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Digging deep on the Transbay Tunnel

McKinsey director Rob Palter discusses the Transbay Tunnel project with Libby Schaaf, Mayor of Oakland, Ed Reiskin of the San Francisco Municipal Transportation Agency, and Claus Baunkjær, Managing Director of Femern A/S

– If you’re going to assemble the world’s leading infrastructure experts, you may as well put them to work. This was the thinking behind a series of workshops at our recent Global Infrastructure Initiative (GII) conference, outside of San Francisco. Participants were asked to provide ideas and advice on how to plan, finance, build, and operate a new multibillion-dollar rail tunnel under San Francisco Bay.

The proposed Transbay Tunnel would be one of California’s largest infrastructure projects and could help maintain the growth trajectory of the $700 billion regional economy. If the San Francisco Bay Area were a country, it would slot between Saudi Arabia and Sweden in the global pecking order. Moreover, the region is expected to add 1.5 million new residents over the next 25 years. Making it easier for people to move quickly and easily across the eponymous bay is an economic necessity.

To be sure, there are things that the region could do now that don’t involve digging tunnels, such as improving the efficiency of the Bay Area Rapid Transit system (which already runs via a single tunnel under the bay) and adding more ferries. Yet these patches, while useful, would not be enough to cope with the future demand. “We’re not going to be able to sustain growth if we can’t unlock the potential of mobility that the Transbay Tunnel would bring,” says Ed Reiskin, director of transportation of the San Francisco Municipal Transportation Agency.

The Bay Bridge: the main road crossing between San Francisco and Oakland.

As currently envisioned, the new four-mile tunnel between the cities of San Francisco and Oakland would carry two commuter-train lines and two high-speed tracks. Once built, it would reduce commuting times and bolster the whole transit system’s capacity and resilience. The GII workshops revealed little concern about the engineering side of the project: big infrastructure companies know how to build tunnels. Consensus among the assembled brain trust was that the bigger challenges relate to planning, politics, and finance. A taste of the discussions:

  • Planning. Allow 2 to 4 years for appropriate planning and development, advised GII participants. Thorough preparation before a shovel hits the ground will save time and money later. Start the siting and review process early, and seek the cooperation of federal agencies such as the Environmental Protection Agency from the beginning. Identify and emulate best practices from similar projects such as the Fehmarnbelt Fixed Link tunnel between Denmark and Germany.
  • Politics. Bay Area residents are famous for being politically engaged. Work with different constituencies early and often to increase the likelihood of reaching a consensus that can be sustained. Make the case for how the tunnel will improve lives. Consider creating a new agency to lead development and delivery, including the use of a public-private partnership.
  • Finance. Since local and regional governments cannot absorb the full cost, the public sector needs to work to attract investors as early as possible. This means building a sound business case, based on clear analyses of environmental, risk, and construction issues. It also means developing a revenue strategy ahead of time, thinking through issues related to subsidies (if any), congestion pricing, and revenues from rights of way. An independent board of directors could add credibility to these plans.

The GII team is now expanding upon these and other recommendations and synthesizing them into a white paper for the consideration of Bay Area political leaders and planners. The result may not be as visually stunning as the iconic Golden Gate Bridge, but it could be every bit as important to the economic future of the region.