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SR 99 Deep Bored Tunnel Costs – Radio Transcript

TRANSCRIPT:  THE DAVE ROSS SHOW: NEW TUNNEL REPLACEMENT FOR ALASKAN WAY VIADUCT.  KIRO 97.3 FM

INTERVIEW WITH BRUCE AGNEW – AIRED 10:00 A.M., APRIL 28, 2009

Dave Ross: Time for the news.  This is the Dave Ross Show, News Talk 97.3 KIRO FM. 

**Theme Music**

It’s 10:37.  NewsTalk 97.3, K-I-R-O FM Seattle.

The legislature adjourned and one of the things that they did was confirm that we’re indeed going to build that deep-bored tunnel which would take the place of the Alaskan Way Viaduct.  The Viaduct will stay up until that tunnel is built, which tells me that Viaduct ain’t never coming down.  But it immediately brought predictions of cost overruns and I put that to the Governor when we talked to her yesterday, and here’s what she had to say.

Dave Ross:  It was said last week by a couple of people involved that there will not be any cost overruns on that tunnel.  This is a tunnel that’s going to be what, at some points 200 feet deep I think.  They have no idea what’s down there.  Are you comfortable with the idea that there will be no cost overruns on that tunnel?

Governor Gregoire: Well here’s what they’ve done: a panel of experts recommended to us that we have a risk pool of money so what’s in the cost estimate now is 27% that we don’t feel will need to be spent, but in case there’s a cost overrun, the money is there.  So I think there’s a misunderstanding of what people were saying.  They weren’t saying there won’t be any cost overruns.  What they were saying is that we’ve accounted for that by 27% in a risk pool inside the cost estimate.  Does that make sense?

Dave Ross: Yes, I guess, except if you accept 27% as a reasonable amount of money for a cost overrun for a project of this size.  You’ve seen the history of construction projects, not just in this state, but every place.  Sometimes they double.  I mean if that happens, who pays?

Governor Gregoire: But the point here is, we took what the experts advised us and went even further.  So the experts, the experts, told us we didn’t have to have that big a reserve, but we made sure in our cost estimates we had that big a reserve.  No one can predict the future in terms of costs of material and so on, but I think the Transportation Department has done a very responsible job in their cost estimate.

Dave Ross: Okay, well we’re out of time.  You have the names of those experts in case you have to call them back in ten years, right?

Governor Gregoire: Absolutely, Dave.

Dave Ross: One of those names is Bruce Agnew of the Cascadia Center.  Bruce, I think it’s fair to say that the whole tunnel idea was dead until you guys resuscitated it.

Bruce Agnew:  Well, we did bring some international experts who’d had experience in building tunnels in Shanghai, Madrid, and North America and they told us that the tunnel would be around a billion dollars and I agree with the Governor.  The DOT added a 27% contingency, and they’re currently at 1.9B for the tunnel.  So if you look at worldwide experience in tunneling and advances in technology, the Governor’s figures are absolutely correct.  The other important factor is that the DOT decided to go with a single bore versus a double bore, which means less labor, less materials and one machine versus two.  I think the other factor that you may want to focus on is what’s happening in the construction world these days.  Sound Transit’s bids on the Beacon Hill transit tunnel came in about 22% below estimate and just, I think it was last week, San Francisco BART’s bids on a tunnel came in at 45% below the engineering bids and there were five bidders.  So there’s a very hungry environment for contractors and the sooner we get this bored machine going, the better we’re going to be.

Dave Ross: You know, this good news on transit construction is almost classified information.  I never hear this.

Bruce Agnew: Well, it’s a small group of people.  I’m surprised the public agencies don’t talk about it a little bit more.

Dave Ross: I’ll tell you why. It’s because they’re worried about getting burned.  They’re worried about the tape being saved and then replayed back when it turns out that costs are twice as much.

Bruce Agnew:  Well, the other factor, Dave, is the incredible advances in technology.  These things are highly computerized, they can take care of difficult soils and water pressure.  The advances in technology in the last ten years are astounding.  I think that’s why the DOT and the project team felt comfortable in the end recommending the tunnel.  It’s because of these incredible advances in technology.

Dave Ross: So you also agree that the 27% built into the budget is adequate to take care of any cost overruns that might occur?

Bruce Agnew: Well, yes, from that perspective.  But you also have to take a look at time, which is an element of cost.  The Alaskan Way Viaduct is about 9,000 feet in distance and if these boring machines can get going fairly quickly at 30 feet a day, that’s 270 days of boring and the DOT has also put in a cushion of 100 extra days in its budget and contingency schedules.  So I think both in terms of the advanced technology, the low bids that are coming in, the fact that we’ve built tunnels downtown.  You know the 1906 Burlington Northern Santa Fe tunnel is still operating effectively.  In 1987 we completed the downtown transit tunnel.  We know the soils in downtown Seattle.  I don’t suspect that we’re going to…

Dave Ross: Do you know that deep, though?

