[M II A II R II K]

True cost of Big Dig exceeds $24 billion with interest, officials determine


07/10/2012

By Eric Moskowitz

Read More: http://www.boston.com/metrodesk/2012...n1K/story.html

As construction wound down on the Big Dig nearly a decade ago, officials disclosed that the cost of the highway megaproject had escalated to nearly $15 billion. Now, for the first time publicly, state administrators have tallied the full cost of the work -- principal and interest, plus legally obligated transit commitments -- and it is some $10 billion higher.

The highway-tunnel work cost $14.5 billion, with the state using $7 billion in federal aid and borrowing the rest. Add interest and the total figure shouldered by state and federal taxes and tolls will be $21 billion by the time the final bond is paid off in 2038, Dana Levenson, chief financial officer for the Massachusetts Department of Transportation, told a legislative committee Tuesday. The numbers largely confirm the accounting of a 2008 Globe review of hundreds of pages of state documents.

But even that figure does not quite cover it. The state two decades ago agreed to a list of public transit improvements to offset the air pollution and other impacts of the additional traffic the Big Dig would generate and to comply with federal environmental law. Transit work completed so far -- including adding the waterfront Silver Line, modernizing the Blue Line, and extending the commuter rail to Worcester, Middleborough, Plymouth, and Newburyport -- resulted in $1.7 billion in construction costs and $1.6 billion more in interest. And the state has not yet started to pay for one of the most expensive commitments, the $1 billion-plus planned Green Line extension to Somerville and Medford.

The House Committee on Post Audit and Oversight called the hearing to better understand the total cost and its continued effect, limiting the state’s ability to pay for other transportation infrastructure projects and even day-to-day highway and transit operation by gobbling up so much money for debt. The state still owes $9.3 billion in principal and interest on the Big Dig and the completed transit commitments, Levenson said. The numbers required some wrangling. Unlike a homeowner’s mortgage, the project’s borrowing costs sprawl across an array of original and refinanced bonds issued by the former Massachusetts Turnpike Authority, the MBTA, and the Commonwealth itself. And though state officials once believed that the federal government would cover 80 percent or more of the construction, that support was capped as the project cost spiraled.

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