In New York City, new tunneling for Metropolitan Transportation Authority subway lines has cost between $1.5 and $3.5 billion per mile, The New York Times reported, which is, itself, seven times the average cost of subway construction in metropolitan areas around the world.
1. One of the biggest factors in tunnel construction is the underlying geological conditions of the project site, which vary widely from one part of the world to another. In a city like New York, for example, you have a combination of subway tunnels below sea level that require boring through dense bedrock for many of the tunnels.
2. Working around existing infrastructure and land improvements makes a project far more expensive than it would be if you are building something new from the ground up. I worked in the planning and preliminary design phase of one major New York City project some years ago where 50% of the project cost related to the complexities of relocating utilizes without disrupting service, working around existing building foundations, and keeping the adjoining streets and subway lines open during construction. The project was never built because of the excessive cost.
3. Many elements of large infrastructure projects have fixed costs that do not vary proportionately with the size of the project. There are economies of scale that apply to almost every stage of the planning-design-construction process. The cost of designing a one-mile tunnel, for example, is going to be substantially more than 1% of the cost of designing a 100-mile tunnel. And the one-mile project doesn’t use only 10 workers if the 100-mile project is done with 1,000 workers.