I asked Steve Kasower, my comrade-in-bomb-throwing and author of a study that estimated this tunnel would cost $54 billion, what he thought of this estimate, i.e., "Steve, does this mean you were wrong or they are lying?"
Steve told me this:
I am not sure that it is a lie per se. I suspect that it is politically motivated since Lester Snow had already said it was about $10 billion in response to my paper and shortly thereafter. Upon what basis has the estimate been based? My inflation of the Chunnel was from their actual $21 Billion in 1994 cost. I inflated at 3% annually (very conservative through the time period from 1994). So if DWR could build the nearly identical tunnel for $10 billion in 2009 it suggests that the Brits and the French radically overpaid for their tunnel. DWR in today’s dollars is over half the cost of the Chunnel in 1994 dollars and less than 1/3 the cost in today’s dollars. How is it that DWR can be so economical? Let’s ask some basic questions:Steve's Bottom Line: It is a lie!**
- Is there some radically different strata that will be encountered under the Delta compared to Chunnel that would account for such cost savings? Show us the studies.
- Has the technology advanced so radically in tunnel boring that we can enjoy such a major savings? Show us the data.
- Is the difference between the size of the Delta tunnel and the Chunnel contributing to such a major difference? Show us the incremental basis for this determination.
- That is about all I can think of for radical cost differential. Certainly steel, concrete, labor, and energy all cost more today than in 1994 so what gives?
DZ's Bottom Line: Steve was wrong -- see comments :)
* The Colorado River Aqueduct (CRA) has a 1,500 cfs capacity, which allows it to carry 1.3 maf of water/year from the river to SoCal.
** Section 3.3.1 of my dissertation:
MET [Metropolitan Water District of SoCal] based its demand calculation on the "habitable (not inhabited) area of the South Coastal Basin" and made no provision for the effect of prices. Milliman claims that MET engineers started with a CRA capacity of 1,500 cfs and projected a demand that would require that much water. After building the CRA, MET set prices to cover the cost of building and operating the CRA but ignored the possibility that demand would not exist at those prices. Given the average cost of Colorado River water, even on the basis of full capacity operation, is roughly three to five times the cost of existing water supplies and a reduction in demand due to high rainfall, actual sales missed projected sales by an order of magnitude.This quotation explains how engineers gave a wrong, but political, answer to a question. The result (too much, and subsidized, water) drove SoCal's post WWII-sprawl.