Japan-U.S. Firm Leads Metro Rail Tunnel Bid

For years now, civic leaders downtown have told each other that the Metro Rail subway is essential for Los Angeles to become a “world city” and center of Asian commerce.

Accordingly, a Metro Rail milestone was passed Friday with a major Japanese firm, Ohbayashi Corp., emerging as the leading candidate to dig the first subway tunnel through downtown next year.

Sealed bids for the huge job were read publicly shortly after 2 p.m. Friday, accompanied by gasps and curses from an audience of competing contractors. A joint bid by the M. L. Shank Co. of Denver and Ohbayashi, an international concern based in Tokyo, was the lowest received.

Their price for the tunnel--$26.3 million--was $2 million better than the closest competitor and far below the $38.5 million that was estimated by the Southern California Rapid Transit District, which is in charge of building the subway.

Number of Complaints

The low bid set off unprintable grumbling among some of the competitors, who have become increasingly frustrated as Japanese firms underbid American contractors for more and more domestic jobs, including several large projects in Los Angeles.

“Quite frankly, I am surprised to see one (bid) this low,” said James Crawley, director of engineering transit facilities for Metro Rail. “Needless to say, we are pleased.”

Before the contract is awarded to Shank and Ohbayashi, RTD officials must be persuaded that the firms can actually handle the job. The first Metro Rail tunnel will be excavated from 5th and Hill streets downtown to below Flower and 7th streets, and will take more than two years to complete. The job will be the first underground work on the first phase of the transit line, to be built from Union Station to Wilshire Boulevard and Alvarado Avenue by 1992. There are plans to extend the line in later years to North Hollywood.

Qualifications Met

Shank and Ohbayashi appear to meet all qualifications, including a requirement to use American products and hire a guaranteed percentage of minority and female subcontractors. The appointed RTD board has scheduled a vote on the bid next month.

The two firms are currently working together in Phoenix, digging a $50-million storm drain tunnel. Metro Rail would be their second joint venture, project manager Jerry Stokes said Friday in Los Angeles.

Ohbayashi is one of Japan’s largest contractors and in recent years has won several large American jobs by bidding below domestic contractors.