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Cost Overruns

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WORLD
February 6, 2014 | By Tracy Wilkinson
MEXICO CITY -- A long-planned $5.25-billion expansion of the Panama Canal, one of the world's most important shipping lanes, is under threat by cost overruns and acrimonious disputes among builders and managers. Negotiations to resolve some of the issues -- namely who should pay more than $1.6 billion in unexpected costs -- broke down Wednesday, according to the Panama Canal Authority, which administers the 50-mile route that links the Pacific and Atlantic oceans. Jorge Quijano, Canal Authority administrator, accused the Spanish-led consortium in charge of widening the canal of ordering all work to stop.
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WORLD
February 6, 2014 | By Tracy Wilkinson
MEXICO CITY -- A long-planned $5.25-billion expansion of the Panama Canal, one of the world's most important shipping lanes, is under threat by cost overruns and acrimonious disputes among builders and managers. Negotiations to resolve some of the issues -- namely who should pay more than $1.6 billion in unexpected costs -- broke down Wednesday, according to the Panama Canal Authority, which administers the 50-mile route that links the Pacific and Atlantic oceans. Jorge Quijano, Canal Authority administrator, accused the Spanish-led consortium in charge of widening the canal of ordering all work to stop.
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CALIFORNIA | LOCAL
May 28, 2013 | By Ralph Vartabedian
Dan Richard, chairman of the California high-speed rail authority, said Wednesday at a congressional hearing in Madera that the agency had reduced the risk of future cost overruns, but the project's price tag could increase in the future. "I am not going to sit here and promise that there will not be [cost growth]," Richard said. Richard was one of six witnesses called by the House rail subcommittee chairman, Rep. Jeff Denham (R-Atwater), who has been harshly critical of the agency's plans and what he contends is lack of compliance with a voter-approved measure that provided $9 billion for the system.
CALIFORNIA | LOCAL
November 19, 2013 | By David Zahniser
The Los Angeles City Council signed off Tuesday on major changes to a harbor construction project whose cost doubled in four years, with lawmakers criticizing port executives for failing to consult the council sooner. Councilman Joe Buscaino, whose district includes the port, said he was "blindsided" by the rising cost of the upgrade to the TraPac terminal in Wilmington, which soared to $510 million from $245 million in 2009. Councilman Mike Bonin said he and his colleagues should have been included in the port's decision to convert the terminal to an automated crane system, a move that triggered a major portion of the cost overruns.
NEWS
June 14, 1990
Construction costs for the new police building and jail could rise by another $500,000 over the $23.4 million already budgeted, the acting director of the city's Administrative Services Agency told the Board of Directors Tuesday. City officials plan to withhold $300,000 from contractors who they say failed to follow plans. Another $200,000 in expenses is being negotiated, acting Director Norman Carter reported.
BUSINESS
May 26, 1987
Perceptronics, a Woodland Hills company that performs research for the military, reported that operating profits will be wiped out by write-offs in the fourth quarter ended March 31 because of cost overruns. During the same period in 1986, Perceptronics earned $330,493, or 9 cents a share, on sales of $7.9 million. The audited year-end results will be available in June, said Gershon Weltman, Perceptronics chief executive.
REAL ESTATE
September 14, 1986 | DAVID W. MYERS, David W. Myers specializes in the financial aspects of real estate. and
While many hotels downtown and throughout the Southland are thriving, at least one landmark Los Angeles property--the Biltmore Hotel--isn't faring as well. The Times has learned that Westgroup Inc., the developer and a co-owner of the property, has given its well-heeled partner in the ambitious rehabilitation and expansion project a larger equity stake in the hotel, in part because the renovation project has been marred by large cost overruns.
BUSINESS
March 17, 2005 | From Bloomberg News
Northrop Grumman Corp. cost overruns on the first two vessels in the U.S. Navy's new class of amphibious warfare ships, already $1 billion, could increase by $300 million more, the U.S. Government Accountability Office said. That would bring the cost of these first two of a planned nine vessels to about $3 billion, or 76% more than their budgeted cost of $1.7 billion, the GAO said in an 85-page report. The U.S.
CALIFORNIA | LOCAL
August 3, 2002 | From Times Wire Reports
The tab for strengthening the state's toll bridges against earthquakes, a job already costing twice initial 1990s estimates, could rise an additional $630 million and imperil other transportation projects, a new state audit warns. The audit, released this week, chronicles how a $2.2-billion project to retrofit seven major bridges by 2004 has turned into a $4.6-billion project that will take until 2009.
BUSINESS
June 11, 1987
A Navy contract that General Dynamics Corp. won last year for four SSN-688 attack submarines already has nearly $200 million in projected overruns because the contractor used out-of-date labor estimates in its final bid, according to the General Accounting Office. The GAO's study said labor hours will be 21% more than the company's Electric Boat division projected in its original estimates, resulting in a $196.1 million cost overrun for the $1.03-billion contract.
