State officials caught off-guard by price of initial construction

Photo provided by John Phelan

The full cost of a set of seven new trolley stations as part of Boston’s Green Line extension is being questioned after a contractor set the cost for the first three stations at more than double the estimate. At $2 billion, the overall estimate may be as much as $1 billion shy of the full eventual cost.

Officials are now considering their options, including renegotiating with the contractor, altering the original plan or even canceling the project entirely. Massachusetts Transportation Secretary Stephanie Pollack commented on the possibility of cancellation in an interview with The Boston Globe: “It has to be on the table until we have a solution. Because what we can’t do is just take the next step without knowing what the whole project looks like. That’s the pressure in every project. I don’t think it’s fiscally responsible.”

A tricky factor with the project is its required compliance under the federal Clean Air Act after the Conservation Law Foundation sued the state in an effort to move the project forward. The plan would offset increased pollution from the Big Dig, another public transit project affected by an under-estimated budget.

Possible reasons behind the price increase were an elevation in risk in the project and Boston’s current hot construction market. One alternative proposed was for the state to offer separate bids on different stages of the project, such as individual trolley stations. Another option would be to restart the procurement for the project, which would cap risk and allow for a different contractor to offer a lower cost.

Boston Agent previously examined the issues when the Federal Transit Administration approved funding for the project late last year, based on the trends from the previous Red Line extension in the 1980s, which saw housing and rental costs increase along the extension’s route.