How Madrid built its metro cheaply

In 1995, the Madrid Metro was 71 miles (114 kilometers) long. That would make it the 51st longest metro in the world today, reasonable considering Madrid is the 57th largest city in the world by population. Yet 1995 was the beginning of a revolutionary building spree. Over the course of the next 12 years, the metro grew by 126 miles (203 kilometers), nearly tripling in length. This expansion made it one of the world’s fastest-growing metros, on par with Beijing and Shanghai. Today, Madrid has the sixth longest metro outside of China, and the third longest in Europe after London and Moscow.

The new lines went all over the Community of Madrid, the region the City of Madrid is in. They included links to Madrid’s airport, a new circular line around the city center, extensions into the suburbs packaged with new homes, and new cross-city lines. There was even a circular line connecting five different towns to the southwest of the city of Madrid called MetroSur (South Metro).

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Madrid was able to build so much because of one thing: low costs. The 35-mile (56 kilometer) program of expansion between 1995 and 1999 cost around $2.8 billion (in 2024 prices). New York’s 1.5-mile extension of the 7 subway to Hudson Yard cost about the same (adjusted for inflation). London’s Jubilee Line Extension, built at the same time as Madrid’s expansion, cost nearly ten times more per mile than Madrid’s program. The World Bank described Madrid’s costs as ‘substantially below the levels that were internationally considered possible’. Since the 1990s, Madrid, and Spain as a whole, has continued to build infrastructure at some of the lowest costs in Europe.Madrid’s success provides four key lessons for policymakers and engineers in places that struggle to cheaply build new transit.City-level powers rewarded fast, inexpensive delivery. The structure of the Community of Madrid concentrated the planning, funding, and construction powers at the right level to deliver the project.

This enabled political entrepreneurs to make electoral promises about delivering new infrastructure and have their political fortunes dependent on success.Time is money. The regional government streamlined environmental and planning processes and the company that oversaw construction expedited the building by tunneling 24/7.Trade-offs matter and need to be explicitly considered. The metro planners recognized the trade-offs that exist between station design and cost, signaling complexity and how much testing is required, and tried-and-tested technology versus innovation.A pipeline of projects enables investment in state capacity. Madrid built the necessary state capacity to deliver the project, with experienced engineers and managers working in-house to deliver the technical design and oversee construction. The public company tasked with construction could pay extra to hire experts and procured based on cost and quality instead of just the lowest-cost bid.Lesson 1: City-level powers rewarded fast, inexpensive deliveryFollowing the restoration of democracy in Spain after decades under Francisco Franco, the 1978 constitution created 17 autonomous communities. These function like an American or Canadian federal state, and include the Basque Country, Catalonia, Andalusia, Madrid, and so on. Each of them has an elected parliament, which in turn chooses the President of the Community (a bit like the UK Parliament in Westminster). The Community of Madrid includes the city of Madrid and other outlying cities and towns and is a little larger in size than the US state of Delaware and a little smaller than Île-de-France, the French region including Paris.Some countries, like Britain, have a centralized system, where the approval of new local transport projects is at the discretion of national ministers and Parliament, and funding for construction mostly comes from the Treasury and national taxes. This system creates friction as local authorities have to continually ask the central government for permission to build and for funding. Once they’ve been given funding, there are limited incentives to keep costs down as local leaders are spending someone else’s money on construction.The Community of Madrid demonstrates a more successful structure. Madrid’s regional assembly has high flexibility in levying taxes, including income and VAT, approves a roughly €25 billion budget (68 percent higher than London’s budget per capita), and is in control of the Regional Consortium of Transportation for Madrid, much as the state of New York controls the Metropolitan Transit Authority (MTA). The regional consortium, in turn, funds and oversees the Madrid Metro, light rail, and urban buses.

