Deep-Bore Tunnel Bids, Arriving for Halloween, Get Early Treats from WSDOT

by on October 21, 2010

You know that phrase, “money quote”? This time it’s literal:

“Both teams, and maybe the two teams that dropped out, expressed concern the [state’s cost target] is too low. They couldn’t figure out how to bid the project at that amount or lower,” Dick Page told the Seattle Times, explaining WSDOT’s decision to spend down its $415 million cash reserve by $230 million in concessions to the two bidding teams.

(Page is district leader for HNTB, the engineering part of Seattle Tunnel Partners, which also includes Dragados-USA; the Seattle Tunneling Group is a consortium of S A Healy and FCC Construccion, SA, with design by Parsons Transportation Group and Halcrow.)

Keep in mind that, as TunnelTalk reports, “Specifications within the bid documents are minimal. Much of the means, methods and risk mitigation measures are left to the expertise and preferences of the pre-qualified design-build bidding teams.”

Projected tunnel costs have already increased by $60 million, so with this latest news, WSDOT’s Cost Estimate Valuation Process has been on the low side by around $300 million on a $2.1 billion project.

Yes, the contingency and risk fund was included in the original estimate, but what we’re seeing is that contingency and risk have eaten up half that fund a year before a single clod of earth has been moved. That’s not a good sign; what’s also not a good sign is that you can’t seem to find a single tunnel proponent who is bothered by it.

They should be, because the merits of the project aside, the deep-bore tunnel could see a funding death by a thousand cuts. The state has resolutely capped its contribution to the entire $4.24-billion project at $2.8 billion (leading to a contentious debate over whether Seattle is responsible for any overages). Tolling will be needed to make up part of the funding gap (a tricky prospect, since the higher the tolls are set, the fewer people will use the tunnel).

And the state may have already bitten off more than it can chew. In February, the state’s gas tax revenue was down $168 million for the 2009-2011 biennium. The state’s Office of Financial Management has updated that number, and the decline has continued. Some $1.8 billion of tunnel funding is supposed to come from gas tax increases passed in 2003 and 2005, but over the entire 16-year forecast horizon for gas tax revenues, the forecast for September 2010 is down almost one percent ($180 million) from the June 2010 forecast. All transportation revenues are off almost $1 billion over that period.

Essentially, the needle on the gas tax gauge keeps dropping before we’ve gone anywhere–and gas tax “collateral” is critical for backing the debt the state wants to incur for all mega projects coming up.

Still to come: The two teams will submit their bids on October 28, but only the technical proposals will be considered first; the financial side will wait until December 23. (Really, the design for Halloween and the bill for Christmas?) The reason for the lag is that the teams will get “credits” for cost-savings and other innovations in their design proposal that can be subtracted from what they have determined the final cost will be.

Then from January until August 2011, the winner of the bid process will get a head-start on “project neutral” work, since the Environmental Impact Statement won’t be approved (or not) until then.

5 thoughts on “Deep-Bore Tunnel Bids, Arriving for Halloween, Get Early Treats from WSDOT

  1. I know that I will almost never use it. I drive less, so I use less gas, so I will not pay for it that way. The people who will use it are the ones that I see stuck on I-5 every evening trying to go north or south, spending a hour to get through downtown. I am sure some of those moms and dads who need to beat the 6pm nanny extra charges will give five or ten bucks to get home on time. That is who will pay. The higher the fee, the less it is used, the more beneficial it will be to those who need it.

  2. Where did my earlier comment disappear to? To conclude the cut/cover as the only sensible tunnel option is too intriguing, provocative? GMAB

  3. Sorry, Wells. I guess it’s been etherized. I just checked our spam flagger and didn’t see it there, so your comment has vanished on us. If you feel up to it, give it another shot.

  4. The DBT is poorly engineered for managing traffic; the traffic will incur terrible impacts to public health and safety; the risk of constructing the DBT is insane and it’s the more expensive tunnel option constructed successfully or after various setbacks.

    Picture water running along the outside of the tunnel under pressure in the path of least resistance, up and down, at first a trickle then a steady stream carrying away soft soils over time wearing away miles of tunnel joints and forming voids and sinkholes.

    Picture the cut/cover tunnel creating the strongest seawall and “boxing” in the soft soils, solidifying them from deep down to the surface.

    The cut/cover keeps the Battery Street Tunnel with SR99 rebuilt below Elliott/Western. In an accident, emergency vehicles can reach the site sooner, evacuation is faster, detour traffic is simpler. WSDOT directors care as much about public safety as Seattle business leaders care about its traffic nightmare, ie, not much. Highway Robbers and Parking Garage Moguls.

  5. Pingback: Driving Less to Save Money? State Plans End Run to Your Wallet | The SunBreak