Cost overruns on rail budgets due to knowledge loss?

June 13, 2009

Article in today’s The Age from Melbourne highlights the exorbitant cost of Melbourne’s first heavy rail extensions for the past 70 years.  Interestingly, one paragraph notes that part of this cost increase could be due to the loss of knowledge caused by the lack of capital expenditure on railways for the past 20 years.

Dube says the Department of Transport has effectively not planned or built any new rail services since the late-1980s when the City Loop was completed. This means there is no expertise in accurately costing an extension to the passenger rail system. Furthermore, the costs of building heavy rail have skyrocketed — far more than inflation. “There’s been very little work done in the railways (since the mid-1980s) … so for 15 years there’s been a hiatus of capital expenditure in the railways and because of that vacuum, the only knowledge people had of what things cost was anchored in the 1970s and ’80s.

This reminds me of another incident described by Patrick Lambe at a workshop in Dubai this week where the discussion moved to how organisations lose knowledge if they do not continue to exercise the knowledge in the people.  You can have lots of wonderful documentation that lists how to do things but that it is still important to have the knowledge of the people who wrote those documents to describe the context and translate that knowledge into meaningful action.  In this case, Patrick was describing the situation of NASA when they were needing to rediscover their knowledge of large booster rockets that can propel material outside the solar system.

For the situation of heavy rail in Melbourne, it clearly portrays the disproportionate investments over the past 30 years in the road network as compared to rail networks.  Part of the exorbitant cost estimate may be due to the need to rebuild much of this knowledge lost over the past few decades.