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Monday
Jul252011

Our Chinese Bay Bridge

The high-speed rail fiasco in China makes us worry about our San Francisco-Oakland Bay Bridge whose gigantic one-tower landmark suspension segment has been fabricated, you guessed it, in China. In the same breath, an important historical fact: Neither the Japanese Shinkansen nor the French TGV, the two powerhouses in high-speed rail, have EVER had a single fatality in their many decades of service.

43 bodies (or 39 ... why is it so hard to count bodies?) have been pulled out of the wreck near Wenzhou in Zhejiang Province. 210 people have been injured. Heads are rolling (so far: Long Jing, chief, Shanghai Railway Bureau; Li Jia, chief, Shanghai railway bureau's committee of the Communist Party; and He Shengli, deputy chief of the bureau). The government is trying to minimize the incident by gagging the media and apparently by burying in all haste the rail cars at the foot of the very viaduct from which they fell (rather than examining the wreckage for causes). And Chinese rail stocks are down 10% for the day.

Recently, countless incidences of shoddy construction and pandemic cheating to reduce costs have been discovered. Much to the chagrin of the Chinese themselves.

Just search for China bridge collapse, and you'll get a whole gallery of macabre images of collapsed Chinese bridges. OK, a few of our bridges collapsed as well, but it's a rarity in the US. In China, it's routine. For example, two bridges collapsed within 24 hours on July 15, raising the total for that week to four.

And it's not just bridges. In Yunnan Province, a brand-new road opened for traffic on July 8 and collapsed on July 10.

 

Then there's a brand-new 7-story building. While they were still finishing the interior, it suddenly collapsed on its own on March 22, possibly because of a shoddy foundation. 

 

The list goes on ad infinitum.

I'm not dissing the Chinese. It's their country, and they have a right to manage its astounding development in ways that might confound us from time to time. However, I can see the Chinese-made tower of our new Bay Bridge from my window. So it's pretty close to my heart.

Nor do I want to engage in fear mongering. I assume, perhaps naively, that US quality control on the project is tight. What I do want to do is point out the long-term economic idiocy of having the Chinese fabricate the largest steel infrastructure project in California.

The 1930s Bay Bridge, one of the longest bridges in the US, has two spans: the western span, a suspension bridge, that links San Francisco with Yerba Buena Island, and the eastern span, a cantilever bridge, that links Yerba Buena Island with Oakland. The Yerba Buena Tunnel connects the two. While the suspension bridge held up well in the 1989 Loma Prieta earthquake, some cantilever segments collapsed. So in 1990, it was decided to replace the eastern span with a seismically more stable design, while the western span would be retrofitted with seismic upgrades (completed in 2009).

Now, 22 years after the earthquake, the Bay Bridge is still not finished. The 4.5-mile eastern span is a decade behind schedule, and its original $1.3 billion price tag has ballooned to $6.3 billion, possibly the most expensive single structure ever built, and the price doesn't even include the western span. Construction and retrofitting costs for the entire bridge will reach $7.2 billion.

(By comparison, building the Bay Bridge in the 1930's cost $77 million, using American labor and materials. The difference is largely inflation, a stated policy goal of the Fed, which, if you do the math, destroyed about 99% of the value of your and my dollars in the intervening years.)

The cost overruns and delays were caused not only by the dramatic single-tower design of the "self-anchored suspension" bridge (SAS), at 1.2 miles the longest of its kind in the world, but also by turf battles here and quality issues in China. 

The huge and complex steel segments for the suspension bridge and the 525 ft. tower were fabricated by Shanghai’s Zhenhua Port Machinery Co. (ZPMC), a subsidiary of China Communications Construction Co. Ltd, which is partially owned and controlled by the Chinese government. ZPMC hasn't built a lot of bridges, though. It's a dominant player in manufacturing container cranes. Which is not the same thing.

On April 18, 2006, a joint venture between American Bridge Co. and Fluor Corp was awarded the contract to build the SAS section of the bridge for $1.43 billion. Their low bid was based on having the SAS fabricated in China for what they said would be $400 million in savings. However, those estimated savings have largely been eaten up by efforts to resolve issues around steel and weld quality that required wholesale changes to inspection procedures, additional performance incentives, and an army of American expats in China (the upshot: our expats are pumping up the Chinese economy with our dollars from California).

