OLYMPIA -- Washington’s governor is “frustrated ... disappointed" and "angry” with the contractor in charge of digging a tunnel to replace Seattle’s Alaskan Way Viaduct, but said pulling the plug on the project would not be in the best interest of taxpayers.
Gov. Jay Inslee told Q13 FOX’s Brandi Kruse on Tuesday that the “day could come” when the project is no longer viable, but stopping it now “would expose the taxpayers to potentially billions of dollars in litigation costs and damages to the contractor.”
The contractor, Seattle Tunnel Partners (STP), announced yet another delay in the project last week. Tunneling has been suspended since December 2013, when the boring machine, nicknamed “Bertha,” broke down underground.
STP Project Manager Chris Dixon said Friday that the machine will not start tunneling again until November, pushing completion of the project back until March 2018 – more than two years behind schedule.
Inslee said the state will ramp up pressure to make sure STP stays on track with the new timeline. The governor accused STP of “gilding the lily” when delivering previous timelines, leading to broken promises over when the project could be delivered.
“I am confident that we are doing everything humanly possible to hold this contractor’s feet to the fire,” Inslee said, just minutes after being briefed on the project by state Transportation Secretary Lynn Peterson.
“I’m the No. 1 frustrated person in the state of Washington about this,” Inslee said. “I’m the number one disappointed. I’m the number one dedicated to forcing (STP) to comply to their obligation to the 7 million people that we have in the state of Washington. And they are not doing that to date.”
You can watch or read Brandi Kruse's full, unedited interview with Inslee below.
Brandi Kruse: “I walked into your office and saw Secretary of Transportation Lynn Peterson in your lobby. What’d you guys talk about? Mind me asking?”
Gov. Jay Inslee: “We talked briefly about this interview and your legitimate, very important questions about finishing this project that the state of Washington deserves. So we had a brief conversation.”
Brandi: “I like that you already think I have legitimate and very important questions. I’m going to try to – So, we’ll try to ask them.”
Governor: “You do. There’s no more important thing we got to get answered, which is how are we going to get this contractor to perform its duty and give the state what it deserves, which is a tunnel. People are extremely frustrated by this delay that has been occasioned by the contractor’s failure to perform. So, we have got to be insistent on them performing this contract. And I know people feel strongly about it and, believe me, I feel strongly about it. So we are going to put the pedal to the metal and get this contractor to get this job done.”
Brandi: “Let’s talk about that most recent delay – and it’s certainly not the first one. They’re looking at 2018 for that tunnel to be open to traffic and November of this year for Bertha to start drilling again. Given all the times they’ve given us a schedule – a new schedule – and then broken that promise, how confident are you in the timeline they just gave us?”
Governor: “Well they’re going to have to earn our confidence more than they have right now. They’re going to have to show performance. They’re going to have to actually start digging. They’re going to have to complete the next several hundred feet to prove that it can, in fact, dig. And they’re going to have to go through our very insistent verification system. We’re not basing our decisions on trust. We’re basing it on physical verification. So, we’re insisting on seeing the machine, seeing the plans, and we know there’s a very significant redesign and repair and essentially remodeling of the machine. This machine is going to be substantially different than the one they started with, because frankly the one they started with didn’t work, didn’t cut the mustard, and didn’t dig the dirt. So, they have gone back to the drawing board. They have redesigned it, they have reconfigured it, they have remodeled it, and they are in the process of getting that job done. But we want to make sure we see everything done before they start digging and then there will be an opportunity to get to a safe harbor to review their performance to make sure they’re actually performing.”
Brandi: “And this is all great to say, ‘We’re going to hold them to this. We’re going to complete the tunnel. We’re going to make sure the machine is up to snuff.' But why are we just saying that now? We’ve had several years of delays. So is this all the sudden Wash-DOT and the state getting tough with a contractor that they should have been tough with to begin with?”
