King County will recover $144 million in a dispute about tunnel cost overruns in the Brightwater sewer project. A look at similarities — and differences — between this tunnel battle and the Seattle debacle involving Bertha.
Here are some tunneling cost overruns the public won’t have to pay.
Contractors owe King County $144 million that ratepayers spent to finish the Brightwater sewer project after a tunnel-boring machine stall in 2009, a state appeals court ruled last week.
The county’s win should save homes and businesses an average $1 a month on sewer bills during the next five years, said Christie True, county director of natural resources and parks.
The case shows it’s possible for a local government to prevail in a big-money tunnel dispute — while the state’s Highway 99 project likely enters years of litigation over damaged tunnel-boring machine Bertha.
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Also, the county won using the same law firm, Stoel Rives, that the state hired to defend itself from more than $125 million in expected Highway 99 tunnel claims.
Adding to the intrigue, the Brightwater case included Tutor-Perini, a 45 percent owner of Seattle Tunnel Partners (STP) on the Highway 99 project. Tutor-Perini, which has a track record of being relentless in court, got entangled in Brightwater because it bought one of the sewer project’s contractors, Frontier-Kemper Constructors, in 2011. Frontier-Kemper was 20 percent of a team that included Vinci and Parsons RCI.
Ron Tutor, chief executive of California based Tutor-Perini, told analysts last week the company will take a $24 million third-quarter loss on Brightwater.
The money was paid two years ago, but the contractors fought in court until last week.
Meanwhile, STP has requested at least $125 million from the state Department of Transporation, while also trying to collect insurance money. So far, the state and insurers have denied payment.
King County’s sewer case involved a 13-mile, four-tunnel project from a Bothell treatment plant to a Puget Sound outfall north of Richmond Beach.
In the sewer-tunnel ruling, the Washington State Court of Appeals upheld a $144 million jury verdict from 2012, and rejected contractors’ arguments that the county should pay for unpredictable and frequent variations in soil types and groundwater pressures. The jury did award $26 million to contractors, based on highly abrasive soils that damaged two machines.
The team fixed one machine, which finished a tunnel. However, County Executive Dow Constantine terminated the contract for the other machine. He hired a different Brightwater tunnel team, JayDee-Coluccio, to finish the last 1.9 miles of the final sewer tunnel, after JayDee dug two others successfully.
That was a gamble by Constantine, who entered an emergency agreement with no fixed price.
“I made a tough choice. It was the right choice. We’ve been vindicated,” he said this week.
What it portends for the Highway 99 tunnel is unclear.
Unlike the sewer project, STP has blamed Bertha’s Dec. 6, 2013, stall on a steel pipe that the state left in the ground. On the other hand, a new bearing and extensive reinforcing steel installed by machine supplier Hitachi Zosen suggest Bertha suffered other weaknesses. STP’s insurers are trying to deny coverage, and they contend the machine was “underdimensioned.”
Bertha is being reassembled at the Seattle waterfront and is scheduled to possibly restart in late December.