Boston's 'Big Dig' Hits a Ditch in Funds

Who will pay for the $10-billion highway project if Congress cuts back?

The "Big Dig" has become the "Big If." As the costliest federal highway project ever, the $10.6 billion Central Artery/Harbor Tunnel project - or the Big Dig - being constructed in and under downtown Boston, is now scrambling to find completion funds.

With expiration of federal interstate-construction funds in l997, state and Federal Highway Administration (FHWA) officials are now negotiating various plans to carry the Big Dig through 2004, the scheduled year of completion. The plan should be announced within several weeks and more than likely the funds will be greatly reduced.

On Friday, Rep. Frank Wolf (R) of Virginia called on US Transportation Secretary Federico Pea to stop approving advance contracts for the project. Congressman Wolf, a long-time critic of the big spending project, is chairman of House Appropriations Subcommittee on Transportation, and has asked for a cap on federal Big Dig spending.

Wolf says, "The cap would not be done in a way to hurt Massachusetts," nor is the cap a threat "to make them do something, but this is a time of fiscal restraint around the country, and they will have to deal with it."

Because the estimated cost of the project has reached a whopping $1 billion a mile, some members of Congress are concerned and vocal. More than 20 years ago Congress committed to funding about 85 percent of the Big Dig, a promise made when federal projects were popular and highway money was plentiful. (The 1985 estimate was $2.6 billion.)

Beneath Boston, tunnels and an expressway will be built for buses, cars, and subways. Above ground, a new green belt of trees and amenities will replace a crumbling central artery built in the 1950s. The Big Dig is administered by the Massachusetts Highway Department in contract with Bechtel/Parsons Brinckerhoff, a private joint venture.

More than a dozen government reports over the last six years have cited millions in waste, mismanagement, and cost overruns. Supporters of the Big Dig insist that close scrutiny by a handful of federal and state agencies has now improved management of the project.

"We have demonstrated a high degree of reducing costs on the project," says Peter Zuk, Central Artery project director, "and we think we can complete the project now on its projected schedule." Some agencies applaud the project's recent efforts to run a tighter ship, and Mr. Zuk disputes many of the critical interpretations of project decisions.

Time to regroup

But so many "ifs" continue to swirl around the massive project that the result might have to be elimination of portions of construction to hold down costs.

Big Dig management is looking at the following ideas as possible solutions to reduce costs:

Shift some management and engineering decisions to on-site locations.

Reduce cost growth on contracts from 20 to 12 percent.

Allow prior commitments to other state construction projects to go forward while putting state funds in the Big Dig.

Adjust to the level of federal funds approved.

In addition to other unknowns, soil conditions under Boston, an old city built on landfill, may present engineering challenges that could add to the costs.

"I'm sure management is trying," says Joe DeNucci, Massachusetts state auditor. "But this office has uncovered $172 million in waste. Cost overruns and problems with a project this size are bound to happen, but here the problems have far exceeded the traditional percentage of waste on projects," he says.

The most complex and intensive underground construction phase of the project is just starting, a phase known for many "change orders" - a time when increased costs are highest. Peak construction downtown will take place between 1998 and 2000.

The US Government Accounting Office (GAO) stated in a letter to Wolf that the Massachusetts Highway Department's (MHD) most recent plan to finance the project "does not clearly identify the project's total costs" and may be "understated."

With such massive amounts of money involved, critics insist millions are overspent easily. What concerns the GAO and other agencies is that when MHD projected future Big Dig costs last year, it excluded costs of about $775 million that it had previously included. MHD assumed other state agencies could now pick up costs for such things as connecting roadways.

"We analyzed several funding scenarios," says Gary Jones, assistant director of surface transportation issues for GAO, "and concluded that Massachusetts could have a funding shortfall of as much as $2.4 billion."

During 1995, legislation was enacted in Massachusetts that required the state Turnpike and Port Authority to contribute $225 million to the Big Dig. Additional payments may follow, although state agencies are publicly concerned about their own budgets.

But to avoid the funding shortfall, Big Dig officials have told federal officials that their intent is to stay within the budget by possibly reducing the size of the Big Dig, or issuing bonds up to $1.8 billion to finance the project, or stretching out the project schedule.

Congress in 'no mood'

Mr. Zuk says, "The Federal Highway Administration asked us to assume an extremely conservative figure of $450 million a year in funds for the remaining years of the project." He says that with adjustments the project can continue, and the state can meet a separate "statewide road and bridge construction program."

Massachusetts Congressman Barney Frank (D) says he will fight against a reduction in federal support to avoid any "cannibalization" of local construction projects to finance the Big Dig.

"The danger is that the project would suck up funds that need to be spent elsewhere," he says, "At the same time it would be a disaster to stop short of completing the project, and it is in everyone's interest to have it completed."

Wolf says Congress is in no mood to fund the project even close to previous levels.

"We'll cap spending," he says, "and we'll let the whole Congress vote on it. I don't know how members are going to go home to California and Oklahoma and explain spending $10.4 billion on 7-1/2 miles of highway," he says. "It would be awfully tough to do."

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