Re: Lahore Metro Train : Orange Line
Yes you are not economist and its clear by your question. So let me try, though i am not an economist but i do public policy type work for living. you need to understand concept of disposable income and economic multipliers. In your example of 20 paid by passenger and 30 paid by Govt is very small part of the equation but lets see how it works in an alternative world where we dont have mass transit the cost of travel say is still 50 but all paid by passenger. So it seems there is an economic wash. However, when Govt pays 30 and passenger saves 30, that 30 savings are going to be used by passenger is number of ways any where from one extra meal outside, fee for child, cup of tea, tikka, etc. This is covered in economic multiplier or how a unit of currency saved by average person goes back in to economy and how it translates in to higher numbers. The interstate development in US generally estimate an economic multiplier of about 6 or every dollar saved in mas transit generating 6 dollars of economic output in the country. There is quite a bit of that in feasibility report. But lets take further the cost of health care. In case of alternative transportation with extra emission, more cars, longer wait times in traffic has economic costs that are being AVOIDED in mass transit. This is call non direct benefits. Simply the cost of society that is reduced by reduced emissions generally overcome most of the first cost of construction.
As for Why Lahore metro was most Expensive. Let me give you the answer by giving you some facts. Firs and foremost the Cost is just one part of the equation. You need to remember benefits as well. There are two kinds of benefits, the benefits that will be generated over the life of the project and additional benefits that are generated if a project is completed in rush manner earlier than otherwise completed. Lahore metro was completed in about 2 years. A similar project average time to complete is 5 years. So to complete in 2 years, offcourse you will work faster and incur more cost but 3 year early completion means 3 years of added benefits on emissions, disposable income, etc.
So In order to call lahore metro most expensive you first need to normalize costs vs. other projects you are comparing that is if another project was completed in 5-6 years, you need to adjust / normalize costs for apples to apples comparison and further you need to add the avoided benefits.
I can go in lot more detail and I am also not professional economist but I have enough training in economics to be able to distinguish whats true economic cost and whats true first cost. You can choose to believe all this or not, as it doesnt matter what you say or not, the benefits that are flowing to end users will determine how good the project is. Same Bull**** and Bakwas was uttered back in 92 about motorway and todays its economic lifeline.