US Tunnel Construction Costs: Why Subways Cost So Much

Part of "How It Gets Built" — Buildermuse's series on the machinery behind modern construction.

New York's Second Avenue Subway Phase 1, a 2.7-kilometer, three-station extension that opened in 2017, cost $4.6 billion in year-of-expenditure dollars, or $5.3 billion in 2020 dollars. The Transit Costs Project at NYU's Marron Institute, which maintains a database of more than 900 rapid transit projects in 59 countries, calls it the most expensive subway built in the world on a per-kilometer basis. Its final report (most recently updated February 11, 2023) concludes that Phase 1 cost 8 to 12 times as much as a composite low-cost baseline drawn from its Italian, Istanbul and Swedish case studies.

That report is the most detailed public explanation of US tunnel construction costs, and its findings are specific: oversized stations, labor and staffing levels, procurement practices that push risk onto contractors, and soft costs. For contractors, engineers and agencies, those findings are also a map of where the next round of reform will hit.

An earlier version of this article cited a "2.5 times the global average" figure, a 61-project Eno Center comparison, specific costs per mile for Paris, Madrid, Crossrail and Los Angeles, TBM utilization rates, and staffing of 25 workers per shift in New York versus 9 to 15 in Europe. Those figures could not be traced to the sources named, so they have been replaced with numbers from the Transit Costs Project report itself.

The Scoreboard

The Transit Costs Project report makes three framing points before it gets to New York:

• The United States is the sixth most expensive country in the world to build rapid rail transit in the project's database.
• That ranking understates the problem. The five countries with higher average costs are building projects that are more than 65 percent tunneled; in the United States, only 37 percent of total track length is tunneled.
• Within the US, Second Avenue Phase 1 is about 10 times more expensive than the Italian and Swedish subways the researchers studied, and more than 10 times as expensive as the Turkish subways they examined.

The researchers caution that their factor estimates carry uncertainty. Their calculation produces a point estimate of 9.34, but they say the honest range is 8 to 12.

Where the Premium Comes From

The report breaks the New York premium into three synthetic factors: physical structures (stations, tunneling, systems and standardization), labor, and procurement plus soft costs. Because the factors multiply, premiums of 25 to 50 percent in several places compound into an order-of-magnitude difference.

Stations: the largest single driver

According to the report, 77 percent of Second Avenue Phase 1's hard costs went to stations, with the rest going to the tunnels between them. The station digs were far bigger than the platforms they serve:

• The 96th Street station dig is 2.6 times longer than its 187-meter platform.
• The other two station digs are about twice the platform length.
• In the comparison cases, station digs were only 3 to 20 percent longer than the platforms.

The researchers estimate that oversized stations alone raise project costs by a factor of 2.06. The two mined stations on Phase 1 also cost about 1.5 times more per unit of volume than the cut-and-cover 96th Street station.

Systems and finishes add to the problem. On Phase 1, systems and station finishes cost $1.36 billion against $1.57 billion for tunnels and station civil works, a ratio of 46.5 to 53.5. The report puts the Paris ratio of systems to tunnel costs at roughly 15 to 40. Phase 1's three stations were bespoke designs, using two different escalator contractors and different numbers of exits, crossovers and elevators, which raised design costs.

The same pattern shows up abroad. The report notes that Oslo's Fornebu Line, with mined stations, cost $330 million per kilometer, compared with $110 million per kilometer for the Løren Line, whose sole station was built cut-and-cover.

Labor: staffing more than wages

According to the report's interviews with cost estimators, agency insiders and consultants, labor is 40 to 60 percent of hard costs on New York and Northeast projects. In the low-cost cases of Turkey, Italy and Sweden, labor is 19 to 30 percent, and in high-wage Sweden it is 23 percent. Moving from a 25 percent labor share to a 50 percent share, holding everything else constant, triples labor costs and raises total project costs by a factor of about 1.5. The researchers found that at most a quarter of the difference comes from differences in pay. The rest is how many people are on the job.

