What Determines Soft Costs in Major Public Transit Fixed Guideway Projects? Examining Four Decades of Experience

Document Type

Journal Article

Publication Date


Subject Area

economics - capital costs, mode - rail, mode - tram/light rail, place - north america


soft costs, capital costs, capital expenditures


Soft costs in major public transportation fixed guideway projects generally account for about 20% of the project's capital cost, but wide variation in the relative magnitude of soft costs can make them a major factor in the public deliberation over whether to build a transit project. In addition, soft costs are often poorly understood and have varied considerably more than industry estimation techniques predicted. This paper examines the actual capital expenditures from 59 U.S. light and heavy rail projects and seeks to explain the wide variance in soft costs (from 11% to 54% of construction costs) by analyzing project characteristics such as complexity, physical attributes, sponsor agency traits, and the circumstances of project development. The analysis develops a multivariate regression establishing a cost relationship between 10 project characteristics and resulting soft costs as a percentage of "hard" (construction) costs. These results can be used to make more accurate estimates of soft costs for future projects.


Permission to publish the abstract has been given by TRB, copyright remains with them.