Cost increases at State Pier project blamed on delays
New London — The estimated cost to complete the
reconstruction of State Pier will rise by a minimum of $6.8 million, and more
likely end up being double that amount, the Connecticut Port Authority learned
on Tuesday.
Most of the increase is being blamed on the delay to the
start of the project and the need for expediency in finishing the pier in
time to accommodate needs of joint venture partners Ørsted and Eversource. The
partners will use the pier for the assembly and staging of offshore wind
components needed for the construction of South Fork Wind, the first of three
offshore wind projects State Pier is expected to serve. The land-based portion
of construction of the 12-turbine South Fork began earlier this year
and is expected to be completed by the end of 2023.
The new costs estimates, which are not yet finalized, were
announced during a meeting of the Connecticut Port Authority on Tuesday. It was
the same day as a rare tour of the construction site of what had been a $235.5
million project to redesign and reconstruct State Pier to meet the needs of the
offshore wind industry.
Gov. Ned Lamont joined members of the news media on the
tour, led by construction manager Kiewit, which is still in negotiations with
the port authority on a final price for construction.
Lamont, already aware of the increased cost estimate though
it had not yet been made public, reiterated his commitment to the project in
the face of a request for more state funding.
“Look, this is an enormous project,” he said against the hum
of machinery in the background at State Pier.
“Sometimes there’s some unforeseen things. Time is money and
there were some delays that cost us. But you have to keep the perspective,”
Lamont said. “This is transformative for our state and our region. I think it’s
one of the most important investments this state has made in many a year. We’re
not doing it ourselves. It’s a public–private partnership with tens of millions
coming in from our partner.”
Ørsted and Eversource are contributing more than $70 million
toward the project, with the state picking up the remainder along with any
additional costs.
Lamont also alluded to the fact that though the newly
reconstructed pier initially will be used by the offshore wind industry, it’s a
facility that will continue to be owned and controlled by the state and an
economic driver.
Connecticut Port Authority Board Chairman David Kooris has
hinted over the past few months about potential costs increases associated with
delays in permitting the project and challenges and appeals that followed.
At Tuesday’s board meeting, Kooris said a $6.8 million
increase was directly associated with “the additional cost of labor associated
with (Kiewit) being on site for longer than anticipated to complete the
project.”
The increased cost will be the subject of a vote at an
upcoming board meeting once a commitment of funding from the state is secured.
Additionally, Kooris said he anticipated an additional jump
in costs to accelerate the speed of the project to meet the schedule with
Ørsted and Eversource and avoid any penalties. He said the current schedule,
because of delays, would bring a project completion date into April 2023.
Kooris said a new target date would be March 1.
Kooris said he did not yet have an estimated cost to
accelerate the project and bring in more workers or more shifts. "We want
to shorten the construction schedule even with the delay because we want it
ready for the first offshore wind project," he said. "Having the crew
on site longer will be $6.8 million. I don't have the exact cost associated
with acceleration, but expect it to be somewhere in that order of
magnitude."
Kooris concluded that an additional $12 million to $15
million is at play, though that number will be "finalized over the coming
month."
The previous $235 million cost estimate had included $193
million for construction, $11 million for contingency and $31 million for soft
costs such as construction administrator fees, design and environmental
mitigation. So far, with the project more than halfway completed, Kooris said
the port authority has spent just under $2 million of $11 million in
contingency funds.
The project started in 2019 with a cost estimate of $93
million.
Kooris said that figure was derived shortly after the
partnership was formed with Ørsted and Eversource and only reflected “committed
funding at that time.”
“It was not the all-in price tag anticipated for the
project,” he said.
The price later rose to $157 million when designers shifted
the heavy-lift areas used in the installation and delivery berths from one side
of the pier to another in part to accommodate concerns about ferry traffic near
Cross Sound Ferry operations. It was about one year ago that the number jumped
to $235 million, the result of a completed design for the project and
“estimates meeting reality,” Kooris said.
Kooris acknowledged critics of the process who say the
authority shouldn't have started the work in early phases without full permits
and that the costs of the delay could have been avoided if the authority had
waited. He called the authority's decision a "strategic risk" and
argued that it paid off.
"By purchasing the steel and executing contracts
pre-inflation, we are confident that we saved well more than the $6.8 million
associated with delay," Kooris said. "The steel alone, if we had
waited to purchase it until after obtaining permits, was going to be $6 million
higher than we got for it. While there is cost associated with delay, we think
in the grand scheme of the project that it is still net favorable."
Kooris said the authority is working on a strategy to secure
additional resources from the Lamont administration.
