KHOU's Desel exposes light-rail cost discrepancies; METRO refuses to comment
KHOU-11's Jeremy Desel has been examining what METRO is telling the public about the costs of rail expansion versus what METRO is telling the federal government about the costs of rail expansion, and -- shock! -- he finds large discrepancies.
The initial story is set up as one of those typically formulaic he-said/he-said standoffs between Paul Magaziner and Frank "Procurement Disaster" Wilson, but we're going to take on the role of really good editor, excise those elements, and give the facts center stage:
On March 4, the Metro Board voted on a contract with the Parsons Group to design, build and operate four new Light Rail lines.
The cost for the North Line would be $387 million, and the cost for the Southeast Line would be $441 million.
According to letters dated on March 23 from Metro to the Federal Transit Administration, Metro indicated that the current net project cost estimate would be $896 million for the North Line and $911 million for the Southeast Line.
The numbers in the letters are more than double the estimated costs in Metro's contract with its builder.
Neal Meyer also takes on the part of really good editor, and offers this synopsis:
Last month, the Metro board announced that it had approved a deal (though it had not signed a contract) with Parsons Transport Group where Parsons would lead a consortium to build four of the Metro Solutions Phase 2 rail lines, but not including the Wheeler / Richmond rail alignment. This deal would involve building a total 20 miles of Metro's planned 30 miles light rail for a price $1.46 billion. The costs of the North Corridor and Southeast Corridors were announced to be $387 and $441 million respectively. Desel's accompanying news story showed footage of last month's board meeting where Chairman David Wolff expressed optimism of falling costs, presumably due to a fall in materials costs resulting from the current economic downturn.
However, apparently in an FTA Letter of No Prejudice communication dated March 23rd 2009, the costs of the North and Southeast Corridors were stated at $896,797,000 and $911,211,000 respectively.
...Metro has been telling the public and Parsons one thing and the FTA something entirely different concerning project costs. At $897 million, the 5.4 miles of the North Corridor will run $166 million per mile. The Southeast Corridor will run at $134 million per mile. At costs like this, the 30 miles of Phase 2 will run $4.5 billion plus, a figure the Wizard predicted 18 months ago.
Taxpayers deserve better than this. The discrepancies between both sets of numbers is between $2 - $3 billion....
THAT is the punch line (not that Paul Magaziner and Frank "Procurement Disaster" Wilson dispute the amount of the discrepancy, or that Magaziner opposes wasteful METRO projects in general).
Unfortunately, Frank "Procurement Disaster" Wilson refuses to speak to Desel about the discrepancies. In a report tonight, Desel said a METRO vice president initially had something to say about the numbers, then decided that he did not have anything to say. Perhaps in the coming days, somebody at METRO will have something to say about what looks like a doubling in costs for METRO Solutions and an effort to keep the public in the dark. We hope it will be more helpful than Raequel Roberts rambling on nonsensically about nine-volt batteries or the organization's expensive blogger rambling on about China's ambitions to make significant quantities of electric cars.
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