Overruns Climb to $538 Million for Metro Rail : Transportation: The upward revision is the second this week. Federal and local agencies blame each other.

Los Angeles County transit officials said Friday that construction of the first 4.4-mile segment of the Metro Rail subway is running $200 million over budget, marking the second time this week that cost overruns have been disclosed.

The total cost for tunneling the railway more than 17 miles from downtown Los Angeles to North Hollywood has spiraled $538 million over budget so far, Los Angeles County Transportation Commission officials said.

That is 16% higher than the $3.3-billion price tag officials initially put on construction of the subway.

The disclosure, which followed reports earlier this week that total cost estimates had climbed $338 million over budget, alarmed transit officials who fear that other transportation projects in the county may suffer.

Rail experts say that competition for transportation funds is fierce and that the Metro Rail cost overruns will jeopardize funding for other projects, such as the ambitious commuter rail network envisioned for Los Angeles County and beyond.

“The $200 million (cost escalation) will certainly impact funding for our 10-year rail plan,” said Linda Bohlinger, a financial expert for the Transportation Commission. Every extra dollar going to Metro Rail must come from budgets for other projects, she said.

As the price tag grows, so does bureaucratic bickering over who is to blame.

All sides agree that delays in funding and construction ran up the cost. But whether the delays were the fault of the federal government or Los Angeles County is a source of contention.

While county authorities lay the blame at Washington’s doorstep, federal officials point to an ongoing power struggle between the county’s two transit agencies.

Transportation Commission officials say the U.S. Department of Transportation slowed construction of Metro Rail by dragging its feet on funding and imposing restrictions on the project.

But in Washington, federal officials said the delays were caused by the long-running squabble between the Southern California Rapid Transit District and the Transportation Commission over which agency had authority over Metro Rail’s construction.

Rick Centner, deputy director of the Urban Mass Transit Administration, said the delays were the “result of local policy makers being unable to resolve disagreement over which agency would manage the Metro Rail construction.”

The federal transit agency was unable to sign off on a funding agreement until it knew which county organization was building the second phase of the project, Centner said.

Initially, the RTD was responsible for constructing the first 4.4 miles of the project under the center of the city. But the commission stepped in and--after a lot of wrangling between the two agencies--took over construction supervision in July.

The takeover was prompted by a 1989 audit that revealed that under the RTD’s direction, the project was two years behind schedule and $135 million over budget. The report released Friday increased that amount by $65 million, bringing the total overrun to $200 million for the subway’s first 4.4 miles.

Commission officials acknowledged last December that the jurisdictional fight had set back construction on the second phase of the project by at least six months. They admitted at the time that the delay would prove costly, at $20 million a month.

“Time is money,” said Neil Peterson, commission executive director. “If we can’t make up for lost time, (the delays) could cost as much as $120 million.”

Metro Rail’s cost overruns will also affect funding for the commission’s $7-billion plan to build a five-county network of subways, inter-urban trains and light-rail trolleys.

Metro Rail is being funded jointly by federal dollars (46%), state money (13%) and local taxes. The city of Los Angeles is paying 7% of the costs, county taxpayers have a 30% share and businesses along the subway route are being assessed 4% of the cost.

The rest of the rail network is being funded primarily by a one-cent sales tax that raises $800 million a year to fund bus systems, build bus- and van-pool lanes and finance other transit projects, including the network.

Metro Rail is costing $224 million a mile to build, reports show. Cost of the first 4.4-mile phase is up to $1.45 billion and the final 13 miles will cost $2.45 billion. The subway will not start running until the year 2001, three years behind schedule, officials said.

Controversy over how to complete the final 13 miles has caused major delays in the project, Bohlinger said.

The federal government has insisted that the commission divide the final stage into two parts and build each separately. And the Urban Mass Transit Administration has funded only the first 6.7 miles from downtown to Hollywood Boulevard and Vine Street, Bohlinger said.

Because of this, the commission was forced to “push our time line out” a year or more, she said. That delay will add $315 million to project costs, she said.

Centner denied that the federal transportation department was responsible for these delays. He said the decision to split the work into two sections was made by the commission.

Congress will have to appropriate $667 million or so next year, and a new federal funding agreement will have to be negotiated before the final 6.3 miles to North Hollywood can be built, officials agree.

No matter what happens, Metro Rail will be built, even if it means the county must come up with even more money in cost overruns, Bohlinger said.

“Metro Rail has top priority, we are committed to finishing it, even if the federal share is diminished,” Bohlinger said.