CONTRACTOR DEFENDS WORK FIRM JUSTIFIES COST OF DUST-CONTROL PROJECT.

Byline: Dan Laidman Staff Writer

A major engineering firm that has drawn scrutiny for its work for the city of Los Angeles on an Owens Valley dust-control project fired back Tuesday in a letter.

CH2M Hill defended its work and questioned the Department of Water and Power's assertion that project costs have nearly tripled from estimates of $120 million in the late 1990s to the $400 million range today.

``Many agencies and other entities involved with the Owens Lake project have known and reported for almost a decade now that the project, as defined, would cost in the range of $400 million,'' Jack Baylis, senior vice president at CH2M Hill, wrote in the letter.

The work is designed to mitigate environmental damage caused by Los Angeles' historical diversion of Owens Valley water. The city entered into an agreement with local regulators in 1998 to perform the dust-control work, and to date has completed about 23 of 30 square miles.

Mayor Antonio Villaraigosa's new DWP commissioners have called for an audit of the Owens Valley work, and last week they voted to open a new bid process for construction management work there that CH2M Hill had been slated to perform.

Commissioner David Nahai said at the time that his colleagues feared the project could be sinking in ``fiscal quicksand.''

The City Council has gotten involved, too, with budget committee Chairman Bernard Parks introducing a motion in December supporting an audit.

Parks' motion cited the escalating costs and allegations in media reports ``charging that DWP staff had raised concerns about shoddy workmanship and excessive costs being charged by one of the major contractors assigned to the dust mitigation effort.''

CH2M Hill has indicated it plans to participate in the new bid and cooperate with the audit. The letter, addressed to DWP Commission President Mary Nichols and forwarded to the mayor and City Council, reiterates the company's support for the audit while taking umbrage with ``false information and egregious misconceptions'' that have been repeated ``through various official channels.''

With two-thirds of the Owens Lake work done, the letter says, the number of days when local dust levels exceed federal limits has been reduced by 70 percent. Local regulators have indicated they want to expand the work by 9.3 miles, which the DWP has called premature.

While CH2M Hill has provided much of the design and management work, it has not done the actual construction. The letter says there is a widespread perception that the firm has received all $400 million, when in fact its billings have been closer to $90 million, with $25 million going to subcontractors.

The letter references past documents to bolster its contention that officials have long known the project would cost more than $120 million. It suggests that the lower figure might have come from a 1997 estimate by Owens Valley-area regulators, but says that number did not take key project components into account.

DWP officials did not respond to requests for comment Tuesday.

Dan Laidman, [phone]

dan.laidman(at)dailynews.com