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THE BIG DIG

At midpoint, rising scrutiny, soaring costs cloud fortunes of the Big Dig

First of three parts

Down in the hulking steel tubes that form the new Third Harbor Tunnel, a broad beam of light shines through a shaft opening 40 feet overhead.

There is light at the end of this three-quarter mile tunnel.

But there is still a long way to go. Breaking through to the other side will require removing massive, steel bulkheads that seal the ends of the 12 football field-length sections of immersed tube, from the sweeping concrete approaches in South Boston to Logan Airport, across the harbor in East Boston.

Roughly halfway through the 20-year endeavor known as The Big Dig, there are still miles -- expensive miles -- to go.

It is the largest public works project in America, a 7.5-mile corridor of construction in three parts: building the new four-lane tunnel; tearing down the Central Artery while putting a new one under the city; and constructing the Charles River crossing. The current official cost estimate: $7.7 billion, or more than $1 billion a mile -- the most expensive stretch of road in the world. But that price is on its way even higher. Some federal and state officials directly involved in the project are privately conceding that the final cost will be more than $10 billion by the scheduled completion date of 2004. Some state legislators -- less intimate with the project but more blunt in their assessments -- believe the price tag will reach $12 billion.

Ten years after the start of a furious political fight that clinched funding for the project, and 10 years before any ribbon-cutting ceremony for completion is scheduled to take place, the Big Dig's midpoint arrives unceremoniously -- amid a growing sense by the project's many supporters and its fewer detractors that it is at a critical juncture. As the costs continue to climb dramatically, a sobering question persists: Who is going to pay for it all?

The funding formula -- that the federal government would cover roughly 85 percent of the expenditures and the state the other 15 percent -- is in question as costs escalate. Federal funding secured and earmarked by the state for the artery-tunnel project through 1996 amounts to $3.8 billion. That will leave a shortfall of at least $2.5 billion and perhaps close to $5 billion.

With the expected awarding later this month of a $400 million contract for construction under Atlantic Avenue, the so-far almost invisible project will become a daily reality for commuters. According to those involved, this is where the Big Dig will pass the point of no return. Beginning excavation downtown in earnest, with all the disruption and detour that entails, will be both an act of faith that the remaining federal and state funding will follow and a recognition that hundreds of millions of dollars will have been wasted if it does not.

As the stakes get higher, public scrutiny has become more intense. This year, the federal Department of Transportation's Inspector General Office issued a scathing report on the project, portraying it as out of control, and recommending a cap on federal funding. The FBI is investigating the project to see if there is fraud; the state auditor and the House Committee on Post Audit and Oversight have called for more supervision.

And this election year, Massachusetts Democrats -- even though it was their project at conception -- are trying to place the Big Dig at the center of a political wrangle. The chief concern of the critics: who is watching the till? They claim that the management of the project under Republican Gov. William F. Weld's watch has countenanced a $2.5 billion escalation in costs and six years in delays.

Project officials defend themselves, saying the soaring costs are the result of a process beyond their control -- driven as much by politics as it is by engineering -- that has increased the scope and therefore the cost. They also note that under the previous Democratic administration of Michael S. Dukakis the project was lagging behind and costs went up $2.6 billion.

The most dramatic example of shared blame for both delay and cost increases, project officials from both administrations say, is the long battle over the design of the Charles River Crossing. That alone added $1.3 billion and three years to the project. But there are increased costs and delays that are harder to explain, such as the newly disclosed engineering mistakes in the Fort Point Channel that under the most recent solution proposed would add $200 million to the cost of excavation, and could delay the link between the tunnel and the Massachusetts Turnpike Extension for a year.

No matter how the delays are created, the engine that drives costs up is inflation. Officials estimate inflation alone since 1985 at a staggering $2.5 billion -- an amount equal to the projected cost of the entire undertaking at that time. Factoring in future inflation, officials acknowledge, the current projected cost of $7.7 billion will grow to $8.8 billion by 2004.

For all the project's problems, those who know it well -- both Democrats and Republicans -- are hesitant, perhaps fearful, to point fingers. They know the Big Dig was born of a hard-fought political consensus that took some 20 years to build, and that it rests on a fragile, bipartisan foundation.

"It would have been awfully easy and politically inviting for us to take a walk," said Secretary of Transportation James Kerasiotes. "We didn't because building this project was the right thing to do and the benefits, short and long term, to the economy and quality of life far outweigh the costs."

Frederick P. Salvucci, transportation secretary under Dukakis, agreed, saying, "We're all in the same bipartisan traffic jam."

Salvucci -- the visionary and political facilitator of the project -- recently stood on a bridge in South Boston. Looking north there was a sweeping view of the city's skyline and the traffic backing up on the Central Artery. To the south was a construction site and the dozens of towering cranes that swing and dip at the entrance to the tunnel.

