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Silver Line money: MWAA officials approve $250M in additional funding

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The Metropolitan Washington Airports Authority board on Wednesday approved $250 million in additional funding to pay for cost overruns on the second phase of the Silver Line rail project.

The bulk of the increase, about $188 million, will be paid by Dulles Toll Road users. Other funding sources, including Fairfax and Loudoun counties and MWAA, also will contribute based on a funding formula.

The additional money pushes the price tag for the second phase of the rail line to just over $3 billion. The first phase of the rail line, which began carrying passengers in July 2014, cost nearly $3 billion, bringing the total for both phases to about $6 billion.

“Nobody wants to be over budget,” Jack Potter, chief executive of MWAA, said during the board meeting. “But I’m confident that, in hindsight, we’ll have overwhelming agreement that the Silver Line project has been well worth the investment.”

In an interview after the meeting, MWAA’s Drew Hascall, head of the Dulles Corridor Metrorail Project, added: “Certainly we’re not happy that it’s over budget and four years delayed. But what we really focused on was delivering a safe and quality operating system to Metro that will extend the transit network and connect the nation’s capital to its international airport.”

It will be up to Metro to set an opening date, but transit officials say they hope service will begin this fall.

The overruns are the latest chapter for a project that has been plagued by construction irregularities and political finger-pointing. It’s the first rail extension not built by Metro. Instead, MWAA oversaw construction of the project, which included the rail line and a rail yard near Dulles International Airport. But the arrangement led to tension when the two entities disagreed on elements of the project.

Andrew T. Rountree, MWAA’s chief financial officer, said the budget overage will not affect toll rates on the Dulles Toll Road, which already were expected to rise next year. Over the past three years, the authority has refinanced bonds and restructured debt being used to finance the cost of the rail extension. That savings will provide enough cushion to avoid more toll hikes, Rountree said.

Silver Line’s second phase will cost an additional $250 million

MWAA officials blamed the overruns on the project’s complexity, an increase in the cost of building materials, supply chain slowdowns and coronavirus-related restrictions.

Metro took control of the rail extension last month, a milestone that raised the possibility that passenger service could begin this fall. Once open, the rail line will extend Metro service into Loudoun County and include a stop at Dulles Airport.

Hascall said Metro’s recent takeover enabled project officials to begin closing out the project, which is when it became clear more money was needed.

While toll road users will pay for the bulk of the cost overruns, Fairfax County will pay an additional $40 million, Loudoun County an additional $12 million and the MWAA an additional $10 million. Fairfax and Loudoun counties created special tax districts to pay most of the cost of the rail project.

Hascall said the additional funding will cover costs related to the closeout of the rail project, including claims by contractors for compensation tied to delays. It also will include $33 million that Metro can tap to cover expenses for issues that arose during construction, including concerns about track work and defective panels installed at five of the six new stations. Metro has pushed for the creation of such a fund to cover future maintenance and upkeep of the rail line. A similar pool of $15 million was set aside to cover maintenance and upkeep tied to the rail line’s first phase.

Metro confirmed this week that the two agencies reached an agreement on the fund.

MWAA officials had hoped that lessons learned from construction of the project’s first phase would enable them to avoid delays and cost overruns. Initial bids to build the rail line came in below MWAA’s estimates.

Those hopes were quickly dashed when contractors encountered problems. For example, an early decision to comply with new requirements for storm-water management caused a 13-month delay, a decision MWAA’s Potter said Wednesday was “absolutely the right thing to do.” The line originally was scheduled to be completed in 2018.

Silver Line’s second phase more problematic than its first?

The project’s first phase, built by Bechtel, was six months late and more than $220 million over budget. It included five stops, including four in Tysons and one in Reston. The second phase will add six more stops to the Metro system.

Bechtel had hoped to win the contract to build the rail line’s second phase, but MWAA turned to Capital Rail Constructors, a joint venture between Bethesda-based Clark Construction Group and Kiewit Infrastructure Group. Hensel Phelps was hired to build the rail yard that also was part of the project.

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