BART SFO extension's unfinished financial business
- Published Tuesday, June 17, 2003, in the Redwood City Independent
The extension's unfinished business
BART's start not the end to all problems
By Sara Zaske
Millbrae BART trains may start rolling into four new Peninsula
stations in June, but that does not mean the work on the 8.7-mile
Peninsula extension is complete.
Long after the concrete has set, some hard work will still be
pouring into several unresolved issues on the project. BART and its
construction contractor, Tutor-Saliba, have not yet worked out who
will pay for the last round of delays on the $1.5 billion project.
And the final agreement between SamTrans and BART over the financing
of line's operation has yet to be inked.
Nov. 7, 2002 was set for Tutor-Saliba to deliver "the keys" to BART,
allowing the transit agency to begin a 10-week period of safety
tests. With each day beyond the designated handing-over date, Tutor-
Saliba accumulated "liquidated damages," according to BART
spokesperson Mike Healy. In other words, under the contract, BART
could charge Tutor-Saliba $64,000 for every day they were late. The
final turnover of the project to the transit agency occurred in mid-
The penalties racked up by Tutor-Saliba could amount to $9.7
million, but both BART and Tutor-Saliba downplay the seriousness of
the issue. "We will still be negotiating a settlement with the
contractor," Healy said. "On large contracts like this, there is
nothing unusual about this."
Ron Tutor, president of, Tutor-Saliba, said BART has not levied any
charges against his company to date. In fact, he postulated that the
transit agency might actually owe his business for the work.
"One side owes the other," he said. "There were literally dozens of
changes during the period in question. We will go through a
scheduled analysis to see if they are liquidated damages, but it may
turn out quite the contrary -- that they owe us for the time."
Tutor-Saliba's accounting practices have already come into serious
question on two urban transit projects. In August 2001, a Los
Angeles Superior Court judge ordered the company to pay $30 million
to the Southern California's Metropolitan Transportation Authority
for work done on the city's subway system. The MTA claimed that
Tutor-Saliba falsified charges on change orders and used minority
fronts to win contracts.
While the company appeals the ruling, San Francisco-has cited
similar charges in a pending suit against the company for the San
Francisco Airport International Terminal project.
However, Healy said that BART had a positive working relationship
with the Tutor-Saliba. In addition to the Peninsula extension, Tutor-
Saliba also worked on the Pittsburg/Baypoint extension, a project
which arrived on schedule. "Relatively speaking, our experience with
Tutor-Saliba has been pretty good," said Healy.
Likewise, Tutor expressed confidence that the two agencies could
agree on the issues regarding the delay.
Another apparently amiable disagreement is occurring between
SamTrans and BART. Considered partners on the extension project, the
two agencies are still hashing out details on the operations of the
line. Under the original agreement, BART employees will be staffing
the stations and running the trains, but SamTrans will be picking up
the tab. To pay for the operations costs, SamTrans will receive all
fare revenues for trips originating or ending in San Mateo County
and half of the parking fees.
This money is supposed to match the cost of operations, but with the
economy patting a damper on the number of transit riders, the
Peninsula agency will likely have to subsidize the extension line
service for several years, if the original arrangement holds.
Neither BART nor SamTrans would reveal what issues remain on the
table, but SamTrans spokesperson Janet McGovern said that the ongoing
negotiations will not impede the June 22 launch of the transportation
Contact Sara Zaske at 650-652-6736 or szaske@...