Prices keep going up: gasoline, groceries, pizza, and light-rail extension projects . . .

Subway bids are budget busters

Low bid for second contract for light-rail extension is more than 50% over earlier estimate

Wednesday, April 16, 2008
By Joe Grata, Pittsburgh Post-Gazette


The apparent low bid for the second contract on the Port Authority's light-rail extension project came in at $48.9 million yesterday, well over budget.

Authority officials wouldn't say how much the bid for the new Gateway Center Station shell exceeded engineering estimates, but the number is well beyond the $25 million to $30 million range discussed two months ago.

The low bidder was North Shore Constructors II, a joint venture of West Mifflin-based Trumbull Corp. and Japan-based Obayashi Corp., who currently hold the initial $156.5 million contract to bore twin tunnels under the Allegheny River for the 1.2-mile North Shore Connector.

Joseph B. Fay Co. of Tarentum submitted the only other bid: $55.7 million.

"We were surprised that there were only two bidders," authority Operations Manager Winston Simmonds said. "It may be because there are so many other civil construction projects out there. The heated construction environment was definitely a concern for us, along with the escalation of labor, concrete, steel and energy costs."

The authority recently revised the contract and decided to close the existing Gateway Center T station for two years during construction as a means of minimizing costs.

"We've cut all the corners we can cut," Mr. Simmonds said.

The high bids do not bode well for the next contract, building the Allegheny Station shell and the elevated superstructure for the system on the North Shore. Those bids are to be opened May 14.

"Escalation is the concern for all contracts," Mr. Simmonds said. "It's reflective of the marketplace locally and nationally."

The Port Authority has a full-funding agreement with the Federal Transit Administration for a $435 million project. As of the end of March, it had spent $162 million for consultants, insurance, other associated costs and construction completed to date.

With another $76.5 million still to be paid for the first contract, and if it decides to accept yesterday's low bid, the authority will have spent and/or committed a total of $287.4 million, leaving $147 million to cover four remaining contracts that include station finishes, signals, rail installation, traction power system, communications, escalators and elevators.

Allegheny County Chief Executive Dan Onorato has previously declared $12 million as the limit on the county's share of project costs.

Mr. Simmonds said he and other officials would discuss what they expect for the project's financial future after reviewing the latest bids.

"We want to clearly understand the differences" between bids and engineering estimates, he said. "We want to gather more information."