High-speed rail project vastly underestimated cost of relocating utility lines beneath Fresno

Buried beneath Fresno were some costly surprises for the California bullet train authority, which disclosed Tuesday that the price of utility relocations along a 29-mile section of railway has surged from a 2013 estimate of $69 million to $396 million.

Although it was known that moving gas lines, sewer pipes, water mains and communications wire to make way for the route would be more expensive than originally expected, the magnitude of the increase — nearly a six-fold jump — puts into better focus why the project’s costs are rising so sharply.

The California High-Speed Rail Authority board on Friday took up the problem, hearing from its staff that the original estimate contained a number of miscalculations.

The number of linear feet of utilities that have to be moved was underestimated, as was the cost per foot for the job, according to a staff memo. Then, there were utilities that nobody even knew were in the ground. The authority changed its mind about some of the work, as well, the report said.

The original cost estimate was based on work performed by the rail authority’s regional consultant, the staff memo said. It did not identify the company, but rail authority records indicate the regional consultant from before 2013 through at least 2015 was Los Angeles-based Aecom. By 2017, the company was no longer on the job. The company did not have an immediate response when contacted.

The history of the utility relocations suggests some turmoil in management decisions — which the rail authority staff said it would not repeat in the future.

The original plan was to have AT&T and Pacific Gas and Electric Co. move their own equipment, rather than allow the main construction contractor, Tutor Perini, to do the work.

After getting started, however, the two utilities came back and told the rail authority that they were having trouble meeting the schedule. So, the rail authority handed the job to Tutor Perini in February 2017 and increased the budget to $159 million.

By September 2017, the rail authority arrived at a new cost estimate of $396 million, which was not made public until Tuesday. The price hike is part of the $2.8 billion in cost increases for the Central Valley work that were disclosed in January and were incorporated into the draft 2018 business plan released last month.

The higher costs would deplete the budget for the utility relocations by April, according to the staff memo. So the board approved moving $40 million from a future contract reserved for installing track in the Central Valley to cover the utility work in Fresno. That $40 million will fund the utility work until July, the memo said.

The staff said that “best management practices,” along with a new database, will enable it to better estimate costs in the future. “Additionally, the assumption that utilities will perform relocations will not be repeated,” the staff memo said.

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