LOS ANGELES RED LINE: FINANCING DECISIONS COULD AFFECT THIS AND OTHER LOS ANGELES COUNTY RAIL CAPITAL PROJECTS
The federal government has committed to fund $2.8 billion (about 51%) of the Los Angeles County Metropolitan Transportation Authority's Red Line subway project in California. The 23.4-mi (37.7 km) Red Line project consists of three segments. Segment one [4.4 mi (7.1 km)] is in service; construction of segment two [6.7 mi (10.8 km)] is about 70% complete. The third segment [12.3 mi (19.8 km)] is divided into three extensions: the construction of the north Hollywood extension is 18% complete, the final design of the East Side extension is 10% complete, and the design of the Mid-City extension is on hold while the Authority assesses other alignment options. The General Accounting Office (GAO) reviewed the project's estimated cost and the Authority's financing plans, as well as the Federal Transit Administration's (FTA's) oversight of the project's quality control and quality assurance practices. Briefly, GAO found the following: As of February 1996, the Authority estimated the total cost of the Red Line project at $5.9 billion, about 8% above the $5.5 billion estimated in the grant agreements. The project's cost has increased as a result of (1) construction problems, such as realignment of a station to avoid unanticipated groundwater and soil contamination; (2) new construction requirements, such as upgrading stations to comply with the Americans with Disabilities Act (ADA); and (3) enhancements to the project, such as an additional station entrance. The February 1996 cost estimate could increase because of the need to realign the Mid-City extension, additional design problems, and pending lawsuits. The Authority plans to fund $3.1 billion of the project's $5.9 billion cost with federal funds and the remainder with state and local funds. However, about $380 million in federal, state, and local funds committed may not be realized. For example, the California state legislature recently diverted $50 million in funds slated for the Authority's bus operations. To offset that loss, the Authority provided funds for bus operations that had been committed to the Red Line project. FTA officials believe that the Authority can use sales tax revenues that it has allocated to other rail capital projects to cover funding shortfalls. However, doing so could result in the need to reduce the funding or scope of other transit construction projects, defer or cancel projects, or extend the schedule for completing the Red Line, which could also increase the project's cost. The Authority is implementing a plan to improve its overall management of the project's construction by, among other things, reorganizing its quality control and quality assurance programs and increasing the staffing levels for quality assurance and safety. FTA and the Authority agreed to the plan after FTA stopped tunneling under Hollywood Boulevard and suspended--from October 5 to November 10, 1994--future federal funding for the project. FTA took this step after the types of changes FTA had recommended over time were not made.
- Record URL:
- Report to the Chairman, Subcommittee on Transportation and Related Agencies, Committee on Appropriations, House of Representatives.
U.S. General Accounting Office441 G Street, NW
Washington, DC United States 20548
- Publication Date: 1996-5
- Features: Appendices; Figures; Tables;
- Pagination: 19 p.
- TRT Terms: Construction; Construction management; Cost estimating; Estimates; Finance; Financing; Oversight; Quality assurance; Quality control; Subways
- Uncontrolled Terms: Financial sources; Increase
- Geographic Terms: Los Angeles (California); Los Angeles County (California)
- Old TRIS Terms: Subway construction
- Subject Areas: Construction; Finance; Public Transportation;
- Accession Number: 00723877
- Record Type: Publication
- Report/Paper Numbers: GAO/RCED-96-147
- Files: NTL, TRIS
- Created Date: Jul 29 1996 12:00AM