What’s the biggest, most expensive public works project in the history of the country? The answer still is Boston’s ongoing Big Dig project, known as the Central Artery/Tunnel project.
Begun in 1991, and scheduled to be completed on the last day of 2004, Boston’s Big Dig has had as much dirt thrown at it, as has been excavated so far. Original cost estimates were approximately $3 billion and change. Latest estimates put the final price tag at an astounding $14-plus billion.
And there’s more. The Big Dig has been investigated by the federal government, the Attorney General’s office of the Commonwealth, and harshly criticized by many members of Congress, led by a vocal Senator John McCain, R-AZ. It’s a political hot potato that has led Acting Governor Jane Swift to dismiss two members of the authority overseeing the project, who were critical of the Big Dig’s finances. But finally, at least from a financial standpoint, there appears to be light at the end of the tunnel.
The Federal Highway Administration recently gave approval to the Big Dig’s latest finance plan. At the same time, a separate federal audit, as noted by press reports out of Boston, criticized Big Dig officials for, “failing to reveal the possibility of costly construction delays that could push back the project’s scheduled opening by six months.”
Ted Alves, the deputy assistant inspector of the U.S. Department of Transportation responsible for keeping tabs on the Big Dig’s financial health said, “We’re saying it’s reasonable to keep to a schedule, but when it comes to informing oversight officials and the public, they should disclose the risks in the finance plan.”
The Department of Transportation’s audit says that an analysis performed by the inspector general’s office, plus another by the accounting firm of Deloitte & Touche, found that Central Artery officials were aware that when they submitted their financial plan back in September 2001, the project’s completion could fall behind by as much as half a year. However, they purposely did not disclose that possibility in the plan.
According to the inspector general’s report, each day of delay could add another $667,000 to the Big Dig’s already bloated costs, and engineering problems. To compound the situation, the Deloitte & Touche analysis was actually in the hands of the Central Artery officials in August 2001, a full month prior to the Big Dig’s submission of their own financial plan.
On the bright side, the audit does say that project officials had the foresight to set aside approximately $400 million in a contingency/rainy-day fund to pay for any possible delays. (A six month delay would cost approximately $120 million.)
Commonwealth and project officials said the criticism was minor in comparison to the overall approval of the financial plan. Had the plan not been approved, the Big Dig would be stopped in its tracks in just a few months.
Matt Amoreillo, the new Massachusetts Turnpike Authority chairman, the state bureau that has primary responsibility for the project, called the plan’s approval, “great news.” The preliminary approval by the Federal Highway Administration immediately frees up $260 million in federal funds, which will allow the Big Dig to continue forward.
Amoreillo also reportedly said that the six-month estimate is out of date, and that in all probability the project is back on schedule to be completed by Dec. 31, 2004. At the “latest,” he believes that the Big Dig will be finished by February or March of 2005.
The submission of the Big Dig’s financial report to the Transportation Department’s inspector general, and the Federal Highway Administration was mandated by a skeptical Congress after massive cost overruns came to light in 2000. The latest inspector general’s audit was scheduled for publication in March 2002 and was sent to the House and Senate Appropriation committees. This report was largely laudatory of Big Dig officials and the finance plan, which the inspector general’s office was expected to approve. However, the disclosure issue was a still a sore point and was singled out for improvement. Countering, Turnpike Authorities immediately announced they would include $150 million in insurance premiums in the project’s bottom line costs, bringing the “final” price tag of the Big Dig to $14.64 billion.
On the heels of the plan’s preliminary approval by the inspector general’s office and the Highway Administration, Massachusetts state legislators rallied around the project and said they were prepared to do whatever was necessary to fund the $138 million for the Big Dig’s next construction phase. Lawmakers said they could issue bonds to raise the necessary money.
One State Senator, Robert Havern, who co-chairs the Commonwealth’s Transportation Committee, said state lawmakers intend to move quickly now that, “We know they’re not playing with funny money over there at the project. We need them to say that everything is okay over there, and apparently they have.”
The other co-chair, State Representative Joseph Sullivan, was a bit more cautious. “From the state Legislature’s standpoint, we were burnt two years ago when more than $2 billion in overruns came to light,” he said. “We don’t want that to happen again … The state is now required to absorb additional costs, so we’re going to take a very cautious approach in approving additional resources. If I can get a letter from Federal Highway that informs us that, with our action, this finance plan is approved, then yes, we will move ahead.”
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