Today’s must-read
Wednesday, May 21, 2025 - Posted by Isabel Miller
* A City That Works in March…
In early January, the Chicago Transit Authority secured $1.9B in funding from the Federal Transit Administration’s New Starts grants program funded by the Bipartisan Infrastructure Law (BIL). This award is one of the largest grants in Federal Transit Administration (FTA) history.
The 5.5-mile project will bring the Red Line down to 130th Street with four new stations at 103rd, 111th, Michigan/115th, and 130th, plus a multi-story parking lot, a new rail yard, and a heavy-rail maintenance facility north of the 130th street terminal. In total, it is projected to cost $5.75B. […]
First, this project is disastrously expensive. The [Red Line Extension (RLE)] will be the most expensive transit project per mile and most expensive per new passenger gained in North American history.
Second, CTA’s cost estimates have skyrocketed since its initial grant application to the FTA. This means that FTA’s capital dollars are covering much less of this project than originally envisioned. That comes with a significant opportunity cost for other disadvantaged communities in Chicago. It also means the project is backed by a questionable financing structure that ensures CTA will be saddled with loads of debt service for the project until the 2040s. […]
When the CTA first pitched this project to the FTA in 2009, the original cost estimate to the FTA was only $1.09B (not adjusted for inflation). The estimated cost remained at $1.09B until 2016, when the price doubled to $2.3B. In 2022, it shot up to $3.6B, which is partially attributed to inflation and rising construction costs (though those increases were not to the tune of $1.3B).
After the CTA received notice in 2023 that it was in line for $1.9B in federal funding, the cost estimates for the project continued to rise and quickly. In March 2024 it was $3.6B. In July it was $3.9B. In August, it was $4.3B, then 12 days later it was $5.3B and finally in October, it reached $5.75B. A 60% increase in seven months.
* Crain’s this morning…
Under a deal crafted in the final months of the Biden administration, the CTA promised to pay $2.25 billion out of its own pocket, mostly in the form of bonds that will take decades to pay off — this at a time when the CTA says a funding shortfall could force it to slash service 40% next year. Some transportation experts fear CTA will be so burdened by debt that it will have difficulty undertaking essential maintenance, in particular reconstruction of the Blue Line Forest Park branch, which runs 75% of its trackage in slow zones. […]
“The staggering budget overrun, with a billion-dollar cost per mile, puts the Red Line Extension on a par with the most expensive transit projects in the world,” said state Rep. Kam Buckner, a leader in negotiations on transit reform legislation now under consideration by the Illinois General Assembly. “We should have had a conversation a long time ago on how to serve the South Side better for less, with things that would have been more cost-effective solutions.” […]
The RLE’s price tag is $2 billion higher than it should have been based on comparable U.S. projects, a Crain’s analysis shows. The $1 billion RLE cost per mile of above-ground rail line is what Los Angeles is spending per mile of subway — generally at least twice as expensive as elevated. As the chart below shows, a reasonable cost for the RLE would have been $3.6 billion, the announced price until last August, not $5.75 billion. […]
While documents indicate that $317 million of the $1.7 billion cost runup was due to rising interest rates, the bulk of the hike was professional services — engineering, program management, and the like. Initially budgeted at $280 million, this cost came in at $1.24 billion, a difference of nearly a billion dollars.
Go read the rest and discuss.
- Larry Bowa Jr. - Wednesday, May 21, 25 @ 10:34 am:
“it will have difficulty undertaking essential maintenance”
CTA has had difficulty executing essential maintenance and human transport tasks since I started riding it daily in 1998. The message needs to be more direct: this means the CTA will go from its current semi-reliable status to not functional at all.
- Chicagonk - Wednesday, May 21, 25 @ 10:45 am:
Part of the problem is that there aren’t many contractors that can jump through all the hoops (or have the expertise needed) to build the extension. The CTA also outsources everything despite having people in house that should be able to do the job. I’m sure there are a lot of consultants getting paid handsomely on this.
- Homebody - Wednesday, May 21, 25 @ 10:49 am:
America at all levels has seemingly taken every step possible to make major infrastructure projects wildly more expensive than the rest of the developed world, for unclear benefit.
