The estimated cost to bore twin tunnels under the Allegheny River, extend the Light Rail Transit system to the North Shore and build three stations is now $435 million -- a 10 percent increase in little more than a year.

	A view of the type of tunnel-boring machinery that would be used to cut the passage beneath the Allegheny River. Click photo for detailed graphic of the tunnel and its path beneath the riverbed.

Nevertheless, Port Authority officials continue to express guarded optimism that the budget-busting North Shore Connector remains on track for a probable September groundbreaking.

The $42 million increase in costs became public yesterday when the Southwestern Pennsylvania Commission, planning agency for the 10-county region, released a proposed amendment to its long-range transportation improvement program. The SPC must approve the Port Authority's request to keep the agency eligible for an 80 percent share of higher federal funding.

"Everyone likes the project but everyone is concerned about the number [cost]," Port Authority Chief Executive Officer Steve Bland said. The authority's nine-member board of directors must decide within three weeks whether to accept a $156.5 million low bid covering initial construction.

A 120-day limit to award the contract expired May 31, but the joint venture of West Mifflin-based Trumbull Corp. and Japan-based Obayashi Corp., the tunnel boring expert, granted a 30-day extension to June 30 and another to July 15.

Although the $156.5 million is $21.5 million over engineering estimates, Mr. Bland said because the offer remains on the table, it mitigates the authority's risk about rising costs on the rest of the project.

"A significant amount of the total project is wrapped up in that contract," he said, including most of the civil construction work.

The contract includes boring tunnels under the rivers and lining them with concrete, 1,200 feet of "cut-and-cover" to transition the tracks to ground level west of PNC Park, excavating Stanwix Street to extend the line north of Gateway Center station and building new station shells Downtown and next to PNC Park.

Last year, bids for just boring the tunnels were rejected when the low bid came in more than 25 percent above budget.

The Port Authority has identified these sources and means of raising the extra $42 million: Federal Transit Administration, $18 million; Port Authority, $15.6 million from future capital funds; the state, $7 million; and Allegheny County, $1.4 million.

The SPC has opened a 30-day public comment period that ends July 27 on the agency's proposed amendment for extra North Shore Connector funding. The matter is to come before the SPC board for a vote July 31.

Information gleaned from the proposed amendment to the SPC program showed $48.4 million has already been spent or authorized for various stages of planning, environmental clearance and engineering since 1999.

The final cost breakdown for the $435 million total project showed $348 million from the federal government, $72.5 million from the state and $14.5 million from the county, paid in installments through 2011, when the 1.2-mile line would be completed and open.

The North Shore Connector is said to be the last federally supported transit project to receive 80 percent federal funding. Most new projects are receiving 50 percent federal aid, with the balance financed at the state and local levels.

Moving ahead will require some special maneuvering.

The July 15 deadline to award the contract not only comes before the SPC's July 31 meeting to act on the authority's amendment for extra funding but also before the Federal Transit Administration approves a "full-funding agreement" that formalizes a contractual commitment to the authority.

At present, Mr. Bland explained, the FTA agreement is being reviewed by the office of U.S. Transportation Secretary Norman Mineta and the Office of Management and Budget. Then it goes to Congress for a mandatory 60-day review, usually a formality.

Consequently, the FTA has issued a "letter of no prejudice" to the Port Authority, meaning it can award the tunnel contract and incur construction costs until the federal grant is finalized. At that time, the FTA will reimburse the authority.

"It means we can proceed at our own risk and recover our costs," Mr. Bland said. "We're tracking [government] progress daily and right now, yes, I'm optimistic. No red flags have been raised and no new questions have been asked about issues that have come up" in federal assessments of the project.

If the authority misses the July 15 deadline to award a contract, it will have to bid the project a third time, an unlikely scenario because costs continue to go up, or abandon the project, the more likely scenario because of lukewarm community support and an inability to raise more funding.

But if the Port Authority drops the project, it could be liable for paying back the federal share of money -- at least $30 million so far.

Dramatic cost increases in civil construction have been blamed on high energy costs and growing international demand for key ingredients like cement and steel, especially in China.

Authority spokesman Bob Grove said high public works construction bids are "a sign of the times."

The Grant Street Transportation Center, providing a new parking garage and Greyhound Lines bus station is costing $42 million, or $7 million more than estimates. Similar increases are impacting the 31st Street Bridge reconstruction and conversion of the Hot Metal Bridge to a walking-biking bridge.

It was September 2004 when the Port Authority, SPC and Pittsburgh Downtown Partnership held an informational meeting for what was then estimated to be a $363 million "Big Dig." Since then, the price has soared and the purchase of eight new trolleys and a 1,600-foot rail spur to the David L. Lawrence Convention Center have been dropped to cut costs.

Support for the North Shore Connector has been limited from the start; the cost, tunnels and alignment have become increasingly controversial over time.

Project supporters argue the project will link Downtown to mushrooming development on the North Shore that started with PNC Park and Heinz Field but now includes a hotel, two office buildings, two parking garages and plans for other development.

The authority's proposed amendment for more funding can be found at the SPC's Web site at www.spcregion.org. Information about the project can be found at at the Port Authority's Web site at www.ridegold.com.