If you are going to change your position, then you should have said so.  Instead you posted "I am at the point where I figure that so much of it is built already that I say just spend the extra money and finished," then contradicted yourself with "It isn't just the case of we spent it, we might as well continue."


Now you want to discuss the analysis of whether it's cost effective to continue the project?  Why?  The City hasn't bothered to do that, so why waste our time doing so?

Disclaimer: I am moderately intoxicated while I am replying to this message.

My personal opinion is that we should continue. Yes it is going to cost way more than originally planned but I think that the benefits of having a working system as a high cost outweigh having dumped money into a system with absolutely no benefit.

Disclaimer: I am moderately intoxicated while I am replying to this message.

My personal opinion is that we should continue. Yes it is going to cost way more than originally planned but I think that the benefits of having a working system as a high cost outweigh having dumped money into a system with absolutely no benefit.

Unless you have one of your police buddies administer a BAC test then post the video, you're just trying to excuse the same contradictory BS you post on here ad infinitum!   

Unless you have one of your police buddies administer a BAC test then post the video, you're just trying to excuse the same contradictory BS you post on here ad infinitum!   

I was not contradictory, What I was saying is that having spent the money is not in and of itself justification to keep on spending the money. We have to take the whole picture into account.

Disclaimer: I am moderately intoxicated while I am replying to this message.

My personal opinion is that we should continue. Yes it is going to cost way more than originally planned but I think that the benefits of having a working system as a high cost outweigh having dumped money into a system with absolutely no benefit.

That's the very definition of falling for the "sunk cost fallacy"!!

Can you enumerate the benefits and then compare that with the additional costs?  I don't think the benefits justified the original incomplete cost estimate.  Now, without any new benefits, you think more money is justified? 

Let me this explain the concept simply enough that even you get it:

http://www.lifehack.org/articles/communication/how-the-sunk-cost-fallacy-makes-you-act-stupid.html

How the Sunk Cost Fallacy Makes You Act Stupid

In economics, a sunk cost is any past cost that has already been paid and cannot be recovered. For example, a business may have invested a million dollars into new hardware. This money is now gone and cannot be recovered, so it shouldn’t figure into the business’s decision making process.

Or, let’s say you buy tickets to a concert. On the day of the event, you catch a cold. Even though you are sick, you decide to go to the concert because otherwise “you would have wasted your money”.

Boom! You just fell for the sunk cost fallacy.

Sure, you spent the money already. But you can’t get it back. If you aren’t going to have a good time at the concert, you only make your life worse by going.

In my previous job, I did work on FTA projects and yes, many times the thinking is "once the train gets momentum, it will be difficult/impossible to stop". 

That said, I am surprised the FTA isn't making more noise about this.  At least that I've heard about, which isn't saying much though since I've been out of that kind of work for a while.  I guess they somehow set their $1.5 Bil (or something like that) into it and said "you're on your own after that".  I thought the other highway projects that I worked on wasn't like that, but those projects actually came in under the allotted funding amount, even with unforeseen sight condition type mods. 

Someone mentioned utilities being one of the main reasons for change orders so far.  My perception/thoughts (no REAL proof) is that if they've had that much unforeseen sight condition type change orders in the segments so far, they'll be MUCH worse as they approach town. 

That's the very definition of falling for the "sunk cost fallacy"!!

Can you enumerate the benefits and then compare that with the additional costs?  I don't think the benefits justified the original incomplete cost estimate.  Now, without any new benefits, you think more money is justified? 

Let me this explain the concept simply enough that even you get it:

http://www.lifehack.org/articles/communication/how-the-sunk-cost-fallacy-makes-you-act-stupid.html

No, I do not have a $ cost benefit analysis. I am forming a general opinion. I think we need a rail system and I would rather shell out more money and finish the project than leave the project ugly and half finished.

No, I do not have a $ cost benefit analysis. I am forming a general opinion. I think we need a rail system and I would rather shell out more money and finish the project than leave the project ugly and half finished.

As I said, that's the kind of illogical thinking the politicians and unions bank on.  "Just finish da buggah.  I don't care how much it costs now, I just wanna be able ride 'em before I die!"

That kind of thinking leads to doing stupid things.  If it's going to take 3 times the original cost to finish, and that is if we stop at Middle Street, not Ala Moana, the cost will never be justified.  That's why the city basically lied when they got the last increase in funding.  They knew that wouldn't finish the rail, but they figure it's like boiling the proverbial frog.  By the time you finish and it hits $18B, it'll be too late -- COOKED!

Why do they do this time after time?  Because they can!  People who don't care what it costs keep the gov't and the unions employed in spite of failure after failure.

