The Andalusian city of Jaén, learns a lesson about sunk costs; en el pasado. Some politicians get it;
An audit commissioned by the P[arty] P[opular] mayor revealed that the tramway’s annual operating costs are estimated at 3.3 million euros, to which a further 1.7 million must be tacked on for a period of 17 years to cover the amortization of the five cars that the city must pay to the Andalusian government.
Considering that around 1.3 million trips were expected to be made on the tramway a year, at the price of one euro per ride, revenues would be too small to make the service sustainable. “If we don’t have the money to pay employees’ wages, where are we going to find five million a year for the tramway?” wonders Fernández de Moya.But others are in denial;
“Every day that goes by represents a waste of public money,” said Andalusian public works commissioner Elena Cortés during one of her latest visits to Jaén, where she did not conceal her government’s embarrassment at seeing the five tramway cars and civil engineering work languishing for lack of political consensus.Actually every day the tram doesn't operate saves public money, but not, obviously, public embarrassment for the officials who squandered the public's money building the system.