February 20, 2009 5:36 PM
FasTracks price will drop, but RTD may get less to pay for it
Ever see the cost of a big public project go down?
Brace yourself.
FasTracks' price tag, only recently inflated to $7.9 billion, almost certainly will show a drop in the next week or so. But it won't be as big a help to RTD as you might think, because something else also is going down.
That's RTD's revenues to pay for it.
RTD had expected to announce the new bottom line for FasTracks in a few days, Feb. 24. It has had its consultants and cost estimators working on it since the recession has reversed the sharp rise in construction costs of the last few years.
But the transit agency has pushed the announcement back to March 3, when it also will release its new financial plan to pay for it.
The reason? With local officials nipping at its heels over the possibility of some rail lines being cut while others are built, RTD didn't want to raise their hopes one week by announcing lower lower costs only to dash them the next with even more dismal drops in its ability to pay for it.
In fact, it's possible that the current $2.1 billion gap in FasTracks - only $5.8 billion projected to be available through 2017 to pay for $7.9 billion in work - could grow in the $5.8 billion in available resources drops more than the $7.9 billion price tag.
In 2004, we were told that FasTracks would cost $4.7 billion for everything. The figure was based on a lot of estimating on then-current plans for each corridor that still lacked a lot of detail, and projecting inflation rates into the out-years to 2017.
But unprecedented jumps in commodities needed for civil construction, particularly steel, concrete and copper in 2005 skewed the whole graph at the outset and put all the estimates through the ceiling.
But worse for RTD, with the recession hitting, sales taxes are down - 9.7 percent in December alone and 1.3 percent in 2008. That skews the other side of the equation - the ability to pay for all of this - in the wrong direction.
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