It's all part of their plan.

As I said, that's the kind of illogical thinking the politicians and unions bank on.  "Just finish da buggah.  I don't care how much it costs now, I just wanna be able ride 'em before I die!"

That kind of thinking leads to doing stupid things.  If it's going to take 3 times the original cost to finish, and that is if we stop at Middle Street, not Ala Moana, the cost will never be justified.  That's why the city basically lied when they got the last increase in funding.  They knew that wouldn't finish the rail, but they figure it's like boiling the proverbial frog.  By the time you finish and it hits $18B, it'll be too late -- COOKED!

Why do they do this time after time?  Because they can!  People who don't care what it costs keep the gov't and the unions employed in spite of failure after failure.

It's all part of their plan.

Do you think they would leave it up as an eye sore and liability or would they approve more money to have it all removed?

Don't get me wrong, I don't think they should have a blank check, but it is the case that we either cut our loses and gain no benefit from what was spent or we keep going and end up with the benefit of a working rail system. Whether a working rail system is worth the additional expenditure is a valid question in all of that of course.

Do you think they would leave it up as an eye sore and liability or would they approve more money to have it all removed?

Don't get me wrong, I don't think they should have a blank check, but it is the case that we either cut our loses and gain no benefit from what was spent or we keep going and end up with the benefit of a working rail system. Whether a working rail system is worth the additional expenditure is a valid question in all of that of course.

I'm going to say this as plainly as I can .... the money you keep saying you want to get some benefit from --- IT IS GONE.  SPENT.  YOU WILL NEVER SEE IT AGAIN.

Remember the Super Ferry?  How much was spent on that?  In the end, the company that bought the ferries sold them and cut their losses.   You have to decide on what's right going forward financially.  Sometimes that means diverting those limited resources (money) to projects that have the best chance to succeed.

What about the multimillion dollar health connector website and exchange?  More sunk costs.  They aren't pouring more money into a failed program to "hold onto" the money they spent so it's not wasted.  It's spent.  gone. never coming back.  No company worth anything makes decisions using sunk costs.  It's something they all have to learn to do.  Financially, you have to decide if money already spent represents a viable investment going forward or not.  You can't "hoard" bad projects for fear of "losing" the money it already cost you.  Bad logic!!

As for the rail project, there has been benefit.  Construction, shipping, and all kinds of other companies' employees have been paying their mortgages and going to Vegas vacations because the project made jobs.

That money is spent.  Any benefit that money would bring has been realized already.  In reality, it's the money we are GOING TO SPEND FROM THIS POINT FORWARD that would bring the rail to completion.  If we stop now, no rail trains will be carrying people.  That's what the current, what, $10B has given us?  If completion costs another $5B and stops short, that's the cost you have to weigh against any benefit of spending that money.

You can only control what we have yet to spend.  What has been spent so far is an over budget failure.  Adding more money will not erase that.  You have to ask, what ELSE can we spend that $5B on that will give us some positive results.  Maybe you want the GET to be raised a couple more times so we can keep funding this "useful project"?  Better yet, we could have just used the money to pay companies to allow people to work from home.  Would have been cheaper for about 20 years, and fewer cars on the road.  As the concept became mainstream, the incentives wouldn't be needed after some time.

I guess in Hawaii, the odds are, anything we try to do for over a billion bucks is going to end badly .... therefore one failed, over budget fiasco is as good as the next.  Sad we are forced to think that way. 

I'm going to say this as plainly as I can .... the money you keep saying you want to get some benefit from --- IT IS GONE.  SPENT.  YOU WILL NEVER SEE IT AGAIN.

If the rail is finished then you would see that money in terms of a functioning rail system. You are right, you wont "get the money back" but you will have something to show for it. Stop now and we have nothing to show for it. Yes I realize that we have to evaluate whether the extra money is worth it or not. I believe that it may be worth it but I am waiting to see what the latest round of estimates and investigations reveal. Maybe some smart person can get it built without going significantly higher. We may have to agree to disagree there.

Sooner or later we are going to need some mass transit system to be implemented. Maybe, like others have said, a bus system with dedicated lanes will be the eventual outcome.

If the rail is finished then you would see that money in terms of a functioning rail system. You are right, you wont "get the money back" but you will have something to show for it. Stop now and we have nothing to show for it. Yes I realize that we have to evaluate whether the extra money is worth it or not. I believe that it may be worth it but I am waiting to see what the latest round of estimates and investigations reveal. Maybe some smart person can get it built without going significantly higher. We may have to agree to disagree there.

