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 LOS ANGELES, Oct. 1 /PRNewswire/ -- The final cost of building the Metro Red Line segment between Union Station and Westlake/MacArthur Park in downtown Los Angeles, including all change orders, could be $30 million to $40 million below the project's approved budget of $1.45 billion, according to officials of the Rail Construction Corp. (RCC), the MTA's construction subsidiary.
 RCC officials also said total project costs may only rise 15 percent above the original $1.25 billion budget, far less than other recent U.S. subway projects. (The original budget was approved in August 1986.) The RCC compared Red Line costs with those of subway projects in Washington, D.C., Atlanta, Baltimore, Miami, and San Francisco (see chart).
 "Not only did we bring this project in under the revised budget, but we opened the Red Line eight months ahead of schedule," said Ed McSpedon, RCC chief executive officer.
 The RCC assumed responsibility for construction of the Metro Red Line project from the Southern California Rapid Transit District in July 1990. An independent assessment of construction costs conducted at that time established a $1.45 billion estimate for completion of the project, $200 million above the original budget.
 "While change orders pushed up costs in completing Segment 1, we are experiencing far fewer change orders in building Segment 2," McSpedon said. "It will be at least another 18 months before we can close the books on such a monumental project, but this report is a very favorable sign that the project management team did its job well on what is widely regarded as the most technically complex public works project ever built in Los Angeles."
 The first segment of the Red Line opened for service Jan. 30, 1993, some eight months ahead of schedule. It provides service at five stations to a steadily increasing ridership, currently estimated at 15,000 daily passengers, a total of more than 2.89 million since opening day.
 The cost comparisons are part of a status report on the management performance of the Metro Rail system that will be presented Oct. 7 at the first of a series of briefings for the MTA board of directors.
 The RCC report details the types of change orders that increased construction costs by $206 million -- 36 percent -- on Red Line Segment 1. The largest single category of Segment 1 construction cost increases -- 13 percent -- was due to changes in work scope not covered in the original contract. An example was the total remodeling of the Union Station baggage handling area as part of an agreement giving Metro Rail construction access to Union Station.
 Design changes represented another 7 percent of construction cost increases and, for example, allowed the RCC to modify the communications system to meet revised LAPD requirements.
 About 5 percent of Red Line construction cost increases was the result of schedule changes associated with a variety of situations, including occasional delays to implement additional safety measures prior to tunneling under downtown buildings.
 Another 3 percent of construction cost increases was attributed to "differing or unforeseen conditions," such as underground obstructions, pockets of hazardous materials, or subsurface conditions not discovered prior to the start of construction.
 Non-technical administrative changes and management issues created approximately 3 percent of Red Line construction cost increases. Administrative changes included budgeted contract options for such items as the purchase of additional rail ties for future rail construction. Management issues included actions taken by the construction managers that contractors claimed caused delays in project completion.
 The remaining 5 percent of construction cost increases was labeled "Other" and included a wide variety of changes and claims that RCC managers said could not easily have been attributed to a single category. An example is the final adjustment of a contract to account for the actual quantities of materials used to complete construction.
 The RCC report also points out that change orders have been drastically reduced in the construction of Segment 2 from Westlake/MacArthur Park to Wilshire/Western and Hollywood and Vine. As of September 1993, Segment 2 had incurred change orders amounting to only a 3 percent increase in overall construction costs.
 "Our success in reducing the construction costs of Segment 2 is due in great part to lessons we learned in building Segment 1 and to the Total Quality Program we have initiated," said Joel Sandberg, RCC project manager for Red Line Segment 2. "Even though Segment 2 is almost twice as long and has three more stations, the project team is confident they can complete it within 10 percent of the cost of building Segment 1."
 -0- 10/1/93
 /CONTACT: Bill Heard or Jim Smart, MTA News Bureau, 213-972-4678 or 213-244-7443/

CO: Los Angeles County Metropolitan Transportation Authority;
 Rail Construction Corp. ST: California IN: SU:

LS-LS -- LA033 -- 8011 10/01/93 19:02 EDT
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Publication:PR Newswire
Date:Oct 1, 1993

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