BART-SV price tag grows to $9B; opportunities to cut costs, improve project for riders

This evening is the first VTA board meeting since the news broke in late October in a Mercury News report that the cost of the Silicon Valley BART extension has ballooned to $9 billion; a 30% increase over the previous estimate, and nearly double the price tag estimated three years ago. 

The new cost estimate was reported in the “Letter of Intent” from the Department of Transportation to provide 25% of the funding for the project if VTA can come up with a plan for the other 75% within two years.

In the news article, VTA spokesperson Bernice Alaniz said that the agency would be looking for opportunities to reduce the cost. $9.1 billion is certainly something that we’re not planning to achieve,” she said. “We’re going to work to keep the budget as close to where our budget and plan is right now. … We will look at everything we can control to reduce risk and bring down that contingency.”

Opportunities to reduce costs and improve rider experience
Several years ago in 2017, VTA made the decision to use a rare construction method with a very big tunnelling machine that would contain both sets of rails and the station platforms within the diameter.  The reason to do this, which seemed reasonable at the time, was to avoid impacts to downtown businesses caused by digging up the streets.

Now that this rare option has ballooned in price, a logical option might be to return to a more conventional design that was studied earlier and environmentally cleared, , using two smaller tunnelling machines to create the tubes for the BART trains, and to build the stations by digging from the surface. And If VTA is able to save billions, it could use some of the savings to compensate businesses for the construction impacts. 

Construction methods have improved in the decades since the painful construction processes that dug up downtown San Jose (and downtown San Francisco Market Street); a recent light rail project in Los Angeles had the streets open for only 10 weeks when building its station. 

The more conventional design would also result in a better experience for riders. The “single bore” construction creates stations that are four stories underground, taking longer to get to and from the platforms; resulting in longer transfer times between BART and Caltrain at Diridon, and making it more difficult to add multiple station entrances. 

Also the single bore design limits the density of transit oriented development that can be done at the stations. With the single bore design, concrete walls to support buildings above or to the side of tunnels would not be constructed, making it difficult and costly to build significantly around stations, reducing ridership and San Jose’s goals to urbanize its downtown area. 

Covering the added costs could be challenging
Santa Clara County’s Measure B, passed in 2016, included a 25% cap on the amount of funding that could be used for the BART Silicon Valley project.  Some county leaders, led by Supervisor Joe Simitian, negotiated the cap because of concern that the project would escalate in cost and consume funds for other priorities. Five years later, that decision looks prescient.   It may be difficult for VTA to make up the difference with another ballot measure, since voters may feel that they already voted to pay for the project several years ago. 

For transit supporters wanting to see robust funding for frequent service, and funding for other projects including upgrades to Diridon station, level boarding for faster, more accessible Caltrain service, electrification to Gilroy, and more; paying for the BART Silicon Valley cost overruns would come at the expense of many other priorities. 

Time for an independent peer review?
Faced with an earlier cost escalation, VTA did a peer review of the construction and found opportunities to save some cost with a less large single bore tunnel, however the agency did not fundamentally reconsider the single-bore design.

Given the continued escalation, it seems useful to independent peer review to reassess the cost compared to the previously environmentally cleared twin bore option. The independent peer review could consider project costs, outcomes for customers, and a comparative assessment of the number of local and U.S. jobs created with single versus dual bore.

Is it possible to change course with federal funding?
Now that the project has gotten its initial letter of support from the federal government, is it even possible to change course?  Relatively recently, the Boston area’s Green Line extension was redesigned to save money after it had received a full funding grant agreement from the federal government, after updated cost estimates in 2015 showed that project costs had increased from $2 billion to nearly $3 billion. 

Shifting federal funding might not be easy but the region has supportive members of Congress and a supportive administration who could advocate to save the federal funding while changing the project to be more cost-effective and better for customers. 

Is it time to pause spending? 
This evening VTA is holding its first board meeting since the news of the cost increases broke. There are two items on the agenda, 6.4 and 6.5 on the consent calendar, with contracts of $16 million and $12 million toward the project.   Now that the current design is facing financial risk, does it make sense for the board to hold off on expenditures while determining whether and how to change course.