As BATWG has reported previously, in the Bay Region transportation projects often advance based strictly on politics. Totally absent from the mix are sound engineering and competent financial analysis. The Oakland Airport Connector (OAC) is a case in point. Here’s a preliminary report:
The capital cost of the OAC was $484 million. In order to provide a valid comparison between costs and revenues, we annualized the capitol cost of the project. Say you borrowed $484 million at 3.0% interest and were required to pay it back in 30 years. To do this you would need to send your lender a check for $24.7 million every year for 30 years. In other words a 30 year series of payments of $24.7 million a year is equivalent to an initial investment of $484 million at 3%.
BART has estimated that in the first year the OAC operating cost would total $13.5 million and that OAC fare collections would total about $6.5 million. Adding the annualized capital cost of $24.7 to the operating cost of $13.5 million and subtracting the $6.5 million in fares leaves the tax payers with a $31.7 million yearly subsidy to pay.
BART estimates a OAC ridership of 3,250 boardings a day, equal to a bit under 1,200,000 boardings a year.
$31,700,000 divided by 1,200,000 has the tax payers shelling out $26.4. This means that for his or her $6 fare, the rider is provided by the tax payers with a $32.4 ride. No wonder OAC riders are pleased.
Unfortunately this outrageously high subsidy is all too typical of the highway and other transportation infrastructure projects that are publicly financed in the Bay Area. The granddaddy of them all is the Bay Bridge East Span, up from the original stated price of $1,500 million in 1997 to today’s price of more than $6,400 million and rising. And there’s the Presidio Freeway replacement of Doyle Drive, up from its 2003 estimate of $420 million to over $2,000 million, and San Francisco’s Central Subway, up from $647 million in 2003 to today’s cost which is reportedly approaching $2,000 million.
Given the gross waste and misuse of public transportation money typified by the above examples, it’s no wonder that Bay Region public transit use has stagnated while its traffic congestion just gets worse.
The Oakland Airport Connector, by the way, replaced an efficient Airport shuttle bus operation that paid for itself and consequently cost the taxpayers nothing at all.