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Boston tunnel costs reach new heights

COSTS ON Boston's central artery tunnel project have escalated further according to a new review of the project by accountant Deloitte & Touche.

It has emerged that the final cost of America's biggest civil engineering project is likely to rise by another £500M to £8.75bn.

The project involves burying the elevated highway in tunnel through the city centre and extending it to Logan Airport.

The project client, Massuchusetts Turnpike Authority, has until 1 October to show the project's principal funder, the Federal Highway Administration, how it proposes to finance the latest overrun.

The FHA stated earlier this year that it would not fund the project beyond the £6.75bn figure set in 1997 and that the MTA would have to pay for any overruns.

With the project schedule running six months behind, fees for the project management joint venture of Bechtel and Parsons Brinckerhoff - both of which have recently won big programme management contracts in the UK rail sector - will increase further.

The Bechtel/PB joint venture's fees will have to be raised £41M on top of the £160M already added to its original budget, according to Deloitte & Touche The accountancy firm recommended that the joint venture scale down these costs through further efficiencies.

'The project should evaluate whether it is possible to realise savings on these costs with the implementation of improvements in current staffing practices, transition planning and administration of base and incentive fee policies.'

Other areas of escalating cost identified in the Deliotte & Touche review include changes to contracts, costs of rescheduling contracts to make time savings, new designs and contracts with utilities.

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