Bruce Agnew: It depends how deep they go and they’re not sure.  They’re looking at 100-200 feet and our consultants’ team, led by ARUP which is a worldwide company, has recommended that they go shallow because you have less water pressure.  I think, as the engineer this thing in the next year or so, they’re going to have to make some decisions on routings and depth.  Obviously they’ve got to clear the underground parking garages.  But again, there’s a bunch of data from individual builders about soil conditions because we put some huge parking structures underground in this small area downtown.

Dave Ross: Are they actually going to go under buildings?

Bruce Agnew: Well, they’ll have to in some cases.  Now, again it depends on the alignment.  The DOT really has to answer that question.  I’m sure they’re going to try to follow streets, like whether its 1st or 2nd Avenue because they’re going to run into fewer conflicts, but there’s also a major sewer line that crosses diagonally the route, so there’s some factors to consider.

Dave Ross: As you’ve mentioned, there have been deep-bored tunnels done before, in Beacon Hill, yes.  But in Beacon Hill, that’s mainly residential.  There are no gigantic buildings you’re going under for that tunnel.  Has it ever been done?  Has a tunnel this large ever been bored under a major urban area before?

Bruce Agnew:  Absolutely.  Shanghai, Madrid, Paris.  They’re looking at a deep-bored tunnel for a Port of Miami and the I-710 freeway in Los Angeles.  That’s why I think the DOT and the project team came around on this is because they got the information about the 20 projects that are currently underway around the world and those that have been completed on time and on budget.  The average costs of those was somewhere around 350 million dollars a mile so even if you take a look at the DOT’s budget, which estimates it would be about 1.17 billion per tunnel-mile, there’s a lot of fudge factor built into that.

Dave Ross: Well, that all seems like the kind of good news you never hear on a transit project.  When do you think it could start?

Bruce Agnew: Well, the DOT has to answer that.  They’ve got to go through an EIS [Environmental Impact Statement] process.  They’re hoping to get this thing going by 2011 and completed by 2015, I understand.  And of course depending on how much they can speed up the environmental process and do some more drilling for test holes is going to speed up that program.  But we obviously think that this is the right decision and I applaud the DOT for coming around on it.  I guess the other point I would make to your listeners is that you got to take a look at the history of our state DOT in the last five to ten years in terms of bringing projects in on time and on budget.  You look at the Tacoma Narrows Bridge, the I-5 widening in Everett which were built under a new design-build procedure which brings in the talent of the private sector early on.  Those are good examples, albeit they’re highway projects, but they’re good examples of the management of this DOT in terms of bringing these projects and that story isn’ told enough, I think.

Dave Ross: You are complimenting the DOT on bringing things in on…  You’re a conservative think tank, right?

Bruce Agnew: Well yes, so we applaud government efficiency.  And as someone who has a beach cabin up north in Snohomish County, I go through Everett all the time and it’s just remarkable what that widening project has done in terms of traffic flow through Everett.  It’s great to see that.

Dave Ross: I just want to make sure that you’re not just putting me on here, because as you know I’m probably the only talk show host in this town who regularly tries to find out, you know, the stuff that government does right because I figure that there are enough people slamming it for doing things wrong.  You’re not just pulling my leg?  You’re a member of a conservative think tank who’s willing to state publicly on the air, over your signature, that the DOT lately has been bringing things in on time and on budget.

Bruce Agnew:  Well, the facts speak for themselves.  Take a look at their web site…

Dave Ross: Nobody believes their web site, right?

Bruce Agnew:  Well, but Doug MacDonald put a grey book in and the grey book, which measures – I think you had Doug on your show – measures performance.  They invite comments and its wide open, and our independent looking at it we felt that their data is accurate and we checked this with the contracting community and in fact it’s the case.  Now one other thing I would mention, for those listeners who are still interested in finding out more about the advances in technology, there is a Seattle Regional Tunneling Conference, put on by the Underground Contractors Association on May 4th at the Sheraton and we’re going to have about 100 of the world’s leading experts in tunnel technology here in Seattle for the conference as well as there will be a session with the Washington DOT the next day.  So if you want to get more information you can contact us at cascadiaproject.org, there will be some information on the web site.

Dave Ross: The Underground Contractors Association?  Sounds like a group that you have to pay everything in cash.  Sounds like a tax evasion organization…Underground Contractors Association.  Alright, you’re sticking by your guns.  You’re saying that you can bore this tunnel between 100 and 200 feet down through uncharted territory under a major urban center and there’s not going to be…we have plenty of money to do that.  There’s not going to be a massive, massive cost overrun.

Bruce Agnew:  Well, we’re a think tank.  I’m not an engineering group, but I can tell you the experts we’ve brought in from all over the world have worked with the DOT and the Parson’s folks, the project team, reached the same conclusion.  As the Governor indicated they have reached out to folks around the world who have experience in doing these projects.

Dave Ross: Is it in writing?  Let me ask you, is it going to in writing in the contract that any overrun will be the responsibility of the contractor and their shareholders?

