In the 1960’s I remember a famous poster with the caption, “What if they gave a war and nobody showed up?” Human nature being what it is, that scenario hasn’t seemed to happen. There never seems to be a shortage of young men willing to fight. My son Lex learned that lesson the hard way this past weekend as he objected to some guys driving around Brussels and yelling rude comments to the girls he was with. He quickly found himself fighting 2 or 3 of those fine fellows. He learned a practical lesson in probability and statistics, while getting his ass whipped.

That same lesson occasionally gets learned the hard way on big construction projects. Sometimes huge projects get built and simply don’t get used. Think about the $8B Las Vegas City Center project that mostly sits empty. Or much of Dubai.  On the other hand, when President Eisenhower pushed the US Interstate Highway system, the use was strong and has forever continued to grow.

Since China’s leaders don’t have to worry about pesky annoyances like voters, one would think they could make rather rational decisions about asset allocation. The Chinese not-so-high-speed rail system indicates otherwise. The ENR article Defects Appear in China’s High-Speed Rail System describes how the speed has been dropped from a world’s fastest 218 mph to a more normal (for Europe and Japan) 186 mph. Of course, since it’s China, this sort of thing can be done without much public comment or embarrassment.

An even more troubling aspect of the huge high-speed rail project (undertaken in 2008 as financial stimulus during the global downturn) is that the construction costs seem to be coming in way over budget and the ridership is extremely low. Those are not two trends that make a project look successful.

It’s impossible to get real costs for construction spending in China, but the 295 train stations, with glass and marble facades, certainly came at a high price. As did all the track construction and train equipment.

It seems the pride of riding on China’s new jewel doesn’t outweigh the reality of poverty that most Chinese endure. One could undertake a fascinating study comparing huge construction projects that provided great rewards (US trans-continental railway or dredging the bay at Miami Beach) vs. the flops. For any students out there, I quote the always wise Foghorn Leghorn, “Pay attention, boy, I’m throwing you pearls here.”