CALIFORNIA | LOCAL
August 20, 2013 | By Seema Mehta
County leaders approved $29 million in new spending on rebuilding a long-awaited hospital in South Los Angeles on Tuesday, but held back from paying all that county officials had sought. The action brings the total price tag of the Martin Luther King Jr. Community Hospital to $281.4 million. The funding will pay for "unforeseen" problems in the inpatient tower, such as repairing water damage, bringing utilities up to seismic codes and rebuilding deteriorating sewer pipes. Three floors of the inpatient towers were occupied as planners designed the project, so the problems were not discovered until renovation of the tower began.
CALIFORNIA | LOCAL
May 28, 2013 | By Ralph Vartabedian
Dan Richard, chairman of the California high-speed rail authority, said Wednesday at a congressional hearing in Madera that the agency had reduced the risk of future cost overruns, but the project's price tag could increase in the future. "I am not going to sit here and promise that there will not be [cost growth]," Richard said. Richard was one of six witnesses called by the House rail subcommittee chairman, Rep. Jeff Denham (R-Atwater), who has been harshly critical of the agency's plans and what he contends is lack of compliance with a voter-approved measure that provided $9 billion for the system.
CALIFORNIA | LOCAL
April 24, 2013 | By Martha Groves, Los Angeles Times
Elon Musk quips that it's easier getting rockets into orbit than navigating his commute between home in Bel-Air and his Space Exploration Technologies factory in Hawthorne. "The 405 … varies from bad to horrendous," said Musk, who also co-founded PayPal and Tesla Motors. "It just seems people in Los Angeles are being tortured by this. … I don't know why they aren't marching in the streets. " The massive project to widen the 405 Freeway is not only causing traffic nightmares for motorists like Musk but has also been plagued by cost overruns and delays.
CALIFORNIA | LOCAL
December 22, 2012 | By Patrick McGreevy, Los Angeles Times
SACRAMENTO - When state officials wanted a computer system to track the cost of therapy, transportation and other services for 240,000 disabled Californians, they hired Deloitte Consulting. After four years, the Department of Developmental Services decided the new system didn't work as needed and canceled the project after paying Deloitte $5.7 million. That same month in 2006, the Department of Industrial Relations hired the New York-based company to computerize its monitoring system for workers' compensation claims.
CALIFORNIA | LOCAL
June 10, 2012 | By Adolfo Flores, Los Angeles Times
The price tag for renovating the Rose Bowl is $35 million over budget and the project is now behind schedule because of unexpected construction setbacks, Pasadena city officials said. Rose Bowl officials said last week that it may now take them until late 2014, about a year longer than planned, to finish remodeling the famed stadium, home of the annual Rose Bowl game and UCLA Bruins football. The renovation, which includes widening tunnels, new electrical systems and a remodeled press box, began in 2011 and was supposed to conclude late next year.
CALIFORNIA | LOCAL
January 12, 2012 | By Carla Rivera, Los Angeles Times
An independent panel looking into the Los Angeles Community College District's troubled rebuilding program found that the nearly $6-billion effort was hampered by a lack of leadership and accountability and that lax controls allowed large numbers of costly changes midway through projects. The findings are contained in a report released Wednesday by a nine-member panel of business and educational leaders who were charged with reviewing the successes and failures of the 14-year construction program funded by taxpayer dollars.
CALIFORNIA | LOCAL
November 17, 1993
It would have been naive, to say the least, to expect a public works project as big as Los Angeles' new Red Line subway to be built without cost overruns and other problems. That said, disclosure of the added costs is truly mind-boggling and extremely troubling especially in that the Red Line was--at the original estimate of $1.45 billion--already the most expensive U.S. subway project ever.
BUSINESS
February 8, 2000 | From Bloomberg News
Litton Industries Inc. on Monday warned that fiscal second-quarter profit will be below forecasts because of cost overruns on contracts to develop guidance and control systems in combat ships and helicopters. The company's shares fell 14% after it said earnings for the quarter ended last week will be about 80 cents a share. It was forecast to earn $1.05, the average estimate of analysts surveyed by First Call/Thomson Financial. Woodland Hills-based Litton, the No. 1 U.S.
OPINION
January 7, 2012
California's proposed bullet train took another shot this week when an independent review panel issued a report concluding that the project wasn't financially viable. This followed negative reviews from the state auditor, the inspector general, the legislative analyst and the UC Berkeley Institute of Transportation Studies. It's hard to argue with such a distinguished group of experts, whose logic is unassailable. No source of funding has been identified for the project beyond the initial segment in Central California, they pointed out. Moreover, the location of that segment poses grave risks; if it were built near Los Angeles or San Francisco, it would still have major public benefits even if no more money could be found to extend it, but a spur from Fresno to Bakersfield alone would be a costly train to nowhere.
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