As the Santa Clara Valley Transportation Authority tries to cobble together $1.2 billion in cost savings for the final leg of the San Jose BART extension, transit officials are recommending they ditch the tunnel contractor that’s been on the payroll for the last three years.
Tom Maguire, the agency’s chief megaprojects delivery officer, said in an interview that it’s a decision driven by “holding our contractors accountable and keeping the project on track financially.”
The VTA Board of Directors signed off on the contract with Kiewit Shea Traylor (KST) — a joint venture of three separate construction firms — in May 2022. The scope of work includes the single bore tunnel, entrances and exits, the excavation of underground stations and the procurement of a tunnel boring machine.
It’s the largest contract for the six-mile, four-station segment that will extend BART from the Berryessa Transit Center in North San Jose, through downtown and to Santa Clara. But since last summer, VTA officials and KST have been unable to come to an agreement on a price for the second phase of work — the first stage was for design and preconstruction work, while the second part is for the actual construction of the project.
The six-mile BART extension has been plagued with delays and cost overruns for years now. The original cost estimate was in the $4 billion range with an opening date in 2026.
In March 2024, federal transit officials tacked on additional time and dollars from a previous estimate, bringing the open date to 2037 and the cost to $12.75 billion. The feds had also deemed the contract with KST as one of the top risks of the project.
“VTA remains unwavering in its commitment to complete this extension of the BART service to Silicon Valley and produce these last six miles in a way that is financially responsible, technically sound and fully accountable to the public,” Carolyn Gonot, VTA’s general manager, said in an interview. “Every decision we make is rooted in our responsibility to deliver a project that transforms our region with transparency, efficiency and lasting benefits.”
VTA’s oversight committee for the BART project will review the recommendation to terminate the contract with KST at its June 12 meeting before a decision is made by the full Board of Directors on June 27. KST could not immediately be reached for comment.
San Jose Mayor Matt Mahan, who serves as the vice president of the board, said in a statement the he supports “VTA’s effort to find efficiencies and control costs to move this once in a generation project forward. We don’t have a blank check for this project, and it’s important that everyone — from the agency to its contractors — is held accountable for staying within budget.”
VTA is currently in the process of identifying anywhere from $700 million to $1.2 billion in cost savings after the Federal Transit Administration announced in August 2024 that it would cover 40% of the cost of the megaproject — less than what the agency was hoping for.
Maguire, the chief megaprojects delivery officer, said that VTA has already had conversations with 10 major tunneling contractors, leading them to believe they can get a price that’s more in line with the agency’s strained project budget. He was unable to give any official estimate as to how much money they were expecting to save other than that it’s a part of the agency’s broader cost savings effort.
Maguire said that switching contractors will add at least 18 months onto the timeline for when tunneling work can begin — likely 2027 — but they don’t expect any additional project delays.
“We remain fully committed to finding ways to cut cost and reduce overall program schedule to ensure that we stay within our overall funding and budget,” Maguire said of any potential delays that switching contractors could cause. He added that their cost savings effort could result in design changes that accelerate the project schedule.
KST is expected to continue its preconstruction work, which includes building of the massive tunnel boring machine. In 2023, VTA purchased the machine, which has been likened to a mechanical earthworm, for $76 million. It’s being custom made in Germany and will be tested there before it’s disassembled and shipped in parts to Santa Clara County.
VTA has previously estimated that it will take three to four years to dig the five-mile-long, nearly 54-foot in diameter tunnel. But as part of the cost savings review, the agency is looking at designing a tunnel with a smaller diameter. Maguire said that the decision to end the contract with KST is independent of any discussion on the redesign of the tunnel. If they do change the tunnel size, he doesn’t expect the tunnel boring machine will go to waste.
“There’s a wide range of options that we’re exploring right now,” he said.
