With Boston’s Big Dig highway project in the news, a brief review of the project’s finances is in order.

As the project was getting started in 1985, government officials claimed that it would cost $2.6 billion and be completed by 1998. The cost ultimately ballooned to $14.6 billion and new problems continue to arise as the project finally nears completion. (The federal share of the project’s cost was $8.5 billion). In 2004, hundreds of leaks were found in the project, which added millions of dollars in taxpayer costs. And in recent weeks, parts of new road tunnel ceilings have collapsed. 

Raphael Lewis and Sean Murphy wrote an excellent Boston Globe series a couple of years ago revealing how the Big Dig had been grossly mismanaged. A key problem was that Massachusetts repeatedly bailed out bungling Big Dig contractors instead of demanding accountability. Contractors were essentially rewarded for delays and overruns with added cash and guaranteed profits.

When federal money is involved, state and local profligacy and corruption are usually the result. For background on the general problem of cost overruns on federally funded projects, see my compilation of evidence here.