Wednesday, April 2, 2014

Streetcar Delay Cost Cincinnati $1 Million


Cincinnati Enquirer:
Cincinnati City Council's decision to temporarily shut down work on the streetcar project in December cost almost $1 million – and some delay costs remain unknown.
However, it appears the three-week work stoppage will cost less than originally projected by an independent auditor's report and will not delay the launch of when people can ride the streetcar.
It cost $987,108 for a 20-day work stoppage while City Council debated whether to fully cancel or move forward with the streetcar, project leaders announced Tuesday.
In December, global auditing firm KPMG projected a one-month delay to cost between $1.7 million and $2.8 million.
"It's lower than we anticipated, and I'm pleased with that," said City Councilwoman Amy Murray, who originally favored permanent cancellation.
The delay cost is not added onto the project's overall $133 million price tag, but will be deducted from a $9.4 million contingency fund already in place. So far, $1.96 million of that has been spent – with a majority of construction still to come before the streetcar is operational in September 2016......
The delay cost includes $637,108 for lead contractor Messer/Prus/Delta; $250,000 for the KPMG report; and $100,000 to barricade and secure construction zones during the shutdown. The delay cost also considered two missed days of construction because of sub-zero temperatures, said John Deatrick, the city's streetcar project leader.
The delay cost for passenger rail car manufacturer CAF USA remains unknown – although the KPMG report projects the pause will cost the rail car company between $25,000 and $150,000. Streetcar project manager Chris Eilerman said CAF's delay costs are not expected to be significant.
If KPMG's projections are correct about CAF, the final delay cost would be lower than originally expected. CAF's delay costs are not yet known because project leaders and engineers are reviewing the design of the five, 154-passenger streetcars this week. Results of the review could impact the manufacturer's completion schedule, project leaders said.
So it cost $250,000 (25% of the costs of the delay) for KPMG to overestimate by 70-180% the cost of a delay?  That was a worthwhile investment (according to Amy Murray, for whatever reason).  And even when the report came in, the majority of council was planning on killing the project, until private money was promised for operation costs?  While the streetcar isn't the best expenditure of taxpayer dollars, I'm pretty sure it will help spur the revitalization of Over-the-Rhine and the central business district, which is a benefit to the whole region.  It appears that businesses and foundations realize that, why don't the mayor and council?

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