Winning bid for light rail section cuts into reserves

Hampton Roads Transit awarded a contract Thursday to build the downtown section of light rail that is nearly $15 million more than what was budgeted.

The $42.4 million contract was awarded to Skanska USA Southeast Inc. to lay track from Harbor Park to Eastern Virginia Medical Center. The work was originally budgeted at $27.7 million.

HRT officials said there's ample contingency money in the $232.1 million budget - nearly $29 million - to cover the overage. While any overruns beyond the contingency would have to be covered by the city of Norfolk, HRT officials are working to identify additional resources in case the project goes over budget.

"It's too early right now to determine what the overall impact will be on the final budget," said Jayne Whitney, HRT's senior vice president for development.

Seven more contracts have yet to be bid for stations, operations systems, park-and-ride lots, a maintenance facility and buses. Among the first three contracts already awarded, two were slightly under budget and one was a little over budget.

Michael Townes, HRT's president and CEO, said the transit agency is preparing for possible changes to the project's schedule and budget. Light rail is expected to open in early 2010, but that schedule may slip.

HRT took extra time to evaluate the downtown proposals because they were so high, which delayed the start of construction. There were also delays relating to demands by Norfolk State University for the section of rail being built next to the campus.

The contract awarded Thursday covers nearly half of the project length. About $9.8 million of the overrun costs are because of design changes, Whitney said. The enhancements include installing brick pavers instead of concrete where rail crosses streets, imbedding the entire track in the road instead of just through the heart of downtown, an additional signalized crossing, and extra utility work.

Close to $5 million in additional costs can be attributed to financial risks assumed by the contractor when digging into downtown streets, Townes said.

To qualify for federal money, Townes said, HRT had to submit a budget to the Federal Transit Administration before design was completed for the rail line.

"We knew if we were going to have a problem with a contract, it would be this one, because there's a lot of unknowns when you get into the streets of downtown," City Councilman W. Randy Wright said.

Three bids were submitted ranging from $42.1 million to $44.8 million.

Suburban Grading and Utilities Inc. was the lowest bidder at about $350,000 less than Skanska's. However, Suburban was disqualified by HRT for not meeting certain requirements. Suburban is now suing HRT.

Skanska is already building the light-rail track between Harbor Park and Newtown Road. The FTA has committed $128 million to the project. The city has dedicated $33 million, and the state will contribute $31.9 million. About $39 million is coming from other federal sources.

The line will run from Eastern Virginia Medical Center through downtown to the city line at Newtown Road. It is projected to carry 6,000 to 12,000 passengers a day.

Debbie Messina, (757) 446-2588, debbie.messina@pilotonline.com