Tunnel boring is the clearest example. During Phase 1, 46 workers were employed to operate and support the TBM per eight-hour shift, plus 29 management staff overseeing construction over the course of the day. Interviewees told the researchers the TBM could have been staffed and supported with 30 workers per shift. The Istanbul chapter adds a broader comparison: a New York team running a single TBM employed 60 TBM workers, 78 support crew members and 44 management staff across three eight-hour shifts, at a labor cost of $593,000 per month, more than the monthly operating cost of a two-TBM operation in Istanbul. Phase 1 averaged 12 to 15 meters of advance per day, while each Istanbul machine was expected to mine up to 24 meters per day.

Overstaffing is not only blue-collar. On Boston's Green Line Extension, the researchers found 40 to 60 percent more supervisors than is normal in the Northeast during the project's first iteration.

Procurement and soft costs

The report lists procurement cost drivers that will sound familiar to anyone who has bid public transit work: secrecy and adversarial relationships between agencies and contractors, thin internal agency capacity to manage contractors, insufficient competition, and a desire to privatize risk that leads contractors to bid higher. The researchers estimate these raise costs by a factor of 1.85, with the extra money going to red tape, unused contingencies, paying workers during delays, defensive design, contractor risk pricing and profit.

Soft costs are a separate line. The report harmonizes soft costs as third-party design, planning and project management. In its comparison cases those add 5 to 10 percent on top of hard contract costs, most commonly 7 to 8 percent. On Second Avenue Phase 1, project management and design contracts were 21 percent of construction costs. The report puts typical ranges at 5 to 10 percent in France and about 10 percent in Italy and Istanbul, and estimates the soft-cost effect as a New York premium factor of about 1.2.

The Machine Is Not the Expensive Part

The tunnel boring machine is the most visible piece of a tunnel job and one of the smaller line items. The Transit Costs Project's Istanbul chapter reports that a rebuilt TBM on a recent twin-bore project there cost $21 million in purchasing-power-parity dollars, against about $40 million PPP for a new Herrenknecht machine. Turkish contractors also share machines and support equipment across concurrent projects; one contractor running two rail projects saved 35 percent on TBM purchases.

Compare that with the New York crew cost above. A machine is bought once; the crew, support train and management staff are paid every month the job is open, whether the machine is advancing or not. That is why advance rates and staffing move total cost far more than the machine price. For a project-level look at a recent US drive, our HRBT Expansion profile walks through one machine boring two harbor tubes, and our tracker of active US TBM projects covers the others.

What the Researchers Recommend

The good news in the report is that the practices behind low costs are known and transferable. Its recommendations include:

• Design for cost. Standardize station designs so they can be repeated across projects, use cut-and-cover construction wherever possible (especially for stations), build stations as shallow as surrounding infrastructure allows, and build simple station boxes with little more space than passenger circulation requires.
• Staff up permanent in-house positions so agencies can plan, design and supervise contractors and consultants themselves.
• Keep risk in the public sector. The report says requiring the private sector to own all the risks just leads to higher bid prices without reducing the risk of major overruns, and that reforms aimed at privatizing risk have raised costs in England, Singapore, Hong Kong and Canada.
• Itemize contracts with publicly reviewable costs, avoid fixed-price contracts, and make the change order process flexible and lawsuit-free, including allowances for mid-project changes in market wages or commodity prices.
• Award on technical merit, with the technical score at least 50 percent of the decision and possibly 60 to 70 percent or more.
• Limit contingencies. The report says contingencies sometimes running 40 to 50 percent tend to be absorbed into the budget with little benefit.
• Involve the contractor early on complex design-build projects, and on design-bid-build projects take design only to 60 to 90 percent so the builder can make final decisions.

The report also points to Stockholm, which built its T-bana metro for $3.6 billion in 2022 dollars, about one-fifth the per-kilometer cost of the contemporary Washington Metro, with standardized but well-finished stations.

