State begins pruning Green Line extension

STATE OFFICIALS TURNED TO OUTSIDE CONSULTANTS on Wednesday for help in deciding whether they should build the Green Line extension to Somerville and also ordered the MBTA not to approve any more spending on the project over the next three months without their approval.

One of the consultants characterized the Green Line extension in a way that brought back visions of the Big Dig, saying his research indicated the trolley line project as originally designed was the most expensive on a per-mile basis of any similar project in the databases of the Federal Transit Administration. The original cost estimate on the project was $2 billion, including $1 billion in federal funds, but the total cost ballooned earlier this year to $3 billion.

No decision was made on Wednesday about what to do with the project and it may take months before any action is taken, largely because the state boards that oversee the MBTA are operating in the dark. They don’t have reliable cost estimates for the existing project, so they don’t know what savings can be realized by scaling it back. A consultant recommended adopting a different contracting method for the remaining work on the project, but that would require legislative approval. And there was interest in securing additional revenue for the project from the communities and businesses that stand to benefit from the trolley line, but those discussions are barely started and so-called value capture would also require legislative approval.

“We have a chicken and egg problem,” said state Transportation Secretary Stephanie Pollack. She said businesses are unwilling to say how much money they would be willing to put up without knowing what the project will look like and state officials are reluctant to firm up the design of the project without knowing how much money they have to spend.

Three options were on the table going into the joint meeting of the T’s Fiscal Management and Control Board and the Mass DOT board – continue the project as is, cancel the project, or proceed with the Green Line extension but with modifications to the design and contracting process and with the addition of non-state funds.

All three options remained on the table at the end of the meeting, but board members, and particularly Pollack, seemed to favor doing either the second or third option. Pollack said continuing with the existing project and contracting group, White Skanska Kiewit, was unlikely because the contract is unaffordable and offers no price protection to the T.

T officials said they have already spent $380 million on the Green Line extension and, even if the project is canceled, would have to spend $362.3 million more, a figure that includes the purchase of 24 new Green Line cars. The total amount of so-called sunk costs in the project was estimated at $742.3 million.

Pollack said she has heard many people say the state should just scrap the project and use the $1 billion in state funds that would have gone for the Green Line extension to buttress other areas of the state transportation system. But she said the actual savings from scrapping the project would only be several hundred million dollars as a result of the sunk costs.

Two consulting firms offered recommendations on how to proceed with the project.  One recommendation dealt with the contracting process. According to the T’s consultants, a major cause of the ballooning cost of the Green Line extension was a new contracting process authorized by the Legislature that allowed the contractor to take advantage of the transit agency. The approach was supposed to shift the risk of cost overruns from the state to the contractor by establishing a “guaranteed maximum price,” but the T’s consultant, Geoffrey Yarema of the Nossaman law firm, said the contract price was never guaranteed. “In truth, the contracts did not have that characteristic,” he said.

Yarema recommended putting the remainder of the Green Line extension project out to bid using a so-called design-build approach, where the project designer and the builder would work in tandem to complete the job. He said he tested the waters with construction firms and received strong interest in bidding on the project. He said the new approach would shift more of the risk of overruns on to the construction firm.

Another consultant, John Karn of the design-engineering firm Arup, said he had spent seven weeks looking at ways to redesign or scale back the project to make it more affordable. He indicated significant savings could be realized because the original design yielded a project that was the most expensive in the country on a per-mile basis. A chart he showed state officials indicated the Green Line extension on a cost-per-mile basis was seven times more expensive than the average project nationally and three times more expensive than the next costliest project in San Diego.

Karn said the Green Line extension is high cost in part because it’s so short (4.7 miles long versus the 13.9-mile average length of comparable projects), it runs through a densely packed neighborhood, and it involves reconstruction of existing commuter rail lines. He said the train stations are “beyond core functionality” and a proposed maintenance facility “is larger than what is needed.”

Karn made a series of recommendations that he said could pare back costs 10 to 40 percent for various elements of the project; he declined to put a dollar value on the savings because the current cost estimates are so fuzzy.

Joseph Sullivan, the mayor of Braintree and a member of the MassDOT board, said he felt Karn’s savings range of 10 to 40 percent was extremely vague. Pollack acknowledged the fuzziness, but said she believed the savings would run into the hundreds of millions of dollars. “There really are opportunities for significant savings if we’re willing to make some hard choices,” she said.

One of Arup’s proposals would condense the rail corridor and package the Green Line and commuter rail tracks in a way that would avoid relocating one of the commuter rail tracks. He also recommended relocating the community path. He said his recommended approach would yield savings of 40 percent on construction costs.

Karn recommended scaled-down train stations (23 percent cost savings on construction) and cutting the size of the maintenance facility so it could handle 44 vehicles, and possibly as few as 24, rather than the planned 80. He also recommended other design changes as well initiatives to reduce construction time by closing down commuter rail service at times while construction proceeds.

His most controversial proposal would do away with the spur on the proposed Green Line extension to Union Square in Somerville, yielding construction savings of 15 percent. He said current estimates indicate 3,600 people would board the train at Union Square on a daily basis and only 144 would have Lechmere Station as their final destination, with the rest proceeding elsewhere on the T system. He recommended directing those Union Square travelers on to a nearby commuter rail station to North Station and using buses to transport those who want to go to Lechmere.

Rafael Mares, a vice president at the Conservation Law Foundation, which sued the state to force the Green Line extension as part of Big Dig mitigation, raised concerns about the Union Square proposal. He said he was OK with project changes that reduce costs, but he did not favor changes that reduce functionality.

“It strikes me that eliminating the Union Square branch and replacing it with shuttle bus service or even additional commuter rail service is taking away a substantial project benefit, and I don’t think that’s a good idea,” he said.

Before adjourning to discuss unspecified “topics that could lead to litigation” in regard to the Green Line extension, members of the MBTA’s Fiscal Management and Control Board passed a measure requiring T officials to come back to them for approval of any contract on the Green Line extension “regardless of value.” Pollack said the T got into its current predicament because agency officials kept pushing ahead with contracts without checking back in with the MassDOT board.

Joseph Aiello, the chair of the Fiscal Management and Control Board, said he and his colleagues have to make a decision on the Green Line extension quickly because the costs associated with the project will continue to rise. But Pollack cautioned that it will be months, not weeks, before any final decision can be made.

“There is a lot of work to be done before we can move forward with a project that is in fact affordable and fiscally responsible,” she said.

Other members of the two boards said they were reviewing all their options, but most who spoke indicated they would like to find a way to move ahead with the project.  “It’s a matter of what is really viable,” said Brian Lang, a union official who serves on the Fiscal Management and Control Board. “I don’t think we’re against the project. I think we’re just trying to get it back in line,” added Dean Mazzarella, a member of the MassDOT board and the mayor of Leominster. Sullivan, the mayor of Braintree, said the Green Line extension needs better oversight. “It needs a significant dose of tough love,” he said.