Tutor-Saliba Recommended for Alameda Corridor Job

The agency in charge of building a rail expressway to serve the county’s fast-growing ports recommended Thursday that a venture headed by Tutor-Saliba Corp. be awarded a $712-million contract to construct the costliest phase of the Alameda Corridor project.

Tutor-Saliba, which has been linked to some of the most serious construction problems associated with the Los Angeles subway system, outbid two other teams of contractors for first crack at the job. Bechtel Infrastructure Corp. and Kiewit Pacific Co. submitted bids of $760 million and $783 million, respectively.

In August, the board of the Alameda Corridor Transportation Authority decided to begin negotiations with the Tutor-Saliba team after reviewing the three bids, which were sealed until Thursday.

“This is probably the most important contract that ACTA will be dealing with during the course of construction,” said James C. Hankla, the agency’s chief executive officer. “Negotiations went relatively smoothly. We are off on a very good foot at this time.”

After six weeks of talks, the corridor agency issued a notice of intent to award the contract to the consortium headed by the Sylmar-based company. The notice is tantamount to a recommendation from the corridor authority’s staff to the board of directors. It also gives Bechtel and Kiewit a chance to review the bid documents and protest the bid.

The corridor authority’s board is scheduled to vote on the final agreement on Oct. 8.

Tutor-Saliba is one of the largest construction employers in Southern California. The firm has worked on such projects as the San Francisco International Airport, the Oakland-Alameda County Coliseum and the Bay Area Rapid Transit system, known as BART.

However, its record on the Los Angeles Metro Rail project has been marred by serious construction flaws, cost overruns and fatal accidents.

Under terms of the corridor authority’s contract, the Tutor-Saliba team will be responsible for designing and building a 10-mile-long concrete trench, which will be three stories deep and contain two railroad tracks.

Overpasses will replace existing railroad crossings to eliminate the bottlenecks now caused by passing freight trains. The corridor authority originally estimated that the trench and related road improvements would cost up to $800 million.

Overall, the enormous rail and street project will extend for 20 miles on Alameda Street from the county’s ports to intercontinental freight yards near downtown Los Angeles.

The Tutor-Saliba venture originally bid $731 million for the trench section, corridor officials said, but negotiations resulted in several cost-cutting measures on technical aspects of the project, which reduced the price to $712 million.

Hankla said the talks were handled in a businesslike manner with well-defined issues. He added that there were no major disagreements with Tutor.

Corridor authority general manager Gill V. Hicks said the agency came out better with respect to its job training program for people in economically depressed cities along the corridor’s route.

The contract, Hicks said, should increase opportunities for the disadvantaged to work on the corridor project. “I was pleased with Tutor’s willingness to cooperate,” Hicks said.

In addition to Tutor-Saliba’s contract, other key elements for construction of the enormous public works project are beginning to fall into place.

Today,the Los Angeles Board of Harbor Commissioners is scheduled to consider a long-awaited agreement with two major railroads, Union Pacific and Burlington Northern Santa Fe, that will set their fees and conditions for hauling cargo on the corridor.

According to a report by the federal General Accounting Office, the corridor authority had originally planned to have the railroad agreement finished last April.

Hankla said the negotiations with the railroads were “difficult, to put it mildly.” But he said the five-month delay should not interfere with the project’s main construction phase, which could begin later this year.

Corridor officials say the railroad agreement is critical to the agency’s plan to finance much of the project’s construction through the sale of revenue bonds. Underwriters, they say, will now get the chance to analyze the project’s future source of income.

Harbor commissioners also will consider increasing the amount of money the corridor agency can raise through bond sales from $800 million to $1.3 billion.

Corridor officials said Thursday that they might need more cushion in their borrowing capability in case of unforeseen costs and construction problems.

“When you dig in the ground, a lot can go wrong,” Hankla said. “We think we have things nailed down, but you never know. If there are unknowns, we will have the ability to issue more bonds without getting further authorization from the board.”

Bond sales were scheduled to begin in November, but the sale date has been postponed until February. Hankla said the delay is not significant and that the construction schedule is still intact.

Once the Los Angeles Harbor Commission votes on the railroad agreement and debt ceiling, the items will go before the Long Beach Harbor Commission on Monday and finally to the corridor authority’s board in October.