3 Contractors Submit Bids on Trench for Alameda Corridor

Three teams of contractors--two of them associated with the Los Angeles Metro Rail--submitted bids Wednesday to build the largest and most critical part of the $2-billion Alameda Corridor project, a 10-mile, concrete-lined trench that will help trains and trucks speed to and from the county’s ports.

Meanwhile, three other consortiums interested in bidding on the project failed to turn in proposals to the Alameda Corridor Transportation Authority, which is overseeing the effort. Representatives from two of the groups said they considered the undertaking too risky and difficult to complete on time.

Delivering sealed bids at the authority’s Carson office by the noon deadline were teams of large construction firms headed by Bechtel Infrastructure Corp., Kiewit Pacific Co. and Tutor-Saliba Corp.

The ventures are competing for a contract to build the main phase of the Alameda Corridor, which will eventually stretch 20 miles from the county’s two ports to rail yards near downtown Los Angeles. The authority estimates that the submerged track bed and roadway alone may cost up to $800 million.

Corridor proponents, including Mayor Richard Riordan, have said the project is crucial to the region’s economy and continued participation in Pacific Rim commerce.

The authority’s top officials either could not be reached for comment Wednesday or declined to discuss the bids. Veronica Soto, an agency spokeswoman, did say that obtaining the proposals represented “a major milestone” for the authority.

The teams that dropped out of the running were led by Odebrecht Contractors of California, Morrison Knudsen Corp. and Fluor Daniel, some of the biggest heavy construction companies in the world.

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Representatives from two of the companies said they considered the undertaking far too risky for their firms, given the tight schedule to complete the project by the end of 2001.

They said they did not like the authority’s requirement that the contractor share the financial liability for any costs and delays that might result from unanticipated problems.

“There were no normal time extensions for unforeseen problems or unknown factors,” said Jim Dastur, a vice president and division manager for Traylor Bros., a member of one venture that dropped out of the running.

The corridor authority wants the route completed by 2001 so it can generate revenue in time to pay the interest on more than $1 billion in debt.

“The time frame is too ambitious for us,” said Mike Kenney, a spokesman for Dillingham Construction, which was part of the Odebrecht consortium. “The corridor authority is asking a lot. You need real deep pockets to do this thing.”

Dastur said the schedule could be disrupted by a number of things such as unexpected pockets of hazardous waste along the route that would have to be removed.

Corridor officials estimate that the trench section of the project could cost $500 million to $800 million. If the bids, details of which are known only to two authority officials, are more than the ceiling price, the corridor authority’s seven-member board will have to reassess the project and determine if more financing is necessary.

Dastur of Traylor Bros. guessed that the bids might be around $800 million or higher because of the risk that will have to be assumed by the trench builder.

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Despite the potential pitfalls, representatives of the consortiums that bowed out expressed confidence that the contenders have the ability and financial strength to complete the job on time.

All three bidders are national or multinational construction companies that have had success building costly public works projects, such as convention centers, airports, rail lines and highways. Each of them, however, is now mired in controversy over their roles in costly transportation projects.

Tutor-Saliba, which is based in Sylmar, has been involved in some of the worst construction problems encountered by the Metropolitan Transportation Authority in its ill-fated attempt to build the Metro Rail subway system.

Among other things, the company has been cited repeatedly for inflated expenses, worker safety violations and building tunnel walls out of alignment or thinner than specified.

Ron Tutor, president of Tutor-Saliba, said his company did not have any problem with the subway and declined to comment on the Alameda Corridor bid.

Kiewit Pacific is the West Coast division of Kiewit Construction Co., based in Omaha. Kiewit Construction was a financial partner in Shea-Kiewit-Kenny, a consortium responsible for building the Hollywood leg of the $6-billion Metro Rail project.

The MTA fired SKK from the project in July 1995 after construction triggered subsidence of up to 10 inches along Hollywood Boulevard and led to a huge sinkhole.

In the aftermath, hundreds of claims and lawsuits against the MTA by property owners were filed. The federal government temporarily halted funding, and the MTA and SKK sued each other in civil court. SKK has denied any wrongdoing.

Kiewit officials could not be reached for comment.

Bechtel Corp. and Bechtel Infrastructure have been embroiled in controversy over enormous cost increases and delays related to a major highway and tunnel project in Boston known as “Big Dig.” Bechtel has been a prime consultant on the project.

The estimated cost of Big Dig has risen dramatically from $2.56 billion in 1985 to $11.6 billion in August 1997. Consultants hired by the state of Massachusetts to evaluate the mammoth project concluded in 1995 that mismanagement by the state and Bechtel was at the root of many of the delays and cost overruns.

Leamon Abrams, a spokesman for Bechtel Infrastructure, said the cost increases in Boston were attributable to changes in the design and scope of the project, not because of Bechtel’s management.

State Sen. Tom Hayden (D-Los Angeles), who serves on the Senate Transportation Committee, said the controversies underscore the need for an independent inspector general to oversee the project. Hayden introduced legislation to create an oversight body but the measure was defeated in April.