Honorable Mayor Robinson and members of the Menlo Park City Council:

Some thoughts about tunneling costs.

Many say it will cost far too much. Some say it will cost $1 billion per mile, or more. Well, maybe. Or, perhaps not. It depends a great deal on how you run the numbers.

Let's say the distance and length of this tunnel is from 5th Ave. in RC to San Antonio Rd. in south PA, about 7 miles. If that's not correct to the inch, I'm confident that there will be bloggers out there who will rush to correct this egregious error.

The per mile construction costs vary with each and every project. The costs depend upon variables like tunnel length, soil composition, depth, required technologies (boring machine or not) and a whole host of other variables unique to this particular site. A contractor of large projects once confided to me that he could build a project at three different price points, and the client wouldn't be able to tell the difference. So, specifying dollar numbers at this point is an open-ended exercise.

The actual (bottom-line) tunnel costs must then be calculated with a number of deductions. What is the least expensive way that CHSRA has in mind for the track alignment, say either at grade or bermed? Call that the base cost. What is the cost for that, and presumably that includes all the grade separations, and the temporary shoofly tracks and their use by Caltrain? Then there are also eminent domain costs and a percentage of construction easement costs. With full-cost accounting, these costs, not line items with tunneling, need to be deducted from the tunneling costs.

There are other, less apparent costs that are not part of the CHSRA equation. These are the costs to the cities. Atherton, Menlo Park and Palo Alto will be severely impacted by this construction, both during the five or more years of its duration, and the dramatic changes that will become permanent in the expanded and revised rail corridor.

There will be property devaluation costs and property tax revenue losses; there will be business decline and even termination costs as well as business tax revenue losses in the downtown areas; there will be public utility and public service costs, including city administrative costs. Who eats those? And, can we sue for recovery? We would be fools not to try. Thus, add legal costs to that list.

In short, these are all deductible from the original tunnel bids. While there may be no break-even point, there would certainly be a consequential reduction of the cost "delta" between the alignment such as berm, and that of tunnel. And, if time is money, time delays in the settlement of various litigations would also need to be factored in as costs that are tunnel cost offsets.

Some have suggested revenue generation as a consequence of tunneling. That sounds plausible but would have to be spelled out further to be taken into consideration. This would be another cost off-set. I'm for it, but I don't understand it.

Without sounding too dramatic, the tunnel we want may become a bargain.

Martin

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Martin Engel
1621 Stone Pine Lane
Menlo Park, CA 94025
650:323-1670
martinengel_at_earthlink.net


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