ca_waterway_mlGovernor Jerry Brown wants to drill two massive tunnels under the Sacramento-San Joaquin Delta and calls this project “a fundamental necessity of California’s current and future prosperity.” Now Ellen Hanak, director of the Public Policy Institute of California’s Water Policy Center, and PPIC fellows Brian Gray and Jeffrey Mount want the state to drill only one tunnel. This “grand compromise,” they say, will manage water effectively, protect endangered species, preserve water quality, and “greatly reduce the project’s cost.” Alas, the PPIC crew fails to provide figures for the total cost of a single tunnel.

As we noted, according to Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific, the tunnels are a financial bust. According to his estimate, they will provide “only 23 cents of benefits for each dollar of cost.” Construction costs, estimated at $16 billion, “are still more than 2.5 times larger than benefits.” Therefore the project “is not economically justified under both the base and optimistic scenarios.”

If Hanak et al. believe one tunnel would cut the costs in half, to about $8 billion, they don’t say so. As it happens, projects of this magnitude tend to encounter costly problems. Seattle’s $3.14 billion Highway 99 viaduct, for example, remains plagued with delays and cost overruns. As Mike Lindblom explains in the Seattle Times, “Its final costs remain an open question.” The original estimate of Boston’s seven-mile Big Dig was $2.4 billion, but it wound up costing $14.8 billion, with final costs in the range of $21 billion by the time the final bond is paid off in 2038.

With government everything always costs more and takes longer. The new span of the Bay Bridge, for example, was $5 billion over cost, years late, and still plagued with safety issues. In government tunnel vision, however, there is always money for everything. One Delta tunnel or two, this is a legacy project for a reactionary recurring governor who is talking about launching satellites. Long after this big spender leaves office, California taxpayers, and their children, will be stuck with the costs.

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December 2016