Autumn on Lake Audobon

Autumn on Lake Audobon
Autumn on Lake Audubon, Photo by Alison Kamat

Tuesday, February 25, 2014

Who pays how much for Bechtel's Silver Line construction failure?

Yesterday we were informed that MWAA's inspection of the construction of Phase 1 of the Silver Line, led by Bechtel Corporation, failed to meet expectations in seven of 12 categories.  Much ado--and no answers--was made about how much longer it will take to get the Silver Line operating.

An equally important--maybe more important--pair of questions has not even been asked, much less answered:
  • How much will the needed repairs cost?
  • Who will pay the cost of the repairs?
Given the scope and serious of some of the required repairs, it is possible to speculate that the needed repairs could add as much as $300 million (or 10 percent) to the cost of Phase 1.  That is exactly the amount the Virginia General Assembly approved in an added contribution to Silver Line construction last year.  In essence, Virginians' taxes may have spent to gain absolutely nothing.

The morally and ethically right way for the extra cost to be paid is for the inept builder to assume all the cost of the needed repairs after depletion of the already nearly bankrupt contract contingency fund.  If that cuts into Bechtel's profits or even leads to a loss on the project, it would be right and appropriate.

On the other hand, we're talking contracts which are completely unrelated to "doing the right thing."  If so, it probably means the Silver Line's "funding partners"--MWAA, Fairfax, & Loudoun counties PLUS the unrepresented Dulles Toll Road users who are being soaked with half the line's construction cost--will have to take on the burden.  That could mean all those political promises (if that's not an oxymoron) hyped last year that tolls would not have to go up again for a couple of years may be thrown out to fill the gap in financing Phase 1.

It also won't help Loudoun and especially Fairfax County finances either.  Fairfax County, in particular, is running close to its debt financing cap and the last thing it needs to do is divert the remaining balance from needed schools, transportation, and other projects to help finance Bechtel's failures.

So, what are the answers to these two critical questions?


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