After reading recent articles in the news regarding PPP (Public Private Partnerships), I’ve come to the conclusion that not only do the private companies involved in tunnel construction probably live by the motto “Do we, cheat him, and how!” but there is a big possibility the politicians that sign off on these projects are conspiring to hide the true costs.
Summary of articles
The issues of Seattle’s Big Bertha stoppage, lowball bid, cost overruns were foreshadowed in our own Red Line tunnel construction. It appears a clever way has been devised by Municipalities and construction co’s to circumvent an honest bidding process. One commentator on an article stated that Govt. entities “pair down the job scope in a effort to keep the budget in line with funding…. the contractor knows what it will take to do the job right…but if he bids the job accordingly he loses the bid. So he bids according to minimum scope and waits for the engineers to fix the problems to make the project right….”change orders” come flooding in”. Tunnel companies invest in lawyers who work with these type of loopholes in this process.
As one of the articles points out, some politicians heading entities like Metro monetarily benefit via political contributions etc. It was also pointed out that in the case of Boston’s Big Dig, there was a conspiracy by the “project officials and Bechtel-Parsons” with “state officials and the Federal Highway Administration” to hide the the true cost of the project from the public. It sounds like this “minimum job scope” approach for the bidding phase is intentionally created or allowed by corrupt politicians/Metro boards/entities involved in overseeing the projects for the benefit of the tunnel contractors who take full advantage of the loopholes provided, upping the final costs to many times over their original ridiculously low bid…all along, using the legal system to deflect liabilities onto others (taxpayers).
In their lawsuits, the tunnel companies also seek reimbursement for delays and interest on late payments from the tax payers, which in past cases like the Big Dig and the LA Red line, has doubled the cost overages.
This is my prediction for the 710: The company that bids on the 710 tunnel conspires with political/Metro entities and wins it for the low ball (fantasy) bid of $2.81 (maybe 5b, but definitely under 8 billion)…then taxpayers will probably pay an extra $17b to 21.2 billion in change orders, legal expenses and interest, by the the end of the project and the lawsuits that follow.
This formula for corruption (excuse me, I meant business) works so well they get away with repeating it project after project. Should a lawsuit go to a jury trial and be decided against the construction co., no problem, the co keeps appealing till it reaches a superior court judge who decides the case in the contractor’s favor.
In other words if you want a project built that the taxpayers would never approve based on how expensive it will be, use private companies instead that can eventually sue taxpayers as a way to pay for the project – hence the real reason PPP’s were created.
– Carol K. (contributor)
The articles below cover the topics of:
1) MTA, and tunnel contractor history.
2) Follow the money into political pockets.
3) Actual conspiracy to hide the true cost, “pair down the job scope” and “lowball bids” a.k.a. one tunnel, not two 😉
4) How Tunnel construction co’s use “change orders” to reimburse themselves for the “true amount” the bid should have been. Then tack on reimbursement for “delays and interest” on late payments – doubling the cost of the “overages”.
5) How private contractors aggressively use the legal system against taxpayers deflecting the liabilities onto them.
- No Light at End of the Tunnel : Subway: Contractor digging Red Line route through the Hollywood and Studio City hills faces critical tests, key questions about safety.December 21, 1995|JON D. MARKMAN | TIMES STAFF WRITER, 3 pages, http://articles.latimes.com/1995-12-21/local/me-16344_1_red-line-route
- HR 2104 (Filner) “Safety, Efficiency and Accountability in Transportation Projects through Public Inspection Act” Disaster Examples http://www.nashtu.us/download/HR%202104%20-%20Disaster%20Examples.pdf
- Taken for a Ride: Parsons Brinckerhoff Expose, http://digital.library.ucla.edu/websites/2008_993_087/page/taken1.html, By Tara Servatius (2008) Note: This article from 2008 quotes The total cost at that time for the Big Dig as 14 billion, now it’s reached 24 billion.
- Tunnel partner known to fight tough with public agencies, By Mike Baker, Seattle Times staff reporter, Originally published April 27, 2014 at 7:59 PM | Page modified April 28, 2014 at 12:17 PM, http://seattletimes.com/html/localnews/2023475883_berthatutorxml.html
- Front-runner to build SF subway station has history of cost overruns, by Zusha Elinson — August 9, 2012, 12:00 a.m. http://californiawatch.org/money-and-politics/front-runner-build-sf-subway-station-has-history-cost-overruns-17493
- Comment on the article, https://www.baycitizen.org/news/government/front-runner-build-sf-subway-station-has/
- Seattle Tunnel Partner Wins $80 Million Dispute Over Boston’s Big Dig, By JOHN RYAN, 9:58 AM MON JULY 21, 2014 http://kuow.org/post/seattle-tunnel-partner-wins-80-million-dispute-over-boston-s-big-dig