"We expect to be done in exactly a year," he said.
"When we're done in a year's time, the turbines will come right
away."
Ørsted and Eversource issued a statement Tuesday: “We
believe in the strategic and economic importance of transforming State Pier
into a state-of-the-art, heavy-lift terminal that supports a broad range of
future port activities, including offshore wind,” it reads. “The current
redevelopment activities have already created significant jobs, including for
Connecticut’s building trades, and spurred local investment in New London. Once
completed, the facility and the Port of New London will play a critical role in
supporting the transition to a clean energy future as we utilize the facility
for our offshore wind projects starting next year.”
State Sen. Paul Formica, R-East Lyme, said he was
disappointed in the news of another cost increase for the project but was most
concerned about the level of financial oversight by the state in the wake of
the exit of Konstantinos "Kosta" Diamantis, the former deputy
secretary of the Office of Policy and Management assigned to oversee the State
Pier project on behalf of the state. The FBI has issued a subpoena to the state
for documents related to Diamantis' handling of school construction projects
and State Pier reconstruction.
With OPM already stretched thin, Formica said he thinks the
state needs to ensure there are people with the right expertise devoted to
oversight of the project.
With Diamantis gone, Lamont named Noel Petra, deputy
secretary of the state Department of Administrative Services, to continue work
on the State Pier project on behalf of the state. Petra, for the time being,
also is taking over the role of oversight on the state’s school construction
projects.
Kooris reiterated on Tuesday that the Connecticut Port
Authority had not been issued a subpoena or contacted by the FBI about
Diamantis.
Amid cost increase, construction scandal, Lamont tours State Pier redevelopment
NEW LONDON — Gov. Ned Lamont stood behind a canopy of cranes
moving acres of crushed rock into the Thames River on Tuesday and renewed his
commitment to transforming the state’s aging pier on the river into a
launching-pad for offshore wind projects, despite the project’s ever-growing
price tag.
The governor’s tour of the construction site at the State
Pier in New London — where he was tailed by a gaggle of press and cameras —
preceded the announcement Tuesday afternoon that additional costs associated
with permitting delays would bring the project’s total cost to more than $242
million, and likely to rise even higher.
In addition to its inflated budget, critics have honed in on
the project's ties to former state budget official Konstantinos Diamantis, who
is the subject
of a federal investigation into his work involving public construction
projects.
Rather than shy away from the project, however, Lamont championed the
work Tuesday as part of an overall “reimagining” of the city of New London and
the port’s decline since its days as a whaling epicenter.
“This is going to be one of the most major ports in the
country, just like New London was 100 years ago,” Lamont said.
“It’s about wind, it’s about the environment, it's about a
new economy going forward, it’s about hundreds of amazing jobs,” the governor
continued. “This is going to be a major facility for decades and decades to
come.”
Once completed, the redeveloped State Pier site will feature
a heavy-lift platform capable of offloading turbine parts from Europe, as well
as areas to begin assembly of the turbines before loading them on to a 472-foot
long “jack-up”
vessel that be used to construct wind farms off the coast of New York
and Rhode Island.
Part of that process observed by Lamont and other officials
Tuesday included machines removing earth from a portion of the site formerly
known as “the hill,” and grinding the dirt and rocks to create some of 7.4
acres of fill being placed into the river between the two existing piers on the
site.
Nearby, workers were driving steel pilings as long as 100
feet into the riverbank to support the massive delivery berth needed to offload
cargo weighing dozens of tons.
David Kooris, the chairman of the Board of Directors for the
Connecticut Port Authority, which owns the pier, told reporters Tuesday that
the project was on track to be “substantially completed,” by spring 2023, after several
months of delays obtaining the final permit from the U.S. Army Corps
of Engineers.
Close to 200 workers were employed at the site Tuesday,
Kooris said, a number that is expected to double during the construction phase.
About 100 people will be employed at the completed site assembling wind
turbines, he said.
“For decades we have known that we have had to upgrade this
antiquated facility from the two finger piers to a larger port and to bring the
heavy lift capacity and the upland storage to compete with other facilities and
attract a broad range of cargo,” Kooris said.
The governor’s visit to the state pier, meanwhile, also
elicited questions about Diamantis’ involvement in the project as well as calls
for the lawmakers to increase their scrutiny of the Port Authority.
“As much as [Lamont] wants to continue touting the benefits
of the Sate Pier, I think the public is losing faith,” said House Minority
Leader Vincent Candelora, R- North Branford.
