Disputes involving change orders and cost-overruns have threatened the budget for San Francisco’s $1.6 billion Central Subway project, the San Francisco Examiner reports.
The newspaper reports the project is nearly out of money.
An independent federal monitor warns in a new report that the San Francisco Municipal Transportation Agency may soon spend its last federal dollar for the project and exhaust the “contingency” budget meant to cover cost overruns, the Examiner reports.
Once that happens, critics warn, San Francisco may be on the hook for any dollars needed to complete subway construction — lest The City be left with a train-less hole in the ground.
The dire warning from the federal monitor comes amid several challenges for the project: SFMTA director Ed Reiskin is set to depart in August, and the project contractor, Tutor Perini Corporation, has blasted his leadership and challenged the project’s likelihood of coming in under budget in an email exchange obtained by the San Francisco Examiner.
“Tutor Perini Corporation’s executives have sat thru [sic] too many meetings with you, Ed, where you promise the moon and deliver nothing,” Tutor Perini CEO Ron Tutor wrote to Reiskin in May.
SFMTA says in a statement Central Subway staff is “resolving issues with Tutor on an ongoing basis,” and both parties are “aiming” to resolve some issues in a summer meeting.
It’s not exactly a glowing sendoff for Reiskin, but the problem is also not unique to San Francisco — Tutor is known for aggressively pursuing cities with claims and change orders. A July 14 report from the Wall Street Journal highlighted Tutor Perini’s $120 million lawsuit against the Port Authority of New York and New Jersey over “delays and cost overruns” to construct the George Washington Bridge Bus Station in Manhattan.
Reiskin hired Nadeem Tahir as the subway’s new project director. He has 35 years of experience on projects from Los Angeles to Washington D.C. and served in the Federal Transit Administration.
“I would like to thank Ed for giving me this opportunity to serve the city,” Tahir told the SFMTA Board of Directors on in mid-July at their regular public meeting. “As he mentioned, transit is what I do. I took this on as a challenge, and I feel that I can help to bring this project to the finish line.”
The federal monitor asserts that the Central Subway’s budget is running on fumes and its completion date threatens to slip back even further.The monitor warns the project may not be completed until after May 2020.
The Examiner reports:
Acrimony between SFMTA and the project contractor, Tutor-Perini Corporation, are the source of that funding drain according to the independent monitor’s May report. That monitor is technically known as a Project Management Oversight Committee. Tutor Perini has filed more claims than anticipated for a project of this size, the independent federal monitor wrote, citing changes in the original subway plans that are driving costs up.
