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Tuesday, June 7, 2005

Monorail Over Budget?

Posted by on June 7 at 14:58 PM

Seattle Monorail Project director Joel Horn, who announced that the SMP had wrapped up its negotiations with the monorail bidder, Cascadia Monorail Company, on Friday, acknowledged to me on Tuesday that the new cost estimate for the monorail was substantially higher than the $1.79 billion estimate released in 2002. That earlier estimate, it turns out, included much lower reserves, agency operating costs, and debt assumptions than the agency now anticipates. For example, the proposal released Friday includes a $200 million contingency fund; the 2002 proposal anticipated just $76 million in reserves. The total cost of the project, Horn acknowledged, could be upward of $2 billion - hundreds of millions more than expected. Horn’s response to charges that the project is “over budget”: Yes, the project will cost more, but it’ll be better. “[$1.75 billion] was a current estimate back in 2002,” he says. “A lot of things have changed since 2002. Yes, the total project costs are up, but we’ll have better taxpayer protection.”

The real point, Horn continued, is that the SMP can afford to pay for the Green Line from Ballard to downtown to West Seattle within its current bonding cap of $1.5 billion. "Is it better? Yes. Does it cost more? Yes. Can we afford it? Yes," Horn said. "Whether people care about the difference, as long as we can afford it, will be interesting to see."
How much that difference actually amounts to - and how the monorail agency will pay for it, given revenues that continue to fall short of projections - will be made clear on June 20, when the agency plans to release the details of its contract with Cascadia.