Over the sound of the machinery, Salvucci noted not just the need to alleviate traffic and bring Boston and New England into the next century, but also the other benefits of the project: some 15,000 jobs and their ripple effect on the local economy as well as creating new development in South Boston, which will eventually be more accessible by car and subway.

"We got it rolling, but they are doing the work," said Salvucci, who has been both supportive and critical of the Weld administration's stewardship of the project. "Everybody wants to see this thing get done. And it is getting done. We have to be vigilant, but we also have to be patient."

LONG, HARD ROAD TOWARD CONSENSUS

The Big Dig -- a massive public works undertaking that surpasses the Hoover Dam and the Brooklyn Bridge in terms of cost and magnitude -- was forged in the fires of three decades of Massachusetts politics. It was galvanized through consensus in both Boston and Washington.

The history of the Big Dig is in some ways the point where the history of city politics intersects with the power of suburban wealth. It is a unifier in a highly political state, a bridge over a fault line caused by bitter battles over the need for highway projects versus public transportation.

The existing Central Artery -- the unsightly spine of downtown that will be dismantled and rebuilt underground -- is the physical embodiment of that political fault line.

It took all of the 1950s to complete. Its cost shot up dramatically, from a $30 million estimate in January 1951 to $110 million when proud public officials snipped a ribbon at the Dewey Square Tunnel in 1959.

A front-page article in the Globe on June 25 that year read: "Casting aside of the wooden barricades will enable motorists by the tens of thousands to reach the central city in scant, trouble-free minutes; or speed through it, non-stop, on a six-lane ribbon of concrete."

Needless to say, the highway never lived up to its promises. Originally designed to carry 75,000 cars a day, it is now clogged with some 190,000 daily. In the 1960s, Boston politics would be strongly influenced by such intrusive highway projects.

In the broadest of terms, the two sides involved in this history were pro- highway and anti-highway. The pro-highway faction was made up of contractors, unions, and those who sought to open up access to the suburbs. The anti-highway faction was a grass-roots movement in working-class, inner- city neighborhoods that had seen homes bulldozed to make room for highways.

Two central characters in the tale of the Big Dig grew out of this latter group: Dukakis, then an up-and-coming state representative from Brookline, and Salvucci, a young MIT graduate who had grown up in East Boston.

By the late 1960s, the people opposing highways had become more sophisticated. They developed a power base in the inner city which came together in a dramatic battle to block the construction of the Inner Belt, a highway plan that called for extending Interstate 95 by cutting a swath through Brookline, Cambridge and Roxbury.

They won when Republican Gov. Francis W. Sargent joined their side in 1971. Out of that fight, Dukakis and Salvucci emerged as key players in city and state transportation battles, pushing for more mass transit. In the process, Massachusetts opted to sacrifice hundreds of millions of dollars in matching federal highway funds. But much of the money would be reclaimed for the artery-tunnel project that is the last and perhaps largest single piece of the Interstate Highway Act, the 40-year-old legislation that has built 42,000 miles of highway across the United States.

Sargent had a grand plan, though at the time it was politically untenable. He wanted to build both a new, two-lane third harbor tunnel to Logan Airport, for buses and other high-occupancy vehicles, and put the Central Artery underground.

The Federal Highway Administration estimated the cost of depressing the Central Artery at $300 million in 1971 and dismissed it as nothing but a ''highway beautification project." And the anti-highway coalition opposed the tunnel because it would have ripped through city neighborhoods.

Depressing the artery seemed like a great idea to beautify the city, but an impossible task to complete without crippling the city's economy.

Salvucci's key contribution would be in finding a way to align the tunnel so it would not disrupt the neighborhoods, and exploring engineering that would allow for depressing the artery while the elevated structure stayed in place.

But that would take a long time.

Although Dukakis, who was elected governor in 1974, opposed the tunnel, he appointed Salvucci as transportation secretary. Salvucci would eventually bring Dukakis to realize the benefits of the tunnel, but only after a way had been devised to avoid destroying people's homes.

In 1976, the project cleared a hurdle by winning preliminary approval of the Federal Highway Administration to pursue the notion of depressing the artery and building a third harbor tunnel. By itself it was not a big step. More significant was that it happened only after the intervention of then- House Majority Leader, and soon to become Speaker Thomas P. (Tip) O'Neill Jr. O'Neill, who once opposed the tunnel portion, had been turned around and would become one of the project's strongest, most influential allies.

O'Neill would work his muscle and his charm in Congress, especially a 25- year-friendship with then-Senate Majority Leader Howard Baker, who stepped down in 1984 but helped pave the way for authorization before he left. Later, O'Neill would end up in a highly visible fight with President Ronald Reagan over the project.

