TRANSPORTATION INFRASTRUCTURE: CENTRAL ARTERY/TUNNEL PROJECT FACES CONTINUED FINANCIAL UNCERTAINTIES
At a cost of over $1 billion a mile, the Central Artery/Tunnel project - an Interstate Highway System project in Boston, Massachusetts - is one of the largest, most complex, and most expensive highway construction projects ever undertaken. In response to concerns about increasing costs of this project and the uncertainties associated with its financing, the General Accounting Office (GAO) was requested to evaluate (1) the estimated total cost of the Central Artery/Tunnel project and (2) the Commonwealth of Massachusetts' plans for financing it. Briefly, the GAO found the following: Massachusetts' official estimate of the total cost of the Central Artery/Tunnel project, as updated in January 1996, is $7.8 billion. However, that estimate excludes over $1 billion in costs that were included in previous estimates and does not account for the effects of inflation. The GAO's analysis shows that the project's costs would total $10.4 billion if the excluded costs and the effects of inflation were considered. Moreover, the $10.4 billion assumes that the state will be 100% successful in meeting the aggressive cost containment goals established in 1995 for the project. Closely monitoring the project's cost performance is important because the total costs could exceed $11 billion if historic patterns of cost growth, rather than the project's cost containment goals, prevail. Massachusetts plans to finance the Central Artery/Tunnel project with federal and state funds; however, this funding may not be sufficient to complete the project as scheduled by 2004. Massachusetts intends to pay for some of the project over a number of years. However, due to identified shortfalls in the state's finance plans, when the bills come due funding may not be available to pay them. While Massachusetts has identified several options for covering these shortfalls, it has not yet selected one. If the Secretary is to approve these contracts, it is critical that a plan be developed to ensure that funding is available to pay the bills.
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- 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: 31 p.
- TRT Terms: Cost control; Costs; Finance; Financial analysis; Financing; Infrastructure; Road construction; Transportation; Tunnels
- Geographic Terms: Massachusetts
- Subject Areas: Bridges and other structures; Construction; Finance; Transportation (General); I10: Economics and Administration; I54: Construction of Tunnels;
- Accession Number: 00727037
- Record Type: Publication
- Report/Paper Numbers: GAO/RCED-96-131
- Files: NTL, TRIS
- Created Date: Oct 3 1996 12:00AM