Heck, Rome is expanding their underground subway system, and it has to keep getting stopped for archeological work to occur, and it still is coming out cheaper than any US project ever does.
- Scooter - Wednesday, May 21, 25 @ 10:53 am:
“The CTA also outsources everything despite having people in house that should be able to do the job. I’m sure there are a lot of consultants getting paid handsomely on this.”
This. CTA (like the rest of the RTA) has become addicted to hiring consulting firms for a lot of functions which should be handled in-house. Something like 1/3rd of the personnel on-hand on the Infrastructure floor at 567 W Lake are consultants. And the agency pays a premium for them to be there.
- RNUG - Wednesday, May 21, 25 @ 11:03 am:
In addition to all the consultants / experts getting a piece of the pie, you can figure 10% of the total will disappear in the form of overhead “management fees” just because it is Chicago.
- Three Dimensional Checkers - Wednesday, May 21, 25 @ 11:14 am:
There are problems with transit agencies having to outsource professional services for large projects, but that is insane. As the Crains article notes, it is no where near compatible with the Red-Purple Modernization project. Someone should really investigate exactly what happen because that really seems like an absurd number.
Rep. Buckner is correct that integrating the Metra Electric Line with CTA’s services could be more cost effective. There was a proposal under MLL’s administration to make the fares similar which fell apart because of fiefdom thinking, IIRC.
- Joseph M - Wednesday, May 21, 25 @ 11:17 am:
Meanwhile, this week’s WaPo headline regarding DC’s WMATA trains: “Local leaders say they’ll pay $5.6 billion to automate Metro”
Chicago/IL deserves better for the price we’re paying.
- Sue - Wednesday, May 21, 25 @ 11:21 am:
Another proud achievement for JB’s campaign adds- the Governor who presided over the biggest cost overruns on a public infrastructure project in the history of the world- sure- lets make JB our president
- Jack in Chatham - Wednesday, May 21, 25 @ 11:23 am:
I have friends in the Trades. They hate government jobs because half the foremen and ten percent of the Laborers do not show up for work and are part of the job “padding”. This leads to slow progress as there are not enough Foremen to read the Blue prints, take the measure, mark the spot and get men going. A lot of unnecessary standing around and head scratching.
- Excitable Boy - Wednesday, May 21, 25 @ 11:26 am:
- Something like 1/3rd of the personnel on-hand on the Infrastructure floor at 567 W Lake are consultants. And the agency pays a premium for them to be there. -
It goes beyond their fees. Consultants have no stake in the final product and do as little engineering as possible.
The designs are incomplete and all of the risk and unknowns is pushed to the contractors bidding the work. That risk is what drives the cost through the roof.
Good engineering eliminates risk. This problem isn’t limited to transit agencies, it’s the same in all public and private sector infrastructure projects I’m involved in.
- Rick - Wednesday, May 21, 25 @ 11:28 am:
A complete and total boondoggle. And it’s part and parcel of the decentralized, disjointed transit agency mess. Metra has existing underused rail lines running throughout the south side. They could have been refurbished and service could have been increased at much less cost. But because the transit agencies are competitive rather than complimentary, that didn’t happen.
- GoneFishing - Wednesday, May 21, 25 @ 11:30 am:
I work for a major private corporation and hiring consultants for project management and other jobs happens a lot. We get tasked to cut costs (jobs) and then you have to pay for a consultant to do basic tasks. They like to look at heads just not cost.
- Michael McLean - Wednesday, May 21, 25 @ 11:47 am:
Could have increased Metra Electric frequency, and added new bus service to get folks to those stations. That would have been 90% cheaper.
- btowntruth from forgottonia - Wednesday, May 21, 25 @ 11:49 am:
“half the foremen and ten percent of the Laborers do not show up for work and are part of the job “padding”.”
Cool story,bro.
Name the specific jobs this happens/happened on and the contractors.
- very old soil - Wednesday, May 21, 25 @ 11:57 am:
$5.75 billion would buy a lot of taxi or uber trips.