Salvucci recalls how the vision of a feasible third harbor tunnel materialized. He was sitting in his office when an engineer called him from a pay phone in South Boston. It was Bill Reynolds -- a contractor, engineer and old friend -- who began describing how he had just figured out the solution: run the tunnel through underdeveloped South Boston to the airport. That way, no neighborhoods would be impacted, especially not Salvucci's hometown of East Boston, as was the case with earlier plans.

After Salvucci had assembled a road show to sell his grand project to the public, momentum was halted when conservative Democrat Edward J. King was elected governor in 1978. King, who named Kerasiotes as one of his top transportation officials, opposed the artery, while supporting the tunnel.

But King ran into a coalition of liberal Democrats -- led by O'Neill and Sen. Edward M. Kennedy -- that fought hard to insist that depressing the artery had to be done first.

In 1983, after Dukakis had regained the corner office, Salvucci knew it was time to move. He began putting together a package that was the basis of today's tunnel and artery project, though in far simpler -- and less expensive -- form.

Salvucci supported tying a third harbor tunnel to the depression of the Central Artery as long as the tunnel emerged on airport land, away from the neighborhoods. And that same year, following a crucial call to Reagan's

appointees at the Federal Highway Administration from the state's lone Republican congressman, Rep. Silvio Conte, the agency grudgingly agreed to

allow Massachusetts to revise the King administration's tunnel environmental impact statement to include putting the Central Artery underground.

In 1985, the state's new plan was given preliminary approval by the highway administration with an official cost estimate of $2.5 billion.

The project was on a roll through 1986, a heady time for Massachusetts, then in the flush of an economic boom. The state had the promise of a governor poised to make a bid for the presidency, the power of Kennedy, and the personality and perseverance of Speaker O'Neill. This political constellation -- never again to be arrayed so brightly -- was shining down on the process.

But on Capitol Hill in 1987, Reagan blasted the Massachusetts project as an example of wasteful, pork barrel spending and vetoed the transportation bill containing its funding. The stage was set for a battle royale to override the veto.

The Democrat-dominated House easily overrode Reagan's veto on March 31, 1987. The fight then shifted to the Senate, where one of the most dramatic turnarounds of the Reagan era would occur.

The next day, the Senate voted -- with Democrat after Democrat going for the override. Thirteen Republicans -- whose motivations varied from wanting projects for their home state to pressure from the construction industry -- also voted to override. Leading this coalition was Sen. Steven Symms (R- Idaho). His payback came in the form of heavy campaign contributions from a long list of Boston business leaders such as real estate developer Norman Leventhal and Boston lawyer Harold Hestnes, according to a political history of the project by David Luberoff, a researcher at Harvard's Kennedy School of Government.

Last to vote was newly elected Terry Sanford, Democrat of North Carolina. He waffled, and the pressure grew. Finally, since the bill was unpopular back home, Sanford voted with Reagan, against the override.

But Senate Majority Leader Robert Byrd called for a reconsideration, giving the Democrats a few short hours to launch an intense campaign to turn Sanford around. Kennedy called the young senator into his office, wrapping him in the mantle of Camelot, reminding him that they had family ties that went back to the 1960s.

Sanford was cajoled and finally bullied into reversing his position. He announced that he intended to vote to override. Republicans then delayed the vote a day, to bring Reagan himself to Capitol Hill to lobby.

When the Senate came back into session, Kennedy and Byrd literally ushered Sanford in, keeping Reagan supporters at bay. Sanford voted as he said he would and clinched the override, in what would go down as one of the president's most bitter legislative losses. The Globe quoted one pundit suggesting that the tunnel be named for Sanford because "it would go in both directions."

REPEATED DELAYS, ESCALATING COSTS

Since the Weld administration took the reins of the project, it has completed the excruciating permitting process, dug the first spade of earth, and stuck to a promise to open the new tunnel by the end of next year. But there have also been cost escalations and delays. Moreover, in this election year, officials have chosen to skip their annual cost and schedule revision of the project, delaying it until 1995.

How do these soaring costs happen?

Project Director Peter M. Zuk says they result from multiple changes and additions that have created six years of delay in the project, now set for completion in 2004.

Most delays, project officials say, result from the political process: neighborhoods, interest groups, government agencies requesting or demanding changes that they believed would improve the overall project.

In addition to the $1.3 billion redesign of the Charles River crossing segment, other examples of costly additions to the project include: high- occupancy vehicle lanes for the link between the Massachusetts Turnpike and the Third Harbor Tunnel for $262 million and tunnnel covers in both South Boston and East Boston for $180 million.

