Funding crisis cripples Detroit tunnel projects Apr 2009
Paula Wallis, Reporter
- Funding has evaporated for four major TBM water tunnel projects in Detroit and Las Vegas, leaving owners scrambling to keep other projects alive as they weather the financial storm. Both metropolitan areas have been hit especially hard by the economic melt down. A sharp drop in water demand and the recent crisis in the bond market has raised significantly the cost of servicing bonds used to finance capital improvements and leaves many programmed projects in limbo.
- Detroit is suffering particularly hard with two major tunnelling projects undermined.The massive Upper Rouge Tunnel (URT) combined sewer overflow (CSO) control project is at a standstill, just as the major tunneling elements were moving into construction, and the contract to complete the redesigned Detroit River Outfall DRO-2 project has been terminated.
- After advertising the second large contract for the URT project and extending the bid date twice, the Detroit Water and Sewage Department (DWSD) pulled the North Tunnel job abruptly, notifying document holders that it would not accept bids at this time.
The two URT project contracts
- The project's South Tunnel contract, awarded in September 2008 to the Kenny Construction/Obayashi Corp JV, is also on hold awaiting clarification of funding sources before placing major purchase orders with suppliers, including for the contract's TBM and its precast concrete lining.
- The costs of capital improvement projects, many of which are federally mandated, typically have no associated federal grant or loan dollars, so the costs are borne by the communities served. But demand has taken a nosedive as foreclosures and bankruptcies shutter homes and businesses, and existing customers cut back to save money. Construction is almost at a standstill causing a precipitous drop in new connection fees, and the global credit crunch is affecting the city's ability to sell bonds.
- Detroit's jobless hit a 26-year high at 22.2% in January and Michigan State ranked sixth in the US for foreclosures with 12,564 filings in February, according to RealtyTrac Inc, a California-based foreclosure website.
- 'The Department has also been impacted by the recent conversion of its variable rate revenue bonds to fixed rate,' said Ellenwood. 'That alone cost us a $25 million dollar shortfall.'
- Ellenwood said the city is looking at various options to keep the estimated $1.5 billion URT project afloat, including rate increases, a infusion of cash from the Obama Administration's stimulus package and an easing of the court ordered deadline.
- 'The Department is seeking approval from the Michigan Department of Environmental Quality to extend delivery of the mandated project from its slated completion in 2015,' said Ellenwood.
- The project is designed to reduce the frequency of 17 CSOs on the Northwest Interceptor (NWI) and tributary sewers to the Middle Branch of the Rouge River from approximately 50 events a year to less than one a year. According to the design specifications, the CSO volume should reduce from an average of 1.3 billion gallons to 250 million gallons annually.
Alignment of the 11.26km long x 7m diameter Upper Rouge River CSO control tunnel
- Like cash-strapped departments everywhere the DWSD is hoping for some relief from the Obama Administration's stimulus package. Under the American Recovery and Reinvestment Act (ARRA) of 2009, Michigan will receive approximately $168 million for wastewater projects. How much, if any, the project can qualify for is unclear according to officials.
- The least popular option for saving the project is rate increases. Last month the board that governs the department approved increases to offset revenue shortfalls but average increases of about 8% for the system's 4 million customers in 126 communities would jump to 4.8% for water and 15.8% for sewage in Detroit.
- 'The rates, especially sewer rates, are significantly higher in Detroit because the city is responsible for 83% of the cost of the CSO project with the suburbs responsible for the remaining 17%,' said Ellenwood. The city council must approve any rate increases before they can be applied.
- The project, designed by Jacobs Engineering and Arcadis, which also hold the construction management contract, consists of a 11.26km-long x 9.14m diameter (7mile x 30ft) tunnel, with a dewatering station to pump flows to the DWSD treatment plant; 14 drop shafts to connect existing CSOs to the new tunnel; diversion structures; surge control facilities; and improvements to several outfall sewers. The tunnel will run about 49m (160ft) below surface with a gradient of 1%.
Deep level CSO interceptor
- The tunnel passes through three geologic formations: Antrim Shale, Travers Group, and Dundee Limestone. Presence of toxic and explosive gases including hydrogen sulfide and methane gases and artesian groundwater conditions can be expected during tunneling-conditions that defeated the District's deep level Detroit River Outfall 2 TBM tunnel project five years ago.
- Each tunnel package has its own distinct geological features. The South Tunnel is fully in the Limy Shale. The North Tunnel will encounter about 1,220m (4,000ft) of Travers Formation at the beginning of the drive and then pass fully into Antrim Shale for its northern reach. Extensive geotechnical investigations have included 218 vertical borings, 13 inclined borings and 3500ft of horizontal borings at tunnel elevation.
- Two lining alternatives are presented in the bid documents. The first is a two-pass lining with a primary precast concrete expanded segmental initial support and a cast-in-place concrete final lining. The alternative is a one-pass bolted and gasketed precast concrete segmental initial support and final lining.
- The project is broken into two major tunneling contracts and six smaller contracts. Kenny Construction/Obayashi JV, submitted a low bid of $316,170,200 in April 2008, for the South Tunnel from PS/DS-1 to DS-7 (Fig 4). A second bid of $352,416,600 came from the Traylor Brothers/Jay Dee JV.
- In September 2008 MDEQ (Michigan Department of Environmental Quality) awarded a loan of $161 million to the City of Detroit for the South Tunnel with the remainder to be financed through bonds. This paved the way for award of the contract to Kenny Construction/Obayashi JV. The JV however, is on standby at the moment and the second tunneling contract is on hold waiting for the DWSD to get its financial house in order. No one can say when that will be.
|South Tunnel Contract||North Tunnel Contract|
|Pump station and drop shaft DS-1 just north of the intersection of Warren and Outer Drive in the City of Detroit's Rouge River Park. The shaft will be 61m deep x 24m diameter (200ft x 80ft) and will serve also as the TBM launch and working shaft.||The DS-7 shaft located in Eliza Howell Park. A 15m (50ft) diameter x 54m (177ft) deep shaft that will serve as the working access and launch point of a second TBM operation.|
|Some 5,700 linear meters (18,600ft) of tunnel with a finished diameter of 9.14m (30ft), running about 49m (160ft) below grade from DS-1 to the DS-7 shaft in Eliza Howell Park, north of the Schoolcraft and Virgil Avenue intersection.||About 5,608m (18,400ft) of tunnel with a finished diameter of 9.14m (30ft) running approximately 49m (160ft) below grade from the DS-7 launch shaft to DS-11 located west of the|
|Six adits and de-aeration chambers to connect the South Tunnel to drop shafts that will be constructed under separate contracts (Fig 4).||Five adits and de-aeration chambers to link drop shaft, built under separate contract, to the main CSO tunnel (Fig 4).|
Detroit's second DRO-2 contract terminated - TunnelTalk, Apr 2009
Funding woes affect water projects in Las Vegas - TunnelTalk, Apr 2009
Detroit's first DRO-2 contract mobilization - TunnelTalk, Nov 2001