West Lake price tag quietly jumps by $94M to $665M; Double tracking costs rise to $312M
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RDA Resolution 17-02
September 7, 2017-At a meeting of the Northwest Indiana Regional Development Authority (RDA) today, Board members authorized $750M in borrowing to finance over $977M in projects along the South Shore Rail line. The resolution was passed unanimously with no discussion by Board members. The $977M figure represents $665M for the West Lake Extention and $312M for the double tracking project. During a presentation to the Board, NICTD (operator of the South Shore Line) General Manager Mike Noland indicated that the project may come in under budget. “If we did this project today, it would cost $490M” Noland told the Board. Despite that, Noland insisted that Federal Law requires them to include 25% of the cost for anticipated overruns.
The RDA moved their scheduled September 14, 2017 meeting to September 7 in order to accomodate a Friday submission deadline that NICTD must meet in order to apply for federal funding for the two projects. According to Noland, one-half of each project will be paid for by the Federal Transit Administration. NICTD will be asking for $332M for the West Lake Extension to Munster and $156M for the project to double track the existing line east of Gary’s downtown station. The funds for the West Lake Extension are to come from the FTA New Starts program. President Trump has called for elimination of new starts grants.
According to an analysis by Randal O’Toole, costs under the New Starts program have skyrocketed to an average of $198M per mile. Based on that figure, the 9 mile West Lake Extension would cost closer nearly $2B. In fact, O’Toole also analyzed cost overages in Federal New Starts programs. Only one project ever came in under budget and that was in 1997.