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Boston costs set to escalate further

BOSTON'S CENTRAL Artery project is set to go even further over budget if, as expected, US Federal overseers adopt a more aggressive management role, Parsons Brinckerhoff 's head of programme management Tony Lancellotti warned this week.

Lancelloti told NCE that the involvement of the US Federal Highway Administration, which is funding 70% of the scheme, would slow decisions on remaining contracts and add to the scheme's final cost.

The £7.6bn project to reroute Boston's elevated Central Artery underground and connect it with the city's airport is already projected to finish £875M over budget (NCE last week). A two week review by Federal auditors of the project's accounts since 1991 was ordered when the scale of the cost overrun became apparent. It is due out next month.

Lancelloti, who heads the joint venture of Bechtel and Parsons Brinckerhoff which is programme managing the scheme, said this week: 'My main fear is that the pendulum could swing back so far that decisions could be held up in a way that could cost us more money.

For example, by asking us for more alternatives to design.'

Lancellotti urged the FHA this week to maintain its current management position. He said: 'The Federal oversight on this project has been appropriate. They have been very engaged and already said no to many of our funding requests.'

A recent report from the US Department of Transportation's Office of the Inspector General - Controlling the cost of major infrastructure projects - hinted that it was set to take a more aggressive stance in future.

It stated: 'Our work has shown that when Federal oversight is ineffective and firm limits on the amount of Federal funds to be authorised for a project have not been established, grantees do not adequately control costs. The Central Artery project in Boston is a good example of these circumstances.'

In response to these threats, the office of the Governor of Massachusetts Paul Cellucci last week moved to calm the FHA fears by filing a plan showing the overrun could be met entirely by the state. The plan would involve the project client, Massachusetts Turnpike Authority, raising £375M in bonds and contributing £125M in surplus funds.

But a separate review of the project finance from US programme manager O'Brien Kreitzberg has also warned that an extra £190M could still be needed to complete the project.

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