Sooner or later we are going to need some mass transit system to be implemented. Maybe, like others have said, a bus system with dedicated lanes will be the eventual outcome.

No, if that were true, all projects would be black holes for cash until they are finished.  I understand you can't wrap your head around this concept, because it goes against your "logical" thinking and "simplistic" thought processes.  I predicted that.

If you don't get it, then I can't help you.  Try doing some reading, I know Google is your friend.  Maybe someone can get you to see the light.

In the meantime, continuing to try and push your incorrect  conclusions will not change the situation.  Trust me when I say the sunk cost fallacy exists, and you are living proof!!

 

Eyeeatingfish, the sunk cost fallacy / concept is taught in business school and is hard for people to grasp.

In business school, you are taught to weight cost vs benefit. 

As someone pointed out, the benefit of the money already spent in rail IS the contracting jobs that kept people employed to build the rail and keep our economy going up to now.  Government likes to spend on public work projects as it keeps people happily employed.

Was this a good investment of the monies spent?  Again, since these are all already "sunk cost", then the answer to this doesn't really matter anymore.  At this point, are additional monies / costs / taxes worth spending to keep this going?  That is the business question that needs to be answered at this point. 

Benefit / returns of the rail may not be there if the rail stays too expensive to operate and needs to be subsidized by additional taxes to operate.  It is throwing more good money after bad.  In business analysis, you have to sometimes cut your losses if the cost is too high.  Do what you need to do to stop the bleeding.

You have to look at the actual investment amount + operating expense + expected revenue to see if there really is a net positive effect.  (Kind of like, does the assault weapons ban really had an effect to anything?)

Here's a short video explaining sunk cost.

I believe this project was pursued under an FTA Capital Improvements grant.  I was reviewing the information and I couldn't find in what happens if an FTA funded project get's canned.  Does the state have to pay back some of the money?  I will try to read more when I have time and also ask my contacts at DOT. 

Sunk cost.

Let's say each dollar is a soldier. You were told you would need to send 5000 soldiers to their death to take a hill.

Now you are told you will need to send another 5000 more to their deaths to take it and possibly more to hold it in place.

You need to figure out if the mission makes sense or is there a better use of the additional soldiers elsewhere.

Eyeeatingfish, the sunk cost fallacy / concept is taught in business school and is hard for people to grasp.

In business school, you are taught to weight cost vs benefit. 

As someone pointed out, the benefit of the money already spent in rail IS the contracting jobs that kept people employed to build the rail and keep our economy going up to now.  Government likes to spend on public work projects as it keeps people happily employed.

Was this a good investment of the monies spent?  Again, since these are all already "sunk cost", then the answer to this doesn't really matter anymore.  At this point, are additional monies / costs / taxes worth spending to keep this going?  That is the business question that needs to be answered at this point. 

Benefit / returns of the rail may not be there if the rail stays too expensive to operate and needs to be subsidized by additional taxes to operate.  It is throwing more good money after bad.  In business analysis, you have to sometimes cut your losses if the cost is too high.  Do what you need to do to stop the bleeding.

You have to look at the actual investment amount + operating expense + expected revenue to see if there really is a net positive effect.  (Kind of like, does the assault weapons ban really had an effect to anything?)

That issue I highlighted in red is the issue I am getting at. I don't believe that the money invested till now is what justifies continuing to spend more money. I am still leaning towards the position that the extra cost will be worth it in the end.

I do think that even if we stopped the rail construction tomorrow, we would still end up spending more money on this project because people would complain about ugly pillars and want them taken down. Liability would also be a concern. So even if we cut our losses on the project, we still might be putting more money into it. Now if that were the case, I would rather the extra money lost to the project be towards a complete system than the alternative.

Do you think they would leave the pillars up, half finished?

As Drck1000 pointed out, we might end up getting screwed if we stop due to the FTA grant. All factors to consider really.

Stop rail, but keep what has already been built as a monument to stupidity.  Grade schools can have excursions to the failed rail project and this will teach them a valuable lesson.  To count the cost before starting anything, including a new business and then add a minimum of 25% for unexpected costs.

Hawaii Stonehenge

Hawaii Stonehenge

Shade .....

for people sitting in their cars in gridlock!

 

Stop rail, but keep what has already been built as a monument to stupidity.  Grade schools can have excursions to the failed rail project and this will teach them a valuable lesson.  To count the cost before starting anything, including a new business and then add a minimum of 25% for unexpected costs.

I did just have maybe a crazy good idea... Homeless encampment!

Though I don't want careless stinky intoxicated homeless above me... Nevermind, scratch that. Stupid idea.

Elevated bike path.  Less costly/difficult than converting to a roadway.