Construction costs ballooning for BART extension to San Jose

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California Construction News staff writer

The Santa Clara Valley Transportation Authority is asking the Biden Administration for a $4.6 billion grant for construction of the BART extension to San Jose.

With the grant, officials say BART construction will be completed by 2034 — four years later than VTA’s current official timeline. Currently, the FTA has agreed to fund up to $2.3 billion.

Construction costs could now top $9.3 billion, a 35% increase from the last estimate of $6.9 billion and nearly double the estimate in 2014, however officials say a more accurate estimate will come during a top-to-bottom “rebaselining” process being conducted by Gary Griggs, a former president of Parsons Brinckerhoff, a major design and construction firm.

“What’s going on in the marketplace makes (costs) very difficult to predict,” Griggs said. “There’s a lot of uncertainty, but I think there’s a consensus that those numbers will start coming down,” Griggs is reported saying in the Mercury News, referring to inflationary factors driving up the price of mega-projects around the country.

At the heart of VTA’s funding request is a federal risk analysis that in 2021 pinned the project’s likely cost at $9.1 billion. According to the newspaper, VTA officials said at the time that the federal figure was a cost ceiling; however, the analysis included higher figures that could top $10 billion.

San Jose mayor Sam Liccardo has challenged the newspaper’s reporting, and issued a news release stating the $9.3 billion figure “is not a true cost estimate.

Applying for “New Starts” funding “provides a path for BART construction to move forward,” Mayor Liccardo said in the statement. “The agency seeks to accelerate construction activities next year, including the boring machine purchase, building demolition, utility relocation, and site preparation.

“FTA’s support for the project remains strong, as the agency has long recognized BART-to-Silicon Valley among the highest-priority transit projects nationally.”

The FTA has already committed $225 million to the project, and the Biden Administration just allocated $200 million more.

Phase I of the project was completed in 2020 more than $80 million under budget, “in large part because bidding took place during the Great Recession,” the mayor said. “If the economy continues to soften–as expected–next year, that could reduce pressure on construction costs.

If the FTA accepts the VTA’s plan for more federal funding, it would be “the largest single New Starts grant in history,” said Eric Goldwyn, a New York University professor who studies transit project costs. “That’s a big ask.”

The FTA acknowledged in a statement that VTA proposal was received and staff  “will examine their requests and respond as soon as possible.”

“Every major transit project in the nation has seen costs balloon, particularly through the pandemic,” Liccardo said. “Caltrain’s electrification costs increased by only a few hundred million dollars, however, because much of the construction on the project had already been completed.

“Therein lies the answer – as I told the Mercury News, we can control costs by doing two things: sign construction contracts, and get a shovel in the ground. That’s it. We don’t get the luxury of any assurances until a contract is signed.”

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