Cost Estimate on Metro Rail Jumps Again

The official projected cost of the first segment of the Los Angeles Metro Rail subway has jumped again, by about $40 million, and could go higher, according to a new report by the Southern California Rapid Transit District.

The first 4.4-mile section of the subway is now expected to cost $1.25 billion, up from the last previous estimate of $1.21 billion, made in April. In June of 1984, the original estimate of the first phase--which had been scaled back sharply in the face of difficulties in obtaining federal funds--was set at $1.174 billion.

The new figures are based on the assumption that RTD will receive enough federal funding in the next few months to begin construction early next year. But the Reagan Administration is strongly opposed to the project, which it says the federal government cannot afford. And in Congress, where there is bipartisan support for the project, the House and Senate have been unable to agree on how much funding should be committed to the project at a time when an overriding political concern is how to reduce the federal deficit.

RTD General Manager John Dyer said Thursday that the new figures reflect inflation and the added costs of delays in building the project. He attributed the increase last April to the inclusion of planning and engineering costs that were not part of the initial estimate.

Funds Held Up

Construction, originally planned to begin in January, 1984, has been held up largely because the Reagan Administration has refused to release construction funds approved by Congress.

Dyer said the increased costs will be made up locally, with about half expected to come from the Los Angeles County Transportation Commission and the rest from the RTD and the City of Los Angeles.

While not part of the current cost estimate, if insurance premiums continue to soar, the price tag could go higher by another $39 million by the time the first segment of the subway system is completed in late 1991, according to the RTD report.

Major mass-transit projects in other cities often have cost significantly more than projected, and critics of the Los Angeles subway--estimated to cost more than $3 billion when extended to the San Fernando Valley--predict that the same will happen here.

Agreement Signed

Meanwhile, RTD officials signed an agreement by which private funds will help finance a major Metro Rail station proposed for 7th and Flower streets, beneath the heart of the downtown financial district. The agreement with Home Savings & Loan Assn., which has a branch office on that corner, will save RTD $11 million to $15 million in property purchase and development costs, officials said--savings that have not yet been deducted from estimated cost increases.

Earlier, the transit agency began condemnation proceedings on the Home Savings property, where it plans to build a station entrance and electrical power station. Officials of the company, who wanted to build a new branch and corporate headquarters building on the site, fought to hold onto the prime street-corner property and won support of key business and political leaders.

Under terms of the settlement, Home Savings will give RTD free easement rights for the station entrance and part of the below-ground station area. As part of its development of a proposed $60-million, 26-story office building, Home Savings will construct at no cost to RTD the portion of the station on its property.