Hey, remember that giant, five-year construction project on the 405 freeway? The one that was supposed to alleviate traffic by adding a carpool lane through the Sepulveda Pass, but doesn't seem to have done anything?
Well, about that. The project has been finished for 18 months, but the price tag is still going up. On Thursday, the Metropolitan Transportation Authority approved an extra $103 million payment to the contractor, Kiewit Corp., to compensate for delays and additional work.
That pushes the total budget from $1.2 billion to $1.3 billion. That's a lot of money, which perhaps could have been better spent on a rail tunnel under the pass. But at least it's over now, right?
Well, no. Kiewit still has another pending claim for an additional $400 million. That one is now in arbitration, which is scheduled to wrap up sometime around February 2017.
According to Kiewit, the project was a giant fiasco. It was beset by delays in relocating utilities and underground infrastructure. A retaining wall collapsed and had to be redesigned and rebuilt. Kiewit blamed MTA for not approving changes quickly, and for not coordinating with other agencies on utility relocations. Kiewit claimed the overall scope of the project doubled by the end.
The project was built under a design-build contract, which is supposed to keep costs in line by making the contractor bear the risk of overruns. That obviously didn't work out. It also was supposed to reduce congestion, but according to Inrix, the northbound commute is actually a minute longer during rush hour. Transportation planners call this “induced demand.” Added capacity leads more people to drive, resulting in no net gain in speed.
Maybe transportation projects should have a money-back guarantee, in case they don't actually reduce congestion.
So what will the price tag end up being? Not clear, but MTA CEO Phillip Washington, who just came on board, is now trying to speed along the second arbitration.