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Boston costs escalate further

News

COST OVERRUNS on the £7.6bn Boston Artery project in the US are likely soar by another £875M, according to leaks of a federal government report into the US's largest civil engineering project.

The report - due out later this week - is also expected to criticise the management of the project and the chairman of client Massachusetts Turnpike Authority Jim Kerasiotes.

Most of the new cost overruns are thought to come from the Federal Highway Administration's refusal to accept that MTA could use the proceeds of an insurance plan worth £516M to fund the project.

Pressure on the Bechtel\Parsons Brinckerhof joint venture which is programme managing the project is likely to grow if the Federal auditors' report confirms that project costs could rise by another £875M to £8.5bn.

Federal auditors spent two weeks last month scrutinisingthe balance sheet of the nine year project. The FHA - which is the main funder of the scheme to replace Boston's elevated highway with an underground tunnel - called in the auditors last month after it emerged unexpectedly that the £6.75bn project was £875M over budget (NCE 16 March).

The report is the result of an assessment by the FHA of the role of its supervisory teams. The FHA wanted to determine the effectiveness of the project's financial reporting system, investigate the cost overrun and identify potential cost saving measures.

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