The winner of regional assembly elections has all of the levers of control over a project at their disposal. They can approve new projects, fund those projects by borrowing, and oversee the construction to deliver the project. Enterprising politicians at the regional level of government could claim that they are going to build metro extensions, and then have the power to build; in turn their political fortunes would be tied to successfully delivering the project.When there are multiple levels of government at work or the size of the area that the government is responsible for is much larger or smaller than the area the project affects, as in Britain and America, it is harder for one politician to take ownership over the construction of a project. This limits the accountability of those in charge if something goes wrong, weakening the incentives and ability of politicians to take full responsibility for successfully delivering the project.The beginning of the metro’s rapid growth happened in the run-up to the 1995 regional assembly election. The election pitted the incumbent left-leaning Spanish Socialist Workers’ Party (PSOE) against the center-right People’s Party (PP). Instead of debating whether or not to expand the metro, the two parties competed on how much they could feasibly build within the next four-year term.The PP candidate for Assembly President, Alberto Ruiz-Gallardón, promised to deliver 30 new miles (48 kilometers) of metro by the next election, compared to the 14 miles (23 kilometers) the PSOE had delivered during their previous 15 years in government. With this pledge, the PP won a majority and Ruiz-Gallardón was duly elected president.Madrid’s four-year electoral cycles gave tight timelines for projects being done. Yet with strong political commitment and the knowledge that fulfilling headline electoral promises would be rewarded by voters, extensions were delivered within four-year windows.Throughout construction, community engagement remained limited and top-down. The metro planners held public meetings, but they were informational rather than consultative. Some feedback was solicited, but this generally involved the location of entrances of stations, not whether the line should go ahead or where it should run to. If a majority of the residents affected by some sub-element of the program, such as the location of an entrance to a station, wanted a change to the plans, they could be modified. But if the change entailed an increase in costs, project staff were likely to deny the request.

While there was criticism from citizens due to the inconvenience of the works, there was also significant demand from people to get metro expansions near them. Ruiz-Gallardón, the President of the Community wrote that the success of the initial metro expansions encouraged ‘one of the greatest demands we received . . . that the next expansion should go further: close to their workplace or their home, everyone wanted to feel involved’. The principle behind this approach to consultation was that the government (and its recent election promises) represented the democratic will of the community, as opposed to that of a vocal minority who might show up at several rounds of consultation to oppose plans.The timelines involved in the metro construction were politically fortuitous to the PP. Each metro expansion created a cycle that enabled the PP to open the lines and stations right before the next election. These events were demonstrations of the PP’s success, which made them useful political talking points in the run-up to the regional elections, where the PP would promise further expansions of the metro to currently underserved areas of the community. Ruiz-Gallardón described the feeling of Madrid residents after the first four years of building as: ‘it was the citizens themselves who recognized that it had been worth it and asked us to continue on [building].’Voters responded positively to the PP’s plans to build new metro lines to their areas. For example, in the run-up to the 1999 elections, the PP pledged to construct a circular metro line between five historically working-class cities to Madrid’s south. While it improved their percentage of the vote by just 0.1 percentage points across the Madrid community, they increased their share of the vote by 3 percentage points across those five cities that would be connected by MetroSur, despite them being traditional working-class PSOE strongholds.On its own, having democratic accountability and the levers of planning, funding, and construction at the right level is not a guarantee of low costs. There are some American projects done with planning and funding at the right level, such as the D Line Extension in Los Angeles, that are more expensive than global averages. But the American projects that are self-initiated, self-directed, self-funded, self-approved, and in politically competitive jurisdictions do better. For example, Portland, Oregon’s streetcar was very successful at regenerating the Pearl District’s abandoned warehouses while being cutting-edge in reducing costs.

Its first section was built for only £39 million per mile (inflation adjusted), half as much as the global average for tram projects.Lesson 2: Time is moneyThere’s an old idea in project management of the restrictions facing projects that can be summed up as, ‘good, fast, and cheap: choose two’. If you want to have a quality final product, the management team has to choose between doing it cheaply but taking a long time and choosing to do it fast but with a lot of extra expense.This line of thinking is present in many British and American infrastructure projects. For example, when the cost of California’s high-speed rail project kept rising, project managers decided to cut parts of the program that ran into San Francisco and Los Angeles and instead focus on building the core section between Merced and Bakersfield, with future phases actually connecting the main cities. In this case, the project team chose to slow down delivery to save on cost.However, Madrid’s example shows that this trilemma isn’t an iron law of nature: it is possible to build a high-quality end result both cheaply and quickly. By building quickly there is less time when the project is exposed to global shocks, inflationary pressures, or chopping and changing by different politicians, which all drive costs up. To speed up building, Madrid removed burdensome environmental impact requirements, sped up the approval of projects, and worked round the clock to finish construction.The Madrid Metro handled environmental impact assessments briskly. The assembly’s environmental evaluation law allowed impact assessments to be abbreviated if the extension was in an already established urban area, as the impacts to nature would be lower. This abbreviation meant that the project had to complete fewer requirements, such as studies on increased carbon emissions or the impact on farmland. The metro projects completed a streamlined assessment with the required parts clearly laid out in law, and would get confirmation within five months, compared to two or more years in Britain or America. Without such streamlined environmental assessments, it is hard to imagine the expansion programs sticking to four-year timelines.The environmental assessment for the 4-mile (6.5-kilometer) extension of Line 11 was just 19 pages long. It covered a few requirements related to cultural heritage, air quality, waste removal, and environmental surveillance that were easily met.