The Regional Transportation District has taken an innovative approach to deal with steep cost increases in materials needed for its $4.7 billion FasTracks project. Instead of the conventional response to such inflation – stretching out the project – RTD wants to speed up construction before costs rise even further.
So far, the proposed changes in the project seem well-designed to not only control costs but to bring faster relief to area traffic congestion.
In addition, RTD is redesigning parts of the project to trim costs.
Over the past three years the cost of reinforcing bar has jumped 42 percent, concrete ties have risen by 45 percent and copper – vital for supplying power to light-rail lines – has soared 160 percent. Meanwhile, the price of diesel fuel has jumped 220 percent, and gasoline has risen by 156 percent over the same period. Rising fuel prices increase the cost of operating RTD’s construction equipment. More important, high fuel costs divert more of the revenue stream from RTD’s 1 percent sales tax to operating its bus fleet and away from construction of the 119 miles of new rapid transit lines that metro-area voters authorized in 2004.
The news on the cost front isn’t all bad, however. Current rates on the 30-year bonds that finance the project are running a full point or more below the numbers projected in the original FasTracks plan. The combination of rising commodity prices plus lower-than-anticipated interest rates makes it possible to reduce costs by accelerating the pace of the project – laying the necessary track and building other facilities before prices rise still further. As a bonus, rail service along congested corridors like Denver to Golden can open sooner.
That West corridor line is the most cost-effective of all the FasTracks projects, according to federal projections. Only the Southeast line, built separately as part of the T-REX project and scheduled to open in November, is expected to carry more riders. The West line, originally expected to be finished in 2014, is now targeted for 2012, with service to begin in 2013. During the intervening year, the West line will be used to test new cars and other equipment. We’d rather see it go into full passenger service immediately upon completion, if the revenue picture in 2012 permits such operations.
Other cost-saving steps include moving track to the south side of U.S. 6 just west of Simms Street and shortening the length of some overpasses designed to carry light-rail cars over highways. RTD is also weighing the acceleration of some other lines, including the reconstruction of Union Station rail links by mid-2012, also a year earlier than planned.
No one likes to see rising costs, but parrying inflation by bringing vital new transportation assets on line more quickly than expected is a responsible and creative response to problems beyond RTD’s control.
