Vol. 20,  No. 8 April 19 - May 2, 2007


No Takers
Contractor Bows Out As Plant Costs Rise


Major construction on the controversial water filtration plant being built in Van Cortlandt Park, already two months behind schedule, ran into another major obstacle when the contractor for the project withdrew its $1.127 billion bid.

This means the $2 billion Croton Water Filtration Plant will definitely cost another $200 million, and maybe more, depending on how much longer this new twist delays the project.

The original contractor, a consortium of three large contracting firms, Pirini, Tutor-Siliba and O & G, dropped its bid last week, saying it couldn’t build the plant at the price it initially offered, which was the lowest of two bids.

In turn, the Department of Environmental Protection (DEP) offered the job to another consortium trio, Slattery-Skanska, Gottlieb-Skanska and Tully, which originally bid $1.3277 billion for the filtration plant project.

The second consortium is now deciding whether it can build the plant at the cost it initially bid for it, said DEP spokesman Ian Michaels. He added that the DEP has not set a deadline for the consortium to make a decision.

If the consortium decides it can’t build the plant for $1.3277 billion, then the DEP will be forced to re-open the bidding process, Michaels said. Since the process has already been done once, he said, the agency should be able to “expedite” the process this time around.

In general, Michaels said, construction prices have been on the rise for the past couple of years, which means that if the project is re-bid, the cost of the project will most likely go up.

In 2003, the DEP estimated the total cost of the plant would be $992 million. Then, last November, the Norwood News reported, and the DEP acknowledged, that the cost of the project had doubled to around $2 billion due to skyrocketing construction costs and design modifications, which caused the completion date to be moved back another year, to 2011. The $1.3277 billion bid for major construction doesn’t include the cost of site preparation, design work, construction management or the $243 million that the DEP is earmarking for Bronx park projects (to offset the loss of park space in Van Cortlandt).

Now, the 2011 completion date appears in jeopardy, though Michaels said the DEP doesn’t anticipate moving the date back any further.

“What it obviously means is more delays and more money,” said Anne Marie Garti, a local activist who has watched in dismay as the plant’s pricetag continues to rise. “There’s just a huge number of questions. Nobody seems to be looking at [the practical elements of the project], they just seem to be stumbling along. Who’s idea was it to build this filtration plant in a giant rock hole anyway?”

Water Rate Hearing

One of the unfortunate by-products of the rise in the DEP’s capital costs, such as the building of the Croton Water Filtration Plant, is its affect on city water rates, which is significant.

This year, the New York City Water Board is considering a proposal to raise rates for water by 11.5 percent starting on July 1, 2007. The increase is the largest increase in 15 years and follows an increase of 9.4 percent last year. The Board is projecting annual increases of more than 11 percent for each of the next three years.

The rate hike will directly affect homeowners and building owners, and will likely affect renters as well, as increases in operating costs get passed down to tenants in the form of larger annual rent hikes approved by the Rent Guidelines Board.

Over the next few weeks, the Water Board will hold public hearings in each of the boroughs to decide whether to approve the proposed rate hike.

The Bronx hearing will be on Wednesday, April 25 at 9:30 a.m. at Lehman College (Carmen Hall, b-34).

Call Kevin Kunkle at (718) 595-3601 to register for the hearing.

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