The Real Cost of the Wall

I haven’t blogged in a while, but with a government shutdown over the issue of a border wall I’ve seen more political nonsense than usual float through the media. I feel compelled to add my comments about the wall. This is coming from someone with vast experience dealing with congressional funding and capital construction. You might detect just a wee bit of sarcasm.

This was whipped up in a hurry so it’s not as articulate as I would like it to be, but you will get the point.

I can tell you from personal experience, any politically motivated “estimate” for a construction project bears no resemblance to reality, whether you’re talking about a $25 billion wall, a $5 billion partial wall (this is the hook whereby good money then gets thrown after bad so as not to admit that the first $5B was a mistake.) or a mere $1 million of taxpayer money committed to a questionable civic improvement project.

Here’s the way it works: The White House needs an estimate so the WH liaison calls one of the construction agencies such as the Army Corps of Engineers, GSA, VA, DOD or whomever the WH thinks will do the job. Within hours the request filters from the agency head to a local technical person who has a gun to his head and is told to come up with a “ballpark” estimate for planning purposes but keep it no higher than x dollars. “Get back to us in an hour so the president can make a statement.” The estimate then becomes gospel.

Even if the ballpark – now committed – estimate of hard costs has any semblance of accuracy, which it will not, it is mere chump change compared to the real cost of the project. Any project.

Likely not included will be such niceties as:

  • Staff time of the thousands of people needed to administer the project, during construction and in perpetuity.
  • Cost of environmental studies and mitigation.
  • Design costs. I would guess that design is factored into the original estimate but changes as a result of the need to mitigate, per above, or satisfy stakeholders, do not come cheap.
  • Cost of money. Since government projects are funded directly by Congress estimates may conveniently omit construction period interest, yet the appropriations come from borrowed funds. Each time the Federal Reserve ups the rate the interest costs rise exponentially. Add billions to the estimate because the project will no doubt take years longer than the original plan.
  • Land acquisition. I see a few thousand parcels, mostly by condemnation because property owners will quickly learn how to play this game. This is the USA and there are laws to protect citizens (and nopn-citizens) from unjust government acquisition or unfair compensation.

Last but far from least will be the costs of never ending claims and litigation. Construction, community activists, environmentalist wanting to protect a rare species of the Rio Grande bass, etc. etc. It will be a money grab.

Oh, yes. One more thing. As everyone knows, getting anything through Congress requires give and take. There is no way to estimate the cost of additional useless projects which will be generated in order to buy votes for approval of the wall.

Not a pretty picture, but unfortunately this is how it works.

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