Claims by Highway 99 tunnel contractors have risen to $480 million, though the state won an early round in court this past week.
Seattle Tunnel Partners (STP) has increased its claims against Washington state to $480 million, a sign that overruns continue to mount in the Highway 99 tunnel project.
However, the state won an early court dispute this past week, when a Thurston County judge ruled against STP on a key contract issue — though appeals are expected and related cases are underway in other courts.
Meanwhile, the city of Seattle says STP or the state owes as much as $81 million, for potential damage to underground utilities, sidewalks and streets throughout Pioneer Square, blamed by the city on tunnel-related groundwater pumping two years ago.
Last year, Seattle Public Utilities replaced a cast-iron, 20-inch-diameter water main below Western Avenue, after the soil sank 1¼ inches near the tunnel job site.
Seattle sued STP this past week and soon may sue the Washington State Department of Transportation (WSDOT).
Both disputes have the potential to cost state taxpayers, most likely through gas-tax revenues or by taking money from other highway projects.
It’s possible all sides could reach settlements and divide costs, although deals might take years to complete.
The big $480 million case began as a $125 million “placeholder” claim by STP, which blames an abandoned steel pipe for triggering damage to the giant tunnel-boring machine Bertha. The machine overheated and stalled Dec. 6, 2013; it has since been repaired.
The state maintains that under the design-build contract, the contractors are generally responsible for damage and delays, except for unforeseen soil conditions that weren’t flagged in the state’s geotechnical study.
On Friday, a judge in Thurston County Superior Court issued a partial summary judgment in the state’s favor.
A WSDOT statement said, “The ruling is just one step in a long legal process. WSDOT will continue to pursue legal action to protect the taxpayers of Washington.
“WSDOT is pleased that tunneling has gone well since the repaired machine passed under the viaduct [on April 29] and that all parties are fully committed to the successful outcome of the SR 99 Tunnel Project.”
Chris Dixon, STP project director, said Wednesday the cost of repairs and delays was estimated at $125 million back in early 2014 when repairs were thought to require only six months — not two years.
He said the judge last week ruled the tunnel-boring contract waived STP’s right to recover costs from the state to repair Bertha — but “we don’t believe the contract said that.”
Other lawsuits exist between STP and its own insurers, who assert Bertha was initially “underdimensioned” for the job. The Japanese company Hitachi Zosen, which built Bertha, denies this, and also supplied the money and technicians to retrofit its front end. The STP partners, Tutor Perini and Dragados USA, funded a 120-foot-deep access vault to reach Bertha’s damaged cutter area, and now they want to be compensated.
The new $2.1 billion tunnel is meant to replace the aging Alaskan Way Viaduct, which creates noise along the downtown waterfront and could buckle in an earthquake.
Earlier this year, Highway 99 program Administrator Joe Hedges signed a $35 million negotiated change order, to clear up about 100 issues, including costs of a 2013 labor dispute with dockworkers.
WSDOT could also wind up paying $223 million for its own oversight costs, because the project is three years late and now trending for a spring 2019 grand opening.
Pioneer Square sinking?
The city case started with a water main that’s already been replaced under Western Avenue, at a cost SPU says was $11.4 million.
The lawsuit alleges contractors failed to exercise due care, during groundwater removal that enabled crews to safely excavate Bertha’s deep repair vault.
Complicating the argument: The quarter-mile section was 116 years old, and Pioneer Square has been sinking for decades independent of STP’s arrival.
Dixon said he’s been shown no evidence that STP’s work caused utility or other damage, in some cases several blocks from tunnel work.
The city’s Pioneer Square lawsuit, filed last week in King County Superior Court, doesn’t specify a damage amount, but the city is claiming $81 million and continues to assess the damage throughout the area, according to Kimberly Mills, spokeswoman for City Attorney Pete Holmes.
Bertha is about at the 5,400-foot mark of the 9,270-foot dig and is on track to emerge in June at South Lake Union, he said.