The actual savings from having the SAS fabricated in China—maybe $100 million—are a mere rounding error in the total cost of the bridge, which has reached $7.2 billion. In return for these paltry savings, California, and the Bay Area in particular, have lost an enormous economic opportunity: 

—Lost thousands of jobs for trained welders and other workers needed to shape 43,000 tons of steel into a landmark bridge.

—Lost jobs needed to design and build plant facilities and infrastructure.

—Lost thousands of secondary jobs mostly in small businesses that sell food, clothing, cars, fuel, etc. to these workers.

—Lost an opportunity to alleviate our housing quagmire (more workers have more money to buy homes).

—Lost state income tax revenues from the lost jobs.

—Lost sales tax revenues on spending derived from these jobs.

 

But most importantly, California, not China, would now be known worldwide as the go-to place for complex bridge projects. Numerous such projects could have been landed in the future, a boost for our dwindling manufacturing sector and the companies that support it. Instead, we're seeing a further deterioration in our know-how and ability to handle these kinds of projects. And as more and more of them are awarded to Chinese firms for a few pennies in perceived short-term savings, our engineers and workers will fall by the wayside. Soon, we CANNOT build such a bridge, even if we wanted to.

And the long-term impact of short-sighted outsourcing? In the Bowels the Jobs Report, 15.4 Million Missing Jobs.

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Reader Comments (7)

No one audits or reviews detailed accounting on these government contracts. There are so many under the table payoffs from California to China on this deal that following the money becomes impossible. Political corruption on both sides of this deal.

But hey, taxpayers just fund it. We never ask questions or review every dime of how our money is spent.

The finger pointing should be at ourselves for letting them sign the checks and pay their buddies.
October 29, 2011 | Unregistered CommenterFreudianSlip
Wall Street and its spokesman Alan Greenspan are now imploring Americans to open the immigration gates allowing specialty foreign workers to work and live in USA while specialty American workers are moving abroad due to the lack of jobs for Americans at home. US Corporations for years already have been training and replacing American workers with foreign workers and engineers so they can maintain profit margins and CEO bonuses while eroding the value of American landscape and social values of Americans. Now they want to return business back home but they want to use foreign workers instead of using the unemployed American workforce that has no jobs. The lobbying forces will continue to aim for more immigration but they fail to inform us that there are no jobs in America and American engineers and management are being destroyed to short term Wall Street profits.
January 4, 2012 | Unregistered CommenterApplezin
Americans generally don't do their homework. Because a Chinese firm can tack-weld a shipping container together does not mean it can make a structural load-bearing product like a suspension bridge.

I have (attempted to) manage small projects in China and find even the most "educated" engineers to be dullards. They lack not only the experience but core intelligence to handle sophisticated projects. Most of the engineers excelled at cut and paste, but not original thinking
January 5, 2012 | Unregistered CommenterShibumi
The process of submitting contracts to the lowest bidder globally instead of to the most qualified bidder domestically is a failed policy that is now haunting America. Most taxpayers would prefer to see their debt laden mega projects be built by Americans on American soil. It is time to take your country back from globalization fraudsters who seek to destroy America from with in by stealing your jobs and shipping them overseas. Otherwise you all better learn to speak Chinese because are rapidly becoming your new masters.
January 5, 2012 | Unregistered CommenterChris
Yeah I agree with Shibumi. Mainland Chinese lack common sense and initiative when it comes to creation. Honestly, I wouldn't trust a mainlander for the most part with building something of such importance and high value. Keep it in America I say.
January 5, 2012 | Unregistered CommenterSilent Observer
This should laid at the feet of local politicians, who insisted that the original lower cost bridge designed by Caltrans be scrapped in favor of the more "aesthetically pleasing" SAS. I wonder what the bridge toll will have to be jacked up to to recoup the costs of this boondoggle.
January 11, 2012 | Unregistered Commenterrfb
The implied assumption that cost savings from Chinese fab eaten up by complications wouldn’t happen with US fab is not true. In fact it could have been worse. Part of the problem could simply be the fault of errors or oversights in the contract documents by the consultants who prepared them for Caltrans. In fact US companies are quite expert at finding and exploiting such errors. Those jobs should have been kept here for a variety of reasons but this is not one of them.
As for quality I’m inclined to believe the Bay Bridge is being built to a higher standard than if it were going to be placed in China. There may be no black and white here. I’ve never worked on one that is perfect. Good enough is always a contentious issue.
January 21, 2012 | Unregistered Commenterdj

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