Audit blasts Big Dig management, accounting
Places project price tag at $13.6b plus
By Caren Benjamin, Associated Press, 04/11/00
WASHINGTON -- A stinging federal audit released Tuesday charges project managers with intentionally hiding escalating cost information from the federal government and puts the price tag for the highway project at $13.6 billion or higher.
"It doesn't pull any punches. It's tough, candid and it is the first step in helping restore confidence in this process," said Sen. John Kerry, D-Mass.
Though the audit does not mention Massachusetts Turnpike Authority Chairman James Kerasiotes by name, it clearly suggests Gov. Paul Cellucci had little choice but to ask for his resignation, as he did after receiving the audit Tuesday. Andrew Natsios, secretary of administration and finance, will succeed Kerasiotes.
The move was not enough to satisfy Rep. Frank Wolf, R-Va., the project's sharpest congressional critic and head of the House Appropriations Committee transportation panel. Wolf called on the secretary of transportation to suspend federal participation in the project.
While conceivably Wolf's panel could decide not to fund the project this year, that is unlikely to happen, said Michael Mershon, spokesman for Rep. James McGovern, D-Worcester.
"Suspending funding for the Big Dig is a terrible idea. The reasons you have a team of professional auditors come in and make recommendations is so you can follow those recommendations and get the project back on track and move on," Mershon said.
Kerasiotes doesn't hold sole responsibility for the soaring cost of the project, Secretary of Transportation Rodney Slater said after presenting the audit to Cellucci and the 12-member Massachusetts congressional delegation.
"Frankly no one is blameless as it relates to this," said Slater, who admitted the federal agency responsible for the project ignored warning signs and was too trusting in its oversight.
Slater accepted auditors' recommendations to require extremely detailed accounts of the project's finances from now on. The report also suggests Cellucci "reevaluate the appropriateness" of the Massachusetts Turnpike Authority's role in the management of the project.
The Highway Administration will also review whether Kerasiotes or others should be barred from working on any other projects involving federal money, the audit said.
The Big Dig, officially the Central Artery-Third Harbor Tunnel Project, will bury Interstate 93 below ground through the heart of the city.
Slater ordered the audit earlier this year after Kerasiotes revealed a $1.4 billion overrun on the same day the Highway Administration, charged with overseeing the project, approved a finance plan that didn't mention the additional cost.
The federal government pays about 70 percent of the project's total cost.
Big Dig officials withheld information that would have helped Highway administrators find the overrun, the audit found.
In fact, Highway administrators raised questions about a potential $500 million overrun before approving the plan. Big Dig managers "dismissed the $500 million overrun as manageable, rather than admitting the true potential size of the overrun," the audit said.
As a result of such actions, "public confidence in the Federal and State partnership administering the CA/T Project has been seriously compromised," the audit said.
Kerasiotes' estimate of $1.4 billion in overruns was based on optimistically low figures on extra construction costs, the report found. In reality the remaining construction work will probably cost up to $480 million more than Big Dig managers believed, the audit said.
That figure will likely rise to reflect inflation before the completion of the project, which is scheduled for December 2004.
The audit also questioned the governor's plan, which was authored by Natsios, to cover the cost overrun. The audit said the plan "does not provide a sound source of revenue to cover the identified potential exposures."
Cellucci and the House had devised plans that relied on a $12.2 billion project price tag, though the House plan allowed for an extra $300 minimum. The new $13.6 billion federal estimate changes the state's calculations, and Cellucci said he would work out a new plan with the House and Senate by the end of April.
One of the auditors' concerns is that the Legislature won't approve certain aspects of Cellucci's plan, including a proposal to extend bonds.
A more comprehensive analysis of the plan is being conducted by the Federal Highway Administration and should be available within approximately two weeks, Slater said.
Former Big Dig chief James Kerasiotes.
New Big Dig chief Andrew S. Natsios.
