The Port Authority will apparently have to dig for more money before it digs twin tunnels under the Allegheny River.

An Illinois-based construction company submitted a low bid of $87.8 million yesterday to bore the tunnels that would enable the agency to expand the light-rail system 1.2 miles from the existing Gateway Center Station to North Shore attractions and new development.

The bid by Kenny Construction Co., of Wheeling, Ill., an experienced subway and tunnel builder, was 25 percent above the authority's latest engineering estimate of $70.7 million, albeit much lower than the highest of three bids -- $119.8 million.

The tunnels represent the keystone of the overall $393 million project that includes building four stations and purchasing four light-rail vehicles. A 0.3-mile subway spur also is to be built to the David L. Lawrence Convention Center and a new parking garage on the long-time Greyhound bus terminal site.

"Crossing your fingers just doesn't work," said a disappointed Henry Nutbrown, the authority's assistant manager for engineering and construction. "We'll have to see where we go from here."

He said the authority staff, and consultants who have already been paid more than $35 million for years of preliminary studies and final design work, would review the bids for accuracy, and engineering and legal compliance.

He said they also will investigate the big difference between the low bid and the engineering estimate, and the big difference between the low and higher bids.

Nutbrown refused to say whether the unexpected high bid for the first contract jeopardizes the project or represents what may happen with 20 additional contracts yet to be bid to build what is called the "North Shore Connector."

The Federal Transit Administration was waiting for the results of yesterday's bids before finalizing a funding agreement guaranteeing $217.7 million in "new starts" money and about $97 million in other federal funds, totaling 80 percent of the project. The state is to provide $65 million, and the county, $13 million.

The Port Authority's board of directors has 60 days to accept or reject the bid and, presumably, to identify more funds. An option is to rebid the tunnel contract if engineers think it will bring any savings.

Nutbrown suspected recent price spikes in steel, cement and especially fuel had much to do with the bids.

"That [fuel] is affecting just about everything," he said. "Trucks that carry product to the project and excavated soil away [from the project] burn lots of diesel."

Additionally, since the authority made an earlier estimate of between $55 million and $60 million, excavation that was to be part of another contract was incorporated into the one for the twin tunnels.

The North Shore Connector project is one of five that has reached "recommended" status nationally for federal funding. Nutbrown said that it would be a shame to lose $300 million that comes from outside the state.

"It's important to the region that we push forward," he said. "We'll work with the [Federal Transit Administration] and state as we have since the beginning of the project. Two large parking garages under way were contingent upon this [the T expansion]."

The North Shore Connector would be built largely underground and under the river, connecting the Golden Triangle and fast-developing North Shore via the twin tunnels. A new and reconfigured Gateway Center Station would tie into the existing 25-mile light-rail system to Station Square and points south.

Planning started in fall of 1997, when a former board of county commissioners directed the Port Authority to drop plans for its priority at the time, an expansion between Downtown and Oakland, and to concentrate instead on the North Shore.

A joint venture of West Mifflin-based Trumbull Corp. and San Francisco-based Obayashi USA submitted the $119.8 million high bid for the twin tunnels; a "launching pit" next to PNC Park, where digging under the river would start; and a "receiving pit" under Stanwix Street, where digging would end.

Traylor-Shea, another joint venture, bid $112.9 million.