Two reasons why I don’t like the Palace of Light project

21. May, 2008

Or, call them reasons #101 and #102. Here they are (in no particular order).

Reason #1: This is a 19th century project in the 21st century

Here is a tale from the days when I studied in Worcester, Massachusetts. The city authorities saw Worcester as a rival to nearby Boston and decided to propel the city into the next century by constructing a number of very expensive public infrastructure objects. One such project was a renovation of the Union train station, which was completed in 2000 and cost the taxpayers about $32 million. The result was esthetically quite magnificent but hardly useful. Most of the time the huge renovated building is just…empty. The days of mass travel by train are gone, welcome to the era of airlines! Most thinking people agree that this renovation was a waste of taxpayers’ money. A train station was a good idea for the XIX century. However, an airport is a much better idea for the XXIst century.

The future of the library as such is highly uncertain these days. I am talking about the advances in information technology and the Internet, of course. For instance, I am a professional scholar and yet I am not a heavy user of SSE-Riga’s library. I am a heavy user of electronic databases such as JSTOR, which are today’s repositories of worthy research papers in economics and other sciences. Access to such electronic databases is quite expensive and a privilege that is prized by scientists in any fields. What about the books? Well, I will not want to read any book in economics that comes out. There are just too many of them relative to my lifetime and the fact that my time has many other productive uses. However, advances in the ways scholars communicate to each other (electronically, again) allow me to get a pretty good idea of whether I want to read a particular book without ever seeing it physically! For example, many publishers provide an opportunity to see portions of their books on the internet. If I think a book is a worthy one, I’ll buy it, or I’ll have the school’s library buy it. The bottom line is, there is no need for a monstrous library to keep every book physically. If the Palace of Light is actually built, my best guess is that I will not use it at all.

More broadly, the 19th century (and before) was when information was scarce and expensive to store. Hence the need for libraries as large physical repositories of information. The 21st century is the age when storage is dirt-cheap and, therefore, the age of overabundance of information. The world is already overflowing with information and it is just a matter of time before an average layman will become overwhelmed with it. Think about how many economics blogs are out there and whether it is physically possible keep up with even with a tiny fraction of them? The scarce resource of the new age is useful information, not any information as such. People will value services that deliver reliable information that is customized to their individual needs. I just don’t see how a library fits into the new information age. It risks becoming a train station in the 21st century, a palace of foolishness.

Reason #2: The whole enterprise smacks of embezzlement of taxpayers’ money

Here is a simple recipe for embezzlement. Offer a ‘friendly’ party to fund a public project that is large, unique, and technically complicated, so as to minimize the number of contractors can qualify. Inflate costs to hide profits. Make sure only two contractors ‘compete’ for the project. One of them has to be a ‘fake’ one, whose offer would be clearly inferior. Take special care that no other potential contractors participate in the tender. Suppose, for a moment, that the above ‘conspiracy theory’ is a correct description of the events that have taken place over the last few years. Can we say anything about the amount of embezzlement?

Not many local contractors can argue they have much experience in building ‘palaces’ so only two local consortia applied. The price initially offered by PBLC and others consortium (189 million Ls) is higher than the price offered by Skonto and others (139 million Ls) by such a ridiculously high amount that it’s quite clear who calls the shots here. It would have worked very nicely if it was not for the need to get rid of Estonia’s Merks. The excuse used by the locals was an allegation that Merks is corrupt. The Estonian authorities have, indeed, launched an investigation into allegations of bribery against Merks. This fact notwithstanding, we have to remember that nobody is guilty in anything until proven in the court of law. The decision to exclude Merks was, therefore, absolutely arbitrary. This can only be interpreted as using a doubtful excuse to make sure Skonto and others get the contract.

What is interesting about the whole story is that (understandably, angered) Merks came forward with an offer to build the palace for 87 million Ls. I think this is a much better estimate of the true cost of building this library. Anybody who ever renovated his or her apartment (or a house) knows that the only effective means of ensuring a lower price is to auction the work to various construction brigades. The amount of technical details even in the simplest construction work is quite high and the specialist will always find ways to fool a non-specialist. Only by having different construction teams compete against each other can one ensure that the price being offered is close enough to the minimal possible price. If you buy the above conspiracy theory, the whole Palace of Light tender has been a fake, with Merks being the closest to the real competition. This may then provide us with a proxy of how much of taxpayers’ money will be pocketed by large construction companies and their protégés in Saeima. The government agency has just signed the contract to build the library for 135 million Ls. I guess you can do the math yourselves.

In Latvian here

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