The MoPac toll project, already a four-year headache for Central Texas drivers, got about $38 million more expensive on Tuesday.
It is also about to get done. Finally.
Central Texas Regional Mobility Authority officials on Tuesday reached a settlement that will result in contractor CH2M getting a total of $159.9 million for the project. Specifically, the deal gives CH2M $21.5 million to drop claims for up to $100 million in added costs, and up to an additional $17 million for tasks added to the project.
Still, the mobility authority contends that it — and by extension, the public — is still getting a bargain for the 11.2-mile-long makeover of North MoPac Boulevard and the addition of two toll lanes.
Officials also emphasized the added payments to the contractor will have no effect on toll rates, which will vary as often as every five minutes based on traffic levels rather than on the project’s cost.
The second section of the northbound toll lane, from Cesar Chavez Street to Far West Boulevard, will open either this Saturday morning or a week later, officials said, depending on whether this week’s rain abates enough to allow final striping of the highway’s new pavement.
And under the settlement the mobility authority approved 6-1 Tuesday, with Williamson County board member David Singleton opposed, CH2M must have the full southbound toll lane ready to go by Oct. 27 or face further financial penalties.
“This is alleviating years and years of litigation,” said Ray Wilkerson, chairman of the mobility authority board. “And let’s be clear: This is not a gift (to CH2M). Yes, we are incurring some extra cost. But to say the contractor is bearing extra cost is an understatement.”
CH2M, in a March claim to the mobility authority, argued that it will end up spending $375 million to complete the MoPac project that it originally agreed to do for $137 million. Quarterly reports for the Denver-based company, soon to be acquired by Jacobs Engineering, indicate it has already written off a loss of at least $120 million on the project.
The project has taken four years, rather than the original estimate of two, because of a variety of challenges: stubborn limestone, labor shortages, bad weather, design delays for relocating a city water main and old utility lines encountered along the way.
The two sides, in the wake of their back-and-forth this spring, went into an informal mediation process that produced the agreement that authority Executive Director Mike Heiligenstein signed Tuesday afternoon. CH2M had already signed it before the deal came before the agency board.
“This is a helluva deal,” Heiligenstein said, pointing to a 2012 agency estimate that final design and construction of the project would cost $171 million. Even with Tuesday’s changes, CH2M will get just under $160 million overall.
The mobility authority’s total cost will come in about $233 million, counting asbestos abatement of old MoPac retaining walls done by another contractor, the preliminary design and environmental work completed before CH2M came on board in 2013, project oversight by an engineering firm, and a handful of minor remaining projects along the road that will be performed by another company.
The project’s original budget, based primarily on available grants to the mobility authority from the Texas Department of Transportation, was $203 million.
To close that nearly $30 million funding gap, the agency is nearing an agreement with Regions Bank to borrow $25 million at about 2 percent interest, officials said, with the money to be paid back within four years from MoPac toll revenue. The agency will also take $5 million from its financial reserves, Heiligenstein said.
The change orders added through the settlement include fire protection installed on the underpasses built south of Enfield Road, alterations to TxDOT duct work along the road’s west side near Camp Mabry, changes in the road’s slope in some sections and improvements to MoPac’s lighting. The mobility authority had already agreed to another $5 million or so in change orders.
But the deal also dismisses CH2M’s plea for more days to be added to the project, and thus makes it subject to a $20 million deduction for finishing the project so long after the date specified in the contract.
CH2M will get $7 million of that $21.5 million settlement once it has completed the full northbound toll lane from Cesar Chavez Street to Far West Boulevard. Mobility authority officials appeared confident Tuesday that near-term milestone will be met.
The contractor will get an additional $10 million when the southbound toll lane (and free lanes alongside) are ready to go, presumably in about a month, and an additional $3.5 million when it completes some remaining sound wall construction. It has until the end of June to get those sound walls done. Some further nighttime closures of outside northbound lanes north of West 35th Street will be necessary to get that done.
A final payment of $1 million would be due, no later than the end of September 2018, when the mobility authority deems all work completely finished.
That debt to Regions Bank will come on top of $230 million that the mobility authority has already agreed to pay from MoPac toll revenue to the Capital Area Metropolitan Planning Organization over the next 22 years, money that the planning agency can then allocate to other local transportation projects.
The MoPac project began construction in January 2014 and was originally estimated to be done by September 2015, meaning that drivers have had to endure an additional two years and change of lane closures and other construction irritations.
“It’s been arduous,” Wilkerson said. “Running right through the middle of Austin and trying to build a road under cars as they drive has been a monumental feat.”
The MoPac tab
Payment to contractor CH2M:
$136.6 million: Original contract amount for CH2M to do final design and construction
+ $21.8 million: Change orders added, or expected to be added, to the project
+ $21.5 million: Settlement signed Tuesday between CH2M and the mobility authority
- $20 million: Penalty for construction finishing late
= $159.9 million total to CH2M
Project cost to the Central Texas Regional Mobility Authority:
$159.9 million: Total payments to CH2M
+ $68 million: Added costs for asbestos remediation on old structures, project oversight, design and environmental work
+ $5 million: Added sound walls, a shared-use path near U.S. 183 and repairs to an RM 2222 bridge abutment
= $232.9 million total project cost to the mobility authority, about $30 million above the original $203 million budget
EYES ON GOVERNMENT
Ben Wear has covered Austin-area transportation since 2003. He has consistently spotlighted concerns about budgets and spending by Capital Metro, the city of Austin and the state Department of Transportation.
Hear from the mobility authority director and see an interactive timeline of the project with this story at mystatesman.com.