Cost of County Tunnel Rises to $459M

Editor's Note: This story misstated the cost of San Diego County Water Authority’s San Vicente tunnel and pipeline system. The story quoted the San Diego Union-Tribune, which posted this correction. 

The cost of building a tunnel for a massive pipeline approved by the San Diego County Water Authority in 2005 has ballooned from around $200 million to $459 million, it was reported today.

The 11-mile tunnel for the San Vicente Pipeline from Rancho Penasquitos to the San Vicente Reservoir was estimated at $161 million by an engineering firm, and the low-bidder came in at $198 million, The San Diego Union-Tribune reported.

But by the time of a ribbon-cutting ceremony in January, the cost was put at $342 million.

Five days after that, when General Manager Maureen Stapleton addressed the San Diego City Council to explain a rate increase in late January, she put the cost at $459 million, the newspaper reported.

Stapleton declined to discuss the price with the Union-Tribune.

Now, the principals involved in building the pipeline are in litigation.

Water board chairman Michael Hogan told the newspaper his colleagues knew the project would cost more than $198 million when it was approved in 2005, even though their four-page staff report that day made no mention of additional costs.

"This project was thoroughly discussed by the board, and I certainly believe all of the board members have a comprehensive understanding of the project," he stated in a prepared response.

The pipeline was part of a emergency-storage plan adopted by the water board in 2000. The tunnel, which runs from west of Interstate 15 to the San Vicente Portal south of the dam, is a 103-inch pipeline that supplies central and southern San Diego County when imports are unavailable.

The water agency and the general contractor, Traylor Shea Joint Venture, are in litigation, with the contractor asking for $140 million, claiming breach-of-contract, among other things.

A Massachusetts subcontractor claims the water authority inflated the costs in anticipation of a settlement of that lawsuit. He also says he was forced out of business by infighting between the agency and Traylor Shea.

"They are trying to show as high a cost as possible, so when the lawsuit is complete they can say "See, we came in below budget,'" said Bill Walsh of W. Walsh & Co. "But the job did double in cost, and they put me out of business."

In June, the contractor sued the water authority for up to $140 million, claiming that it mislead the company about the difficulty of tunneling through rocky terrain.   

"The harder-than-represented ground caused thousands of hours in downtime to reconfigure, repair or replace components of the digger shield during which production was essentially at a standstill and labor was idle,'' the lawsuit says.

Lawyers for Traylor Shea did not return calls to the Union-Tribune seeking comment.   Walsh, hired by Traylor Shea to line the tunnel in cement, said agreed to do the job for $4.5 million, but he claims $1.9 million was withheld after agency officials questioned the workmanship.

Walsh said Traylor Shea was paid for the work his company did, but the prime contractor did not pay him. He settled with Traylor Shea for $400,000 last month, saying he could not afford to litigate the issue any more.

"We were chum in the water between two fighting sharks," he said, adding that about 45 people lost their jobs when he dissolved his business.

New pipelines and other improvements are paid for by the sale of water to members of the water authority. The regional board has raised the price of wholesale water over the past four years, triggering rate hikes by cities and water districts across the county.

-City News Service