AUSTIN (Talk1370.com) -- Two light rail lines and an underground tunnel approved by voters as a part of Project Connect are expected to cost nearly twice as much as originally estimated, according to a new report.
Project Connect leaders say the original cost estimate for the Blue Line, Orange Line, and tunnel portions amounted to $5.8 billion. Changes to the scope of the projects, along with real estate, inflation, and supply chain costs are expected to add another $4.5 billion, bringing the total to $10.3 billion.
"The Project Connect program is not immune to the global and national economic pressures that everyone is feeling," program officer David Couch wrote in the memo sent to the CapMetro board, the Austin Transit Partnership board, and the Austin City Council "Transit, airport, highway, utility, housing and commercial projects are all seeing cost increases. As you all know, Austin is experiencing these impacts at an even higher level than the national average due to the unprecedented growth we are experiencing."
Voters approved Proposition A in November 2020, dedicating 8.75 cents of the city's operations and maintenance tax rate to Project Connect - a public transit plan estimated at $7.1 billion at the time. Officials have consistently aimed at having federal funding provide nearly half of the project cost.
Despite the increase, officials say there is not a requirement to change the tax rate. "As the cost estimates for the program change, there is not a requirement to change the tax rate that funds the program," officials said in a statement. "Instead, changes in program costs could result in adjustments to project phasing to balance funding of construction and operations of the system. The Project Connect team remains fully committed to fulfilling the promise to build the program voters approved in November 2020."
According to the new estimates, real estate costs for the Orange and Blue lines were originally estimated at $250 million. An increase in affected parcels, along with rising real estate values, has resulted in a net increase of $940 million, pushing the estimated real estate costs to $1.19 billion.
Rising inflation is also another factor, with the annual construction cost escalator being raised from 3.5% to 5.0% - a potential impact of $380 million.
An increase in the tunnel length for the Orange Line - more than two miles - and additional underground stations for both the Orange and Blue Lines will add approximately $2.1 billion to the original $2 billion cost estimate.
The new estimates don't impact other portions of the Project Connect plan, including improvements to the MetroRapid and MetroRail Red Line services that are already under development.
Officials say the cost estimates are expected to be finalized later this summer, when the project reaches 30% design. "The 30% design cost estimates will bring a further refinement of the costs associated with real estate, inflation/supply chain, program progression and scope," the report said.