- Retired School Board Member - Wednesday, May 21, 25 @ 11:58 am:
“…the bulk of the hike was professional services — engineering, program management, and the like. Initially budgeted at $280 million, this cost came in at $1.24 billion, a difference of nearly a billion dollars.”
This is why we can’t have nice things in Illinois. And I love my state. But for the love of all that is beautiful in the world, can we stop empowering the private sector to rob us blind at the expense of underserved communities? It’s never, ever been fair that the far south side doesn’t have access to affordable rail service and it has had devastating economic results. But as soon the government recognizes the need to invest in the south side, apparently here come the private sector vultures to enrich themselves at the expense of taxpayers. Where is the accountability?
(Let us not forget about the same issue with Cook County tech upgrade that was contracted out to Tyler for 30 Million that now has a 200 Mill price tag. I would like to see the GA do something about these private sector companies flagrant disregard for taxpayer dollars.
- Excitable Boy - Wednesday, May 21, 25 @ 12:15 pm:
- I have friends in the Trades. They hate government jobs because half the foremen and ten percent of the Laborers do not show up for work and are part of the job “padding”. -
No you don’t, and that isn’t a real story.
- Just Me 2 - Wednesday, May 21, 25 @ 12:21 pm:
I’ve never understood the need for the CTA redline extension when there is a Metra line just a few blocks away. Maybe if Metra and CTA were better coordinated the south side would get the transit they hope to get with this incredibly expensive project.
- jolietj - Wednesday, May 21, 25 @ 12:21 pm:
Insane. Hopefully transit bill will address the situation.
- Dotnonymous x - Wednesday, May 21, 25 @ 12:41 pm:
-I have friends in the Trades. They hate government jobs because half the foremen and ten percent of the Laborers do not show up for work and are part of the job “padding”. -
You are lying through your teeth.
- 47th Ward - Wednesday, May 21, 25 @ 12:45 pm:
===you can figure 10% of the total will disappear in the form of overhead “management fees” just because it is Chicago.===
Maybe. Or maybe prevailing wage in the Chicago area is a lot higher than it is in your neck of the woods. I’m guessing 10% higher is a good estimate.
- don the legend - Wednesday, May 21, 25 @ 12:47 pm:
This and all these huge capital projects appear closely related to The Esplanade and the Museum of Science and Trucking.
- ChicagoBars - Wednesday, May 21, 25 @ 12:54 pm:
I have to believe former CTA President Dorval Carter and his highly touted infrastructure development excellence had a real good idea of the actual costs and downplayed them (and that is being kind) because this Red Line Extension TIF was sold by CTA and the Building Trades as about $2B in Transit TIF money getting a near 100% Federal match…and City Council wasn’t real enthusiastic about creating that TIF. RLE Transit TIF would have likely been DOA if the true costs had been more accurately/truthfully projected by the CTA construction-industrial complex up front.
This 2022 Cook County Transit TIF explainer has been pretty good resource btw. https://www.cookcountyclerkil.gov/sites/default/files/pdfs/2022%20Transit%20TIF%20Fact%20Sheet.pdf
- sim1 - Wednesday, May 21, 25 @ 1:26 pm:
Very compelling points about the apparent costs of public agencies outsourcing expertise to contractors and consultants. In other countries that are known for more efficiently and effectively developing modern infrastructure there is far greater use of institutional expertise in project management and critical decision-making than consultants and contractors, and public agency staffing levels in these countries reflect that priority. But it sure seems to be difficult for elected officials here to convincingly make the argument that a key part of solving a public agency’s problems may actually be to hire (and pay for) more staff expertise at that agency. Some of this boils down to the self-fulfilling prophesy much of our national sentiment has been in the grip of for most of my life: the Reaganite belief that “government is always the problem and never the solution” ensures that government will always be the problem and never the solution.
- JS Mill - Wednesday, May 21, 25 @ 1:46 pm:
=In other countries that are known for more efficiently and effectively developing modern infrastructure there is far greater use of institutional expertise=
As republicans about that. They refer to those people pejoratively as unelected bureaucrats.