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Truth in Tunneling

June 11, 1989

Ever since work began on Los Angeles' Metro Rail subway, public officials who promoted the project have missed few chances to point out that the massive undertaking is under budget. Now, preliminary findings by a team of federal auditors seem to suggest that Metro Rail boosters should tone down their rhetoric.

A team of investigators from the U.S. Department of Transportation, which is helping finance Metro Rail, has found that cost projections made by the Southern California Rapid Transit District, which is building the subway, may be too optimistic. Their findings are preliminary, and will not be final until the fall. But so far the auditors are concerned because half of the $1.25 billion budgeted for the first phase of Metro Rail construction has already been spent, while the subway tunnel is only one-third of the way towards the terminus of its first 4.4-mile leg, Alvarado Street in the Westlake area.

Auditors also have noted that a contingency fund based on the amount the project is under budget, which stood at $66 million earlier this year, now stands at $23 million and is likely to shrink even further before the first phase of the project is finished in 1993. As that happens, it would not take many unforeseen problems to push the project over budget.

RTD General Manager Alan Pegg's reaction to the federal audit has been mixed. He was at first annoyed by release of the preliminary findings to members of the state Legislature who, in turn, made them public. But both the federal and state governments have put money into Metro Rail, and are entitled to voice their concerns about the project. Pegg's later response was more constructive--he told the RTD board of directors he will ask outside auditors to review Metro Rail's costs. If the outside audits are conducted carefully and independently, they could help assure taxpayers that money for the subway is being well spent.

Metro Rail is needed, but it is also the biggest public works project ever undertaken in this city and, as such, expensive. The subway deserves continued public support, but arguments on its behalf should be based on the merits of the system, not on budget estimates that may not stand up.

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