The Active Board

The projects that will test these lessons are under contract now.

• Second Avenue Subway Phase 2. ENR reported that on August 18, 2025 the MTA board approved a $1.97 billion design-build contract to Connect Plus Partners, a joint venture of Halmar International and FCC Construction, for 1.8 miles of twin tunnels. Phase 2 has a $6.99 billion base budget, nearly $7.7 billion with financing, a $3.4 billion full funding grant agreement, three new stations at 106th, 116th and 125th Streets, and revenue service targeted for September 2032.
• Hudson Tunnel Project. The Gateway Development Commission signed a $6.88 billion FTA Capital Investment Grant full funding grant agreement on July 8, 2024, which Tunneling Online reported as the largest grant in the program's history, and closed $4.06 billion in federal RRIF loans, securing the full $16 billion project cost. Gateway says the new tunnel will open in 2035, with rehabilitation of the 1910 North River Tunnel completed in 2038. Our Hudson Tunnel project profile covers the contract packages.
• Hampton Roads Bridge-Tunnel Expansion. The $3.9 billion Virginia highway project finished mining its twin bored tubes in September 2025 and is now in tunnel outfitting.

Subcontracting and supplier opportunities on federally funded parts of this work show up regularly on our bids board.

What This Means If You Bid Tunnel Work

• Station scope drives the price. On transit jobs, read the station excavation dimensions against the platform length before you look at the tunnel drive.
• Risk language is a cost item. The report's procurement factor is built from contingencies, delay costs and risk premiums. Price the risk you are actually being asked to carry, and ask questions about differing site conditions provisions before bid day.
• Staffing assumptions decide competitiveness. If a project labor agreement or work rules set crew sizes, build the estimate from those, not from a generic production rate.
• Soft costs are visible. Agencies under pressure to explain their numbers are scrutinizing consultant and construction management fees. Firms that can show lean oversight staffing have a story to tell.

Your Action Item for This Week

Download the Transit Costs Project final report from the NYU Marron Institute's transitcosts.com site and read the introduction's cost-premium section and the New York case. If you sell into public agencies, the station-sizing, staffing and soft-cost numbers are the sharpest benchmarks you can bring to a capital program meeting, and they come from a source agencies already know.

Frequently Asked Questions

How much did Second Avenue Subway Phase 1 cost?

The Transit Costs Project reports $4.6 billion in year-of-expenditure dollars ($5.3 billion in 2020 dollars) for a 2.7-kilometer, three-station extension that opened in 2017, making it the most expensive subway per kilometer in its database of more than 900 projects.

Why are US tunnels so much more expensive than European ones?

The Transit Costs Project attributes New York's premium to oversized and bespoke stations (77 percent of Phase 1 hard costs; a factor of about 2.06 from station size alone), labor at 40 to 60 percent of hard costs versus 19 to 30 percent in low-cost countries (a factor of about 1.5), procurement practices that add a factor of about 1.85, and soft costs of 21 percent versus 5 to 10 percent elsewhere (a factor of about 1.2). Together they produce an estimated 8 to 12 times premium over the low-cost baseline.

How many workers did the Second Avenue TBM use?

The report says 46 workers operated and supported the TBM per eight-hour shift during Phase 1, plus 29 management staff over the course of the day, and that interviewees believed 30 workers per shift would have been enough.

What does a tunnel boring machine cost?

The Transit Costs Project's Istanbul case reports about $40 million (purchasing-power-parity dollars) for a new Herrenknecht machine and $21 million for a rebuilt one. Crew, support and management labor over the life of the drive typically matters more to total cost than the purchase price.

What are the biggest US tunnel projects under construction?

Among transit and highway tunnels: the $16 billion Hudson Tunnel Project between New Jersey and New York, Second Avenue Subway Phase 2 in Manhattan (a $6.99 billion base budget), and the $3.9 billion Hampton Roads Bridge-Tunnel Expansion in Virginia.