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Originally published Wednesday, February 16, 2005 at 12:00 AM

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Sound Transit budget on track

No promises at this point, but even critics concede that Seattle light-rail project might be built "on time and on budget."

Seattle Times staff reporter

The low bid on the last major construction contract for Sound Transit's Seattle light-rail line came in 10 percent below the agency's estimate yesterday, increasing the possibility that the mammoth project might be built for significantly less than its $2.44 billion budget.

But Sound Transit is making no such promises or predictions — at least not yet.

Ahmad Fazel, Sound Transit's light-rail director, would only say that "we are on track to build this project on time and on budget." He wouldn't go further.

"It's still early," said Martin Schachenmayr, project control manager; the line isn't scheduled to be finished for four more years.

One of the agency's loudest critics was less hesitant. "Overall, I think they will come in at or under budget," said transportation consultant John Niles, who nonetheless maintains the project is a mistake. "I think they're being very conservative."

PCL Construction, a Canadian firm, yesterday bid $231.7 million to build the southern five miles of the 14-mile rail line from downtown Seattle to Tukwila. Sound Transit had estimated the job would cost nearly $25 million more.

The low bid continued what has become a happy pattern for the agency. The Sound Transit board already has signed nine big construction contracts for all other major components of the project, including trains, tracks, stations and a maintenance base.

All but one of the contracts have been for less than Sound Transit budgeted. The Beacon Hill contract, $280 million, was originally estimated at $238.6 million.

It's a big change from four years ago, when Sound Transit's fiscal reputation was in tatters. The agency had been forced to abandon its original, voter-approved plan for a 21-mile line from Seattle's University District to SeaTac after acknowledging the project was $1 billion over budget and three years behind schedule.

The scaled-back, downtown-to-Tukwila project took its place. Critics still complain that it isn't what voters were promised and question whether its benefits outweigh its hefty price tag.

But Niles said Sound Transit appears to have taken a more cautious approach after the 2001 meltdown. "They're giving themselves a cushion," he said.

Schachenmayr agreed. In developing the revised project's budget in 2001, he said, Sound Transit built in contingencies and reserves it hadn't included before: "We have not always been this sophisticated and deliberate."


When Sound Transit signed the nine big construction contracts, it also set aside contingency funds for each to cover possible changes. They total $67 million; little of that money has been tapped so far, according to agency documents.

In addition, $43 million remains from a $47 million "unallocated" construction contingency fund. About $4 million was transferred from it last month to add another station at South Royal Brougham Way, Fazel said.

There's also a $128 million projectwide reserve fund that hasn't been touched.

Sound Transit's latest progress report, reflecting developments through December, calculates that, if forecasts and trends hold up, the light-rail line would cost $2.23 billion — $203 million less than budgeted.

That's conservative in some respects, Schachenmayr said, because it assumes all the contract contingencies will be spent.

Even so, "it's a little bit early to talk about savings," he added.

Yesterday's Tukwila-segment bid opening was the end of an era for Sound Transit. Schachenmayr said the light-rail project is ending its "procurement phase" and entering its "construction phase."

The procurement phase — signing contracts — presented budget risks that the project negotiated well, he said, but construction also entails risks that could drive up costs and draw down reserves.

Niles agreed. "They could hit a big boulder in the tunnel under Beacon Hill and go through that contingency pretty fast," he said.

Sound Transit already is dealing with several issues that could push costs up. Among them:

Steel: Its price has gone up and supplies are short. Kiewit Pacific, the contractor building the maintenance base, stations and tracks in Seattle's Sodo area, has notified Sound Transit it wants more money to cover price increases and delivery delays. Sound Transit has included provisions in some of its more recent construction contracts to reflect the volatility of steel prices.

Contaminated soil: There may be more of it at the maintenance-base site — an old landfill — than Sound Transit anticipated, Schachenmayr said, so treatment or disposal could be more expensive.

• "Jet grouting": A method for stabilizing soil that Sound Transit is using under Beacon Hill. It may make sense to do more of it now to avoid potential problems later and keep construction on schedule, Schachenmayr said.

Construction accounts for only slightly more than half the budget of the light-rail project. But Schachenmayr said there's little risk that costs for other elements of the project, such as land acquisition, engineering and design, will increase, because those tasks are mostly finished.

Eric Pryne: 206-464-2231 or

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