Kooris told reporters that Diamantis was involved in the
selection of the project’s construction manager, Kiewit Corporation, as well as
some of the early “day to day” oversight of construction work. He added that
the Port Authority has not received any requests from federal investigators for
documents related to Diamantis’ work on the pier project.
“As far as we know, we have nothing to do with the
investigation,” Kooris said.
Within minutes of completing the governor’s tour, Kooris was
on a conference call Tuesday with the other directors announcing the latest
cost overruns of about $6.8 million, pushing the total costs to over 50 percent
above the agreed-upon
price of $157 million reached two years ago as part of a
public-private partnership.
About a third of the project’s overall costs — $75 million —
will be paid for by a joint venture between Eversource and the Danish energy
company Ørsted as part of their 10-year lease of the completed pier as a
staging ground for offshore wind projects.
The cost overruns, however, will be the state’s
responsibility to bear, according to a spokesman for the Port Authority.
Critics of the project argue that the ballooning size of the
project even predates the initial contract between the state and Eversource/Ørsted,
noting that initial
estimates pegged the cost of the project at $93 million.
“At what point is enough enough, and at what point are
people going to step in and say ‘We need to get our arms around this?’”
Candelora said.
Kooris conceded on Tuesday that the Port Authority “could
have done a better job” of explaining its preliminary cost estimates to the
public and lawmakers, while also anticipating some of the work that was later
factored into the budget.
Other challenges, such as “pretty significant modifications”
to the project’s design to avoid interfering with ferry boats departing from
New London Harbor, contributed to the inflated costs, he said.
Kooris declined to estimate the final costs of the project
while speaking to reporters on Tuesday, and in the subsequent call with the
Board of Directors said that Port Authority would attempt to negotiate
“acceleration” of the project’s completion date with the contractor.
Kooris told the board that the cost of expediting the
project would likely be in the same range as the $6.8 million in additional
costs announced on Tuesday. The full cost of that additional work will be
better known by mid-April, he said.
In the meantime, the Port Authority will begin the search
for a new executive director after the current director, John Henshaw,
announced last week that he would step down to pursue career opportunities in
Maine. Kooris said Tuesday that he did not expect Henshaw’s departure to impact
the timeline of the pier project.
At least 4 towns now subject to subpoenas in school construction probe
At least four Connecticut municipalities have received
subpoenas from a federal grand jury seeking records from school construction
projects and any correspondence with Konstantinos Diamantis, the former state
official who oversaw the projects’ funding.
The subpoena
for Groton officials seeks records for two school projects, the West
Side Middle School and the Carl C. Cutler Middle School, which were converted
into elementary schools at a cost of about $90 million in 2019.
The subpoena also seek all documents to and from the state
Office of School Construction Grants & Review (OSCG&R) as well as
communications to and from the leader of that team, Konstantinos Diamantis.
[The Kosta Diamantis timeline]
Diamantis resigned from his post leading OSCG&R
and was fired as deputy secretary of the state Office of Policy and Management
on Oct. 29, 2021. His oversight of the school construction program has
become the focus of a federal grand jury investigation, which issued its first
subpoenas last April.
Groton is the fourth municipality to receive a subpoena from
the federal grand jury concerning school construction programs. The others
are Bristol, Hartford and Tolland. The subpoenas asked municipalities to submit
all responsive material to the grand jury by March 15.
The CT Mirror reported in mid-February that Groton officials butted
heads directly with Diamantis and his team over choosing a contractor to do
hazardous waste removal at the two schools.
Local officials had already selected O&G Industries, a
Torrington-based company, to serve as the primary contractor for the projects,
but O&G needed to hire a demolition and hazardous materials cleanup crew
for the job.
To do so, the town followed the normal procedures and
solicited offers from a number of companies specializing in those services.
The town was prepared to hire Stamford Wrecking Services for
the West Side project and American Environmental Inc. for the Cutler project
because they were the lowest bidders.
But local officials were stopped before they could complete
the contracts, town officials said.
Greg Hanover, Groton’s Director of Public Works, said
someone from the state notified O&G that it should reject the lowest bids
and award the contracts to AAIS, a West Haven company that was the runner-up
for both school projects.
Hanover declined to say who the state official was that made
that decision.
“Somebody contacted O&G from the Office of School
Constructions Grants and Review and informed them that there’s a new policy in
place and that for demolition contractors we were supposed to use one of the
state-qualified contractors and pay them on a time and material basis,” Hanover
said.
But the town “pushed back” and informed the state that the
town had already completed the procurement process for the work, Hanover said.
There were significant price disparities between what the
winning companies had offered and what AAIS had proposed. For the West Side
school project, for instance, Stamford Wrecking’s bid was hundreds of thousands
of dollars less than the bid submitted by AAIS.