Governor “No. No. We have been insistent from day one and we have been insistent as anyone would. Look, if you hire a contractor to remodel your house and they’re a week late you get on them. If they’re two weeks late you’re more insistent. And if they’re two years late, which they are now, you ramp up the pressure to the red line and that’s what we’re doing. We have been very insistent with this contractor that we expect them to perform. They have a legal obligation to us, under this contact. We are the customer and if they’re late, which pretty obviously they’re going to be, they actually will owe us up to $100,000 a day under our contract for their late performance. So we have been clear with them that we expect timely performance. They’re not going to timely perform. It is, I think, likely that there will be a legal obligation by them. But, in the interim, we have to be insistent and also very demanding on our verification of what they’ve done. I’ll give you example of that. When they, about 100 days ago, came up with some schedule we were very suspicious of that. We thought there was a lot of reasons to question their schedule and we refused to say that we had confidence in that. It turns out we were right, because their delay is about 100 days from the last schedule they gave us. So it turns out our perception was right. They were gilding the lily. They were overly optimistic and now we’re insisting that they perform. So, I think we’re doing about what we can do right now to get this contractor to give the taxpayers what they deserve.”
Brandi: “You know, you said that you didn’t have confidence when they came out with that schedule initially, but the State Department of Transportation still doesn’t have confidence. They stood up in front of reporters last week and said, ‘You’re not hearing confidence from Wash-DOT on this timeline.’ So how in the world am I, is any taxpayer, supposed to have confidence in this timeline if the State Department of Transportation won’t even stand behind it?”
Governor: “Well the confidence we have is in the Washington State Department of Transportation. That’s who we need to have confidence in. And I am confident that they are being very insistent to get verification of all the data from the contractor. And we still don’t have all that data by the way. So the contractor hasn’t provided us all the data we need to get to a reasonable degree of confidence to move forward and we are going to insist that we have that. Not only data sort of abstractly, but actual visual inspection of some of this machine. Now you’ve see – because we’ve been insistent that you get an opportunity to get a look at this machine – that they’re putting in over 100 tons of new steel, their (inaudible) the bearing setting. They’re reconfiguring some of the electronics on the machine. They are doing a very substantial redesign and we are not paying for this by the way, this is very important. Hitachi is paying for the repairs of this machine, that’s the company that built the machine, and the contractor is paying for the rescue pit that they had to dig to get the machine out. We are not paying for that. We don’t think we have an obligation for that, so we’re not paying for it. Who I’m confident in is DOT. That’s the party we have control over. But I think that we ought to be insistent on their performance, just as you would if somebody’s remodeling your house.”
Brandi: “At this point, even if they get it done in this latest timeline, we’re talking more than two years over schedule. So at what point does the state say, ‘You know what? They’re not going to get it done.’ The reality of it is that we need a tunnel. Not just because this is annoying that they’re late. We have a structure that is failing that thousands of citizens are driving over every single day. So at what point does the state say, ‘You know what? We’ve lost confidence in this tunnel and its ability to be completed. It’s time to go to a Plan B.' A viable Plan B and start work on that. Give me a timeline.”
Governor: “Right. You’re very correct. We’ve got to have this corridor. We have to have a corridor. We cannot not have a transportation corridor to replace this. So that’s the first thing that we’ve got to realize. If we could have just abandoned the project and walked away from it, you know fine, but we have to have a corridor through there. Right now the only option that’s available is this tunnel. No one has come forward with something that can replace it without enormous additional, in the billions of dollars of additional costs, at least in the first order to the taxpayers. Now maybe you could get a lawsuit against this contractor eventually, but there’s a legal question there. I mean, at some point that day could come. It is not here now because we believe it is in the best interest of the taxpayers to insist on Plan B, which is they got to build the tunnel. We are not going to let them off the hook. They owe us this tunnel and we’re not going to give them any excuse for this.”
Brandi: “The tunnel isn’t Plan B. The tunnel was Plan A. Like, we don’t have a Plan B. How is that possible that we don’t have a Plan B that we can move forward with, particularly given how late this tunnel is at this point?”
Governor: “Well, right now anything as an option would involve potentially massive costs to the taxpayer and I am a guardian of the taxpayer funds in this regard. So the reason that we’re not going that route is that if there was a pulling of the plug right now, it would expose the taxpayers to potentially billions of dollars in litigation costs and damages to the contractor. And I’ll tell you what, I am frustrated enough and disappointed and frankly, a little angry in this contractor, that I’m not going to give them that option. They need to perform this tunnel. They owe us a tunnel. We’re going to insist that they get that job done.”
