MTA Subway Tunnel Costs Soaring 44% Over Budget

The Metropolitan Transportation Authority’s recent efforts to curb sinkage along the Lankershim Boulevard subway route have knocked the segment’s construction costs 44% over budget--with two-thirds of the work still to be done, according to documents released Friday.

The contract to build twin subway tunnels from Chandler Boulevard to Universal City was won in 1994 by Japan-based construction giant Obayashi Corp. with a low bid of $65.4 million. But the unanticipated need for a resinous, ground-hardening compound called chemical grout has vaulted the cost of the job to $94.3 million, the documents show.

By comparison, construction of the entire downtown segment of the Red Line subway cost 32% more than budgeted when finished. And the Wilshire Corridor/Hollywood Boulevard segment, which is not yet complete, has come in at 16% over budget to date, according to the MTA.

The North Hollywood tunneling is part of the third phase of Metro Rail that extends the subway to the San Fernando Valley. Through April 2, according to the MTA, the job was 29% complete, though digging is 75% finished.

“A 44% overrun is a huge number, especially since the MTA is calculating it in the most conservative way,” said John F. Shea, an excavation expert who is president of the construction firm that tunneled under Hollywood Boulevard. “But I don’t think that they have any choice.”

Shea said he believes that the overruns reflect a new set of priorities at the MTA that values the prevention of ground settlement over cost. “The philosophy used to be that it was more economical to pay for street settlement than for chemical grout, which is prohibitively expensive,” said Shea. “But the adverse publicity and property owner lawsuits have changed their mind.”

An excavation expert told MTA board members last week that the transit authority could have saved 90% of the cost of grouting by demanding that its contractor use a type of tunnel-boring machine that puts upward pressure on the tunnel’s walls.

University of Alberta civil engineering professor Dan Eisenstein, appointed by Los Angeles Mayor Richard Riordan to lead a subway-construction review panel, said Obayashi’s “open-shield” machine is seldom used anywhere in the world for digging in loose, sandy soil because it permits too much surface settlement.

According to sources, the MTA’s construction management team opted for the $2.5-million open-shield machine because it was expected to cost half as much as the “positive-face pressure” machine Eisenstein recommended. It also moves faster and allows geologists to see the soil better.

But the agency could have purchased four of the better machines for the amount is has spent on chemical grout.

On Wednesday, MTA executive construction officer Stanley G. Phernambucq will seek board approval to spend $2.2 million for chemical grout to stiffen the soil in front of tunnel-boring machines that are making slow progress.

It will be Phernambucq’s fourth trip to the board to request money for the glue-like material that fills voids in the ground that might otherwise cause concrete floors of buildings to sag and crack. In July, he asked for $2.2 million in grout, then sought $4.7 million in August and $12.5 million more in October.

Even worse than the expense of grout is the inconvenience it causes. It is mixed in towering metal vats that have blocked businesses on Lankershim Boulevard for a year and is then injected 60 feet underground with a high-pressure roar that has scared away customers and left a residue of fine white powder on cars and inside offices.

Several business owners along Lankershim Boulevard said they have been forced to close as a result of the mess and din of grouting alone, while at least three others have been forced to close due to the unsafe appearance of cracks in their floors.

Phernambucq said the transportation agency would try to make the contractor, Obayashi Corp., pay for the cost overruns because the company made a “low-ball” bid and may have failed to dig properly.

Indeed, the next lowest bidder proposed to do the Lankershim job two years ago for $10 million more than Obayashi, or $75.4 million. Shea bid $83.7 million. The MTA’s own cost estimate for the job was $90 million.

In an interview Friday, Phernambucq said he was “not dissatisfied” with Obayashi’s work, but had become “very, very intolerant” of any surface settlement that might harm buildings.

“Wisdom tells you that if you can avoid a problem by going a different direction, you should do it,” he said. “It’s like Yogi Berra said, ‘When you get to a fork in the road, take it.’ ”

MTA board member Nick Patsaouras, who runs an electrical contracting business, objected to the agency staff’s vilification of Obayashi. He believes the MTA is at fault for not specifying the best machine for the job in its contract bid documents.

“The contractor cannot do anything he wants to,” said Patsaouras. “He either did it because the contract specifications allowed him to, or the construction manager allowed him to.”