November 1, 2016

It's been a few months since I've shared information about the Green Line Extension (GLX) so I thought it was a good time to provide an update on the status of the project. Based on the information I have, here is where the GLX stands. The Federal Transit Administration (FTA) has been reviewing the MBTA's updated submission detailing the project's changes (i.e. station redesigns) and cost estimates.

• The FTA seems to be in general agreement with the MBTA's new project cost estimates as well as its revised project schedule;
• The FTA seems to be in general agreement with the MBTA that project changes do not substantially alter the project. This is good news because it means there is no need to start all over "at the back of the line".

The most important outstanding issue is staffing. The FTA has directed the MBTA to hire a team of qualified professional project managers and engineers to oversee the GLX BEFORE the FTA undertakes the last and most important step in their process – the risk analysis.  When the project started, there were just two MBTA employees assigned a full-time oversight role.  The FTA and the MBTA both agree that was insufficient.  The MBTA has done some initial outreach to hire some qualified professionals but has not done so yet.

If such a team is not in place by the end of this year, the FTA could do one of two things …

• Conclude that the lack of adequate oversight requires a significant increase in the MBTA's budget for project contingency costs.  Remember, the FTA will not increase the amount of assistance they have already promised.  The increased budget could create great difficulty for the MBTA in terms of fulfilling its funding obligations.

… OR …

• Refuse to move forward with their risk analysis.  This decision would effectively end any hope of amending the agreement between the Federal government and the MBTA. 

So, as I see it the State has five possible paths to choose from …

• Kill the GLX altogether and eat the $800 million the State has already spent on the project.
• Build the scaled down version without Federal matching funds.  This would require the State to spend another $1.5 billion of their own money, walking away from $1 billion in Federal funds.
• Give up the Federal funds and try to scale the project back further in order to reduce State costs.  But most observers don't think that is possible and still end up with a project worth having.
• Move forward under the original agreement and related plans.  These are the plans the State now estimates would cost a total of $3 billion.  The Federal government would pay their agreed-to amount of $1 billion and the State would pay $2 billion ($1.2 billion more than they have already spent).
• Hire the professionals required, which would likely get the Federal government to agree to the MBTA's amendments, then build the scaled down version by spending $500 million of their own money more than they have already spent – and receiving $1 billion from federal matching funds.

I think it is obvious to anyone that Option 5 is the ONLY thoughtful choice for the State at this point in time!  It costs the State the least and gets them an improved transit system.
So,  the MBTA simply needs to hire a team of qualified professionals dedicated to overseeing this $2.3 billion project and then the FTA will likely approve the amended project. 
For those of you who may not have followed every step of the project, here is an overview:

• The State originally estimated the entire project would cost around $2 billion.
• In 2015 the Federal government agreed to pay about $1 billion of the total $2 billion GLX cost because the project met all requirements regarding environmental improvements, ridership, maintenance of effort (i.e. costs associated with GLX will not degrade existing T service), and the state's ability to pay its 50% share.
• Federal funds are not "up-front" funds – they are reimbursements for funds properly spent on the project.
• The state awarded some contracts for materials and some construction began along the project.  In early 2016, the MBTA learned of potential cost overruns of $1 billion, which would bring the total cost to $3 billion.

I have continued to stay in touch with the State and FTA on the GLX and am encouraged by the progress thus far.  I will continue to keep you informed.