Brandi: “As a taxpayer myself in the City of Seattle, I don’t feel like my tax money is safe when it comes to this project. We just did a 9 ½-year, 1 billion mile trip to Pluto that cost one-fourth of what this tunnel project is going to cost the state of Washington. So as these delays continue, and this tunnel contractor struggles to dig this thing, how can you ensure my tax money is protected? Because the contractor is seeking money from the state. I mean, they are seeking money associated with these delays.”
Governor: “Well first off, if anybody’s frustrated by this project, they’ve got to get in line behind me. I’m the No. 1 frustrated person in the state of Washington about this. I’m the number one disappointed. I’m the number one dedicated to forcing them to comply to their obligation to the 7 million people that we have in the state of Washington. And they are not doing that to date. So, what I think the question is, is what should we be doing right now in this situation? What we should be doing is, A) Not just trusting them with just what they tell us, but we’ve got to verify what they tell us. B) They’ve got to show us performance rather than just sort of saying they’re going to perform. C) Hold their feet to the fire on their contractual obligation to us. That is exactly what we are doing. Now to say it is all roses and sugar water from here to the finish of this tunnel, nobody can guarantee anybody that situation. We should be legitimately concerned about the performance of this, and the past record, as you would indicate, is why we are. But it is one reason why we are so diligent in reviewing their decision-making and what they’re doing about this tunnel. Now, again, I’m coming back to this and it is important. They are totally redesigning this machine. The bad news is that this machine clearly did not work on its first version 1.0.”
Brandi: “That’s an expensive failure.”
Governor: “To the contractor. To the contractor. This is an expensive failure to the contractor. It is on their nickel. It is the Hitachi company that is responsible and it is the STP company that’s responsible in my view and not the citizens of the state of Washington. We’re the customer here. They said they were going to rebuild our house. They said they were going to remodel our kitchen. They got to get the job done. The bad news is they gave us a machine that doesn’t work. The good news is they’ve very substantially redesigned this machine. That doesn’t give us a sort of feeling of warmth that this is going to be all hugs and kisses from here on in. But it does suggest that they have looked for new solutions to get this job done. If you go through this machine, and I’ve looked at it in some detail, the extent of the reconfiguration of this is very dramatic.”
Brandi: “Really quickly, and I asked you think in some form earlier, does the state have a year in mind where if the tunnel isn’t done by this year, then we pull the plug on it.”
Governor: “We haven’t done that analysis yet. I think that would depend on a lot of factors. That day could come. It is not the right decision to spend multiple billion dollars of taxpayers' money on an alternative and let this contractor off the hook. We should not let this contractor off the hook. They owe us a tunnel or they owe us a heck of a lot of money. One of the two. So letting them off the hook for some other option is not the right decision right now. So, we have not run that scenario as far as to date. Could come.”
Brandi: “Let me ask you, how confident are you personally that this tunnel will be done by March of 2018 as the contractor said it would last week?”
Governor: “I am confident that we are doing everything humanly possible to hold this contractor’s feet to the fire. And because of the lack of performance, we’re doing everything possible to be sure that they understand what they’re doing or not doing. That’s what I’m confident of and that’s what I need to be confident of.”
Brandi: “How concerned are you personally about the potential political fallout if Bertha continues to fail. How concerned do you think that your counterparts are – you know, the mayor of Seattle, the City Council members, the folks who were in the state Legislature when this sucker got approved? How scared are you that if this doesn’t work out, your political future is done?”
Governor: “Am I looking real scared here this morning?”
Brandi: “I don’t know. I can’t tell. I can’t tell.”
Governor: “((Laughs)) No. Listen, we’ve got to get a (inaudible). We’ve got to get this job done. We’ve got to make sure this contractor does what they’re supposed to do or pays us massive damages if they do not. That’s what I’m focused on. That’s my job. I’m doing it and I’m dedicated to it.”