“It kind of went back and forth, but we ultimately prevailed
over the state and hired the two low bidders,” Hanover said.
A similar situation played out in Bristol when city
officials there tried to hire a contractor for hazardous waste removal at the
Bristol Elementary School project.
In a letter to Diamantis, the city’s former corporation
counsel, Dale Clift, questioned why Diamantis’ team was getting involved.
The letter shows that the city received numerous bids
for the demolition and abatement work for Bristol’s Memorial Boulevard Arts
Magnet School on April 21, 2020.
Select Demo Services, which is headquartered in New Hampshire,
was the lowest bidder, offering to do the work for $4.73 million.
But before the contract could be finalized, Clift wrote,
officials in the city were approached by Michael Sanders, a former employee at
the state Department of Administrative Services. He advised the city to reject
the other bids and hire Bestech, an Ellington-based company, instead.
According to Clift’s letter, that “directive” was delivered
by Sanders but was issued by Diamantis. The city ultimately chose the low
bidder.
Danbury council combines $208M educational spending plan: ‘One bond and one question for voters’
DANBURY — The city will soon ask residents to vote on a
single, $208 million spending package for new
school construction and improvement projects.
This news follows a unanimous City Council vote Monday night
to combine two bonding ordinances into a single ordinance for the city’s
various education expansion projects. The special meeting took just seven
minutes.
The council’s approval Monday means the package will now go
to a public hearing and then referendum. The public hearing is anticipated to
be March 28.
“This ordinance replaces the prior two ordinance submittals
to seamlessly combine the project works into one bond and one question for the
electors and voters at the time and date they will vote on the question,” said
the notice of the special meeting, which was read aloud.
The ordinance authorizes the city to borrow the nearly $208
million to cover the new career academy construction project and property
purchase at the former Cartus Corp. headquarters, as well as other school
updates, projects and improvements for the district.
These other school projects, which are separate from the
career academy, are estimated to take up roughly $43.9 million of the total
$208 million. Some of that money will go towards plans
for a new Pre-K academy at Great Plain Elementary.
“The description kind of speaks for itself,” Mayor Dean
Esposito said. “We have an opportunity to move forward on this, so I thank you
for being here tonight to expedite this process and this project.”
Westport considers renovating Long Lots or building new school
WESTPORT — The Board of Education has narrowed the criteria
to help determine if it should renovate
Long Lots Elementary School or build a new school after a report
showed the building is in need of repair.
Superintendent Thomas Scarice said creating a list of
criteria for the board to review will help determine which route to take.
“A decision point is approaching the board on the
recommendation on the Long Lots facility,” Scarice said. “The board at this
point is in need of criteria in order to make a decision on a full renovation
or a new construction on the Long Lots campus.”
Scarice said a theoretical third option of replacing
systems, project by project is not on the table.
“The only two options that we’re putting before the board
are a renovation or a new construction,” he said.
Scarice said the five
main areas of criteria include space standards and enrollment,
instructional model, requirements for renovation, zoning approvals for a new
construction and hazardous materials abatement. The list of criteria also
includes a bevy of different factors, but the five listed are currently the
main points of concern.
One point of discussion between the two options include the
difference between the displacement of students while each project would being
constructed. It was found that a reconstruction would be “highly impactful”
throughout the project, while a new construction would have hardly any impact
because it would be built somewhere else on site, according to the BOE
presentation.
A reconstruction would take 24 to 36 months, nearly six to
12 months more than a new construction, which would take 18 to 24 months,
according to the presentation.
However, Scarice said hazardous materials abatement, which
is the safe and effective removal of a wide range of contaminants found in
buildings, could prolong the renovation but wouldn’t impact a new construction.
The total cost for both projects is to be determined. New
construction would require geotechnical testing, wetland approvals and traffic
studies, which could increase the total cost of the project, according to the
presentation.
He said renovation would also have to address repurposing an
auditorium, a gymnasium and the Stepping Stones Preschool, which would need
18,000 square feet.
He said a new construction would skip those concerns and the
building could be built the “right size” including the preschool factored in.
Scarice said the instruction model has to be considered.
“We would see an analysis by current instructional leaders in
the district to really take a look at the existing footprint and what is the
impact on instruction,” Scarice said.
He said the classrooms at Long Lots were designed for a
junior high school during the 1950s and 1960s. Scarice said they’re smaller
from what is warranted for a strong elementary program.
“In a new construction we would right size those
classrooms,” he said. “It is something that is truly important that we would be
doing internally.”
The board aims make a decision on which option to take in May.