The delays, Zuk concedes, were also created by highly unrealistic projections of construction schedules.

"There was not the level of diligence in reviewing the schedule that there should have been before 1992," he said, diplomatically criticizing both the previous administration and the experts of the joint venture led by Bechtel Corp. that was hired to guide the project. "1994 and 1998 were dates that were doggedly maintained as opening dates. Clearly, they needed to be reassessed once we got into physical construction."

Another factor in delay and cost increases is the high potential for engineering problems and miscalculations in a complex project. The most glaring and recent problem is a series of engineering errors made in the Fort Point Channel crossing. Critics, including Salvucci, say any increased cost or delay in Fort Point may be a direct result of the state's failure to adequately oversee the joint venture that manages the process.

The state has vowed to thoroughly investigate the mistake and go after cost recovery from whoever is deemed accountable.

UNCERTAINTY OVER FUTURE FEDERAL MONEY

As costs climb, the question of where future funding will come from looms larger. In 1991, the project secured roughly $3.8 billion in federal funding through 1996, with the state planning to pay something less than a billion

dollars that was expected to be the project's remaining cost.

But funding for any amount over the 1991 estimate of $5.2 billion is

uncertain, and some say it will be a hot political issue as Congress gears up next year to deal with the new federal formula for large-scale public works set to take effect in 1997.

Lester Lamm, a lobbyist on Capitol Hill for the Highway Users Federation, said that Massachusetts is in a precarious position.

"If the project ends up costing $10 or $12 billion, it is a big question as to whether there will be enough interstate construction money to complete that project," said Lamm. If the costs do go as high as predicted, he added, ''I don't see it. I don't see how they could pay for that."

The present stewards of the project believe worries over funding are exaggerated. Kerasiotes says the Federal Highway Administration signaled an answer to the funding question last month, in a letter that authorized the project to pass the point of no return and proceed to bid on one of the largest downtown construction contracts. "That's a pretty serious commitment to see the project through," he said.

As to the details of funding after 1996, when money will have to come from other federal accounts because 1991's was the last from Interstate coffers, Kerasiotes says: "It's a congressional decision. It always has been."

And that will be a political brawl.

Donald Hammer, Federal Highway Administration regional administrator, notes there are many uncertainties: "If they cut back programs or change the apportionment, it will create problems. . . . We are going to have to work hard on cost containment or we could be in trouble."

FUNDING STRUGGLE ON THE HOME FRONT

The war for future funding will be fought in Congress, but there will also be battles at home over how -- and how much -- the state will pay. In addition, there will be tussling over how much of the federal funding for road projects will end up in Boston and the Big Dig, rather than other parts of the state.

Hammer said the state has become accustomed to taking federal funds earmarked for other areas and pouring them into the project, and that such a strategy has been essential. "If that gets political, it could cause problems," he added.

One way it could get political is if other parts of the state get fed up with a highway project in Boston sucking in federal dollars they believe should be for their communities. The seeds of that revolt are planted in the historic, simmering animosity between the western part of the state and Boston. In Western Massachusetts, legislators already call it "the Big Hole," not the Big Dig.

So far, Kerasiotes has worked out a funding formula for this year providing $400 million for the project and $400 million for statewide activities, and says he'll keep that balance for 10 years.

But Hammer is less confident: "He has so far been able to keep peace in the family. I don't know how long that can last."

There are also serious questions as to how the state will manage to afford its share of the project's escalating costs.

"We're at a crossroads," said Rep. Stephen J. Karol (D-Attleboro), who for 10 years has been cochairman of the Legislature's Joint Transportation Committee. "It's time to ask the tough questions, like, 'Can we afford this?' ''

Karol, about to step down after 16 years in the Legislature, has tried to convince project officials that they are kidding themselves with current cost and schedule estimates.

"It could take as long as 2010 to finish, and I would not be surprised if the final cost is about $12 billion," says Karol. "The point is that things happen; costs go up. It's inevitable in a project of this size."

Karol has vowed to lead the push for a bill that would authorize the Massachusetts Turnpike Authority to collect the tolls and manage the tunnel in exchange for paying the state's portion of it. James Aloisi, chief counsel for the Turnpike Authority, said he supports the legislation, but is wary of the effect it could have on the authority's bond rating.

"The numbers on Wall Street put this project at about $10 billion," Aloisi said. "But I don't think Wall Street is as concerned with the total cost as much as they are with the plan, or lack of a plan, to deal with these costs. . . . That's what has to come together. That is the crossroads we're headed for."

For Kerasiotes, this crossroads is a perilous intersection between politics and public works. "Do I think there's a danger to the project?" he asked. ''Yes, in creating a political snowball at just a time when a lot of elements in the project can be undone."

NEXT: BECHTEL'S POWER

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