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Utility says WTP4 costs up, but project on track to come in under budget

Tuesday, May 31, 2011 by Elizabeth Pagano

The estimated cost of Water Treatment Plant 4 has grown by almost $7 million over the past three months, though the Austin Water Utility says it still expects the project to ultimately come in about $5 million under budget when it is completed.


AWU Director Greg Meszaros presented WTP4’s quarterly report last week to the Council Audit and Finance Committee, and reported that the project was going smoothly and on schedule.


As of April 30, the utility estimates that WTP4 will cost $503.2 million to complete. That is $4.8 million less than the $508 million budget baseline that was created when the project site moved to Bullick Hollow, almost three years ago.


It is, however, $6.7 million higher than the last quarterly report, which estimated the total cost of the project at $496.5 million.


According to Meszaros, the revised estimates show the project coming in under budget in all areas—save “other costs” which are now anticipated to be $25.7 million. That is more than originally budgeted.


The city has spent $115.8 million on the project so far, with $270 million under contract, the director reported. However, several large contracts have yet to be awarded.


The treatment plant remains the subject of some controversy, with environmental groups such as the Save Our Springs Alliance and the Sierra Club contending that the city could provide the water the plant is expected to deliver through conservation rather that building the plant. In addition, neighborhoods near where the plant’s transmission lines are planned have protested over the both the environmental impact of tunneling under the Balcones Canyonlands Preserve and the disruption the construction would inflict on their lives. However, a poll done earlier this year showed that the majority of Austinites were in favor of the plant.


AWU is currently advertising for bids on the Jollyville transmission main, which is expected to come in at about $100 million dollars. Those bids will be opened in June.


“The Jollyville Transmission main is the single largest piece of the project,” said Meszaros. “Jollyville will tell a lot. The last few years our most competitive bidding and lowest costs have come on pipeline elements.”


Meszaros explained that the budget was revised upwards from last quarter to account for a shift in the commodities market and environmental concerns. He said the project has taken extra precautions in tunneling under the BCP in order to meet environmental goals.


“I think that is adding some costs that we didn’t anticipate, but appropriately. That goal is as important to us as getting a project that meets our schedule and water treatment goals,” explained Meszaros.


Meszaros estimated between 100 and 150 construction workers on-site currently, and anticipated 300 by year’s end. The large work force has had some unanticipated effects, given the limited size of the local construction industry.


“One of the things that is occurring at the plant is it’s kind of creating its own economy. We are sucking in so many contractors. I think that is influencing the bidding,” said Meszaros. “We actually resequenced the project to delay certain project elements because the contractors were saying ‘Look, we’re not even in the position to put a good bid on that now because we’re so damn busy on this project.’”


“This plant work is specialized, there are not hundreds of people that do it—there’s just a handful. You’ve got to watch that you don’t bid too much work in such a short time frame that the contractors really just can’t keep up with it,” Meszaros told In Fact Daily. Meszaros explained that despite the re-sequencing, the project remains on schedule.


“It looks like so far you’ve doing a really good job in keeping the budget you set forth in the first place, I look forward to seeing this thing coming in at, or below, or maybe just a tiny bit above the $508 we started with,” said Council Member Bill Spelman.

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