Muni’s Central Subway extraction project could far exceed original budget 

click to enlarge The boring machines used for the Central Subway will be extracted at the Pagoda Palace site. - S.F. EXAMINER FILE PHOTO
  • S.F. Examiner File Photo
  • The boring machines used for the Central Subway will be extracted at the Pagoda Palace site.

Potential cost overruns have surfaced less than two months after Muni’s Central Subway extraction project in North Beach was approved, although the agency expressed confidence it would be able to stay on budget.

In February, the San Francisco Municipal Transportation Agency board of directors authorized a $9.15 million plan to bring up tunnel boring machines at the Pagoda Palace, an abandoned theater at Columbus Avenue and Powell Street. Of that cost, $6 million was budgeted for construction and design of the extraction process, with the remaining $3.15 million going toward the owner of the building for use of the site.

However, the subcontractor in charge of the extraction project, Barnard Impregilo Healy, has submitted a change order request upping the estimated construction cost of to $10.6 million, citing additional funds needed for the construction of tunnels, demolition, design and site work.

Paul Rose, a spokesman for the transit agency, which operates Muni, said the high initial estimate of the change order proposal is a common opening tactic for construction firms. He said the agency is confident in its ability to negotiate with the firm and has no plans to spend more than the $6 million.

Jerry Cauthen, a former engineer and a member of Save Muni, a group opposed to the Central Subway project, disagreed with the contention that costs could be maintained.

“I’m sure there was a little padding in the change order request, but to suggest that they’ll be able to bridge the gap between $6 million and $10.6 million is ridiculous,” Cauthen said. “I think BIH will tell Muni that if they want this work done for $6 million, they’ll have to go somewhere else, and the agency just doesn’t have that many options for this kind of project.”

Cauthen also noted that the subcontractor excluded from its work scope several project specifications, including surface repair plans for buildings outside the Pagoda site. Those ancillary costs are not included in the transit agency’s $6 million budget and will likely drive up the price tag of the plan further, he said.

Representatives from Barnard Impregilo Healy declined to speak about the issue.

The transit agency has said it will pay for the extraction project through reserve funds and operational savings.

The Pagoda was chosen for the extraction site after the transit agency’s original proposal to bring equipment up in the middle of Columbus Avenue was lambasted by North Beach merchants. The project is expected to take two years.

The $1.6 billion Central Subway will extend Muni’s underground Metro service from South of Market to Chinatown.

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Will Reisman

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