Bruce Agnew:  Well, that’s a question for the DOT and the project management team.  Of course there’s this amendment that passed the legislature about cost overruns being part of the Seattle property owners.

Dave Ross: Yeah, Seattle property tax, right.

Bruce Agnew:  Which I don’t think, I think it’s…

Dave Ross: Although, if you’re correct, who cares since there won’t be any? In fact, actually what you should do is put in a provision so it could go both ways.  If it comes in under budget, the money gets refunded to the Seattle property owners.  They might be willing to take the risk.

Bruce Agnew: That’s intriguing.  The amendment is vague, but necessary to pass the bill this session, as you know.  Enforceability questions have arisen, but the sooner we get the bid the better and we go contain costs and stay on target, so let’s get going on it.

Dave Ross: Alright Bruce, thank you, I appreciate it.

Bruce Agnew:  Sure Dave, thank you.

Dave Ross: Bruce Agnew from the Cascadia Center is sticking to his guns.  He thinks it’ll come…hey, I just thought about it, would you guys take that deal?  I know the people of Seattle are a little upset about that amendment that says any cost overruns would be paid for by Seattle property owners, but you heard what he just said.  He clearly thinks it’s going to come in for less than they budgeted.  So suppose they revised that deal so that it would say that any cost overruns, yes, the property owners pays, but if there are cost underruns, the property owners get a refund? Huh?

It is 10:50, this is the Dave Ross Show, 97.3 KIRO FM where Seattle stays in touch.  I’ll be right back.

**Commercial Break**

10:56, News Talk 97.3 KIRO FM.  An author who went undercover at Jerry Falwell’s Liberty University has a come-to-Jesus moment.  Dori talks about it starting at noon right here, News Talk 97.3, KIRO FM.

Let’s go to Jennifer in Shoreline.  Jennifer, what are you predicting?

Caller 1: Well, I was wondering if they have factored in the possibility of, since they’re going to digging, especially in an area where Native Americans have inhabited for a long time, the possibility of running across some kind of archaeological site of significance and how that will impact things financially?

Dave Ross: 200 feet down?

Caller 1:  They have to get there first, don’t they?

Dave Ross: No, that’s true, you’re absolutely right.  They have to start at the surface.  I would have to think since our own Department of Transportation ran into that along the Hood Canal that they’re prepared for that and will staff the tunnel crew with people who have no idea what a human bone looks like.  Alright?

Caller 1:  I guess that solves the problem.

Dave Ross: I think that would probably be the best way to go about it because otherwise, who knows.  Thank you Jennifer.  Let’s go to John in West Seattle.  John, you’re on News Talk 97.3 KIRO FM.

Caller 2:  Hi Dave, is Bruce still there?

Dave Ross: No, he’s not.  I’m sorry.

Caller 2:  Okay, well I’ll have to pose you this question then.  I’d like to pose them to him.  Who is the prime beneficiary of the tunnel?

Dave Ross: All of us are because it’s been a regional transportation project.

Caller 2: In fact, it is only downtown Seattle, right?

Dave Ross: Depends, well let’s see.  You’re saying that they’re doing this strictly for cosmetic reasons, right?

Caller 2:  Well, you remember late in December of 2007 the Governor and the Mayor and the King County Executive came up with the list of things that had to be studied before a decision was made.  And we had teams of people, they talked to the Council, they went around the City…

Dave Ross: But that was before we found out how cheap the tunnel could be.  I mean, literally, these cost estimates indicate that it is cheaper to tunnel than to rebuild the viaduct.

Caller 2:  I would really challenge that because these people are tunnel advocates and who’s going to pay for all this?  We’ve been asked…I live in West Seattle.   To go to North Seattle or Ballard, I pay $2.80 to go…

Dave Ross: You’re going to pay, the way the law is currently written, you’re going to pay for any overruns.  But you heard my proposal, if it’s going to be as cheap as they say, I think you should be entitled to any under-runs.

Caller 2:  Well overruns, but who’s going to pay for some of the other costs.

Dave Ross: What other costs?

Caller 2:  We’re being asked for utilities out of our utility bills.  Our whole utility budget and there’s a lot of them up 1st Ave.  And that toll…

Dave Ross: I thought that was all taken care of.  Why, has your utility payment gone up already?

Caller 2: They say we’re going to be tagged with that for the construction of a state highway and there’s a lot of those, you heard about that big sewer tunnel didn’t you?

Dave Ross: Well, I don’t think, the tunnel is not going to affect that, right?  I mean…

Caller 2: Utilities are a big cost.

Dave Ross: I think they’re going below all that.  That’s why, I think that’s the reason this is come in so much cheaper, because they’re going below all that.  But in answer to who benefits, the equation changed completely when the price of this tunnel suddenly dropped because of new technology.  And I’ve challenged Tim Eyman, I’ve challenged the Governor on it, they insist that if anything, this is going to be cheaper than they forecast.

K-I-R-O FM, Tacoma, Seattle.