Subway From Hell In The City Of Angels

Consider it the $1.3 billion tunnel to a hot pastrami sandwich. On any given lunch hour, it seems just about everyone riding Los Angeles' gleaming subway train is on his or her way to Langer's Delicatessen. And why not? Just hop a train from downtown and ride out to the end of the line, all of four miles away, and you're at Langer's, a fine old deli in a neighborhood that has seen better days.

A good deal for pastrami lovers maybe. But to most of Los Angeles County's 9 million residents, the subway increasingly has the look of a boondoggle. Started a decade ago by then Mayor Tom Bradley to help give L.A. the aura of a world-class metro center, the $5.8 billion project is plagued by $240 million in cost overruns, with just 4.4 of its planned 21 miles built.

ASLEEP AT THE SWITCH. Among its many angry critics is the federal government, which is footing half the tab. In late June, the Federal Transit Administration said it planned to beef up its oversight of the often delayed project once again--and was debating whether to help fund the overruns. "This is the biggest public-works project in the country, and it's turning out to be nothing short of disaster," charges State Senator and longtime opponent Tom Hayden.

Just stroll down Hollywood Boulevard, where a 6.7-mile-long extension to the line has been under construction for more than a year. On June 22, a 65-foot-deep, block-long sinkhole caused the street to cave in as tunnel workers below scrambled for their lives. That gaping hole was the latest in a series of calamities along the construction route. During the past year, portions of Hollywood Boulevard and other streets along three miles of the project have been dipping, sagging, and, finally, caving in, as workers tunnel below.

The Metropolitan Transit Authority chalks up the sinkage mainly to poor soil conditions and the mishaps that come with any major construction project. But critics charge the MTA board, which includes Los Angeles Mayor Richard J. Riordan and the five-member county Board of Supervisors, with a lack of supervision--and backbone. "Oversight has been abysmal," says Assemblyman Richard Katz, chairman of the State Assembly's Transportation Committee. "The MTA is being run over by the contracting community."

Consider the case of Parsons-Dillingham, a joint-venture company that was managing construction on the Hollywood Boulevard tunnel. To satisfy federal regulators, MTA Chief Executive Franklin E. White ordered the company off the subway project last October. After intense lobbying efforts and threats of legal actions, however, Parsons-Dillingham scraped its way back. It still has about $30 million in contracts. Parsons-Dillingham says its stock was done "in accordance with industry standards." White says he is "gradually winding down" Parsons' contracts in order to save construction and legal expenses.

WHISTLE-BLOWERS. There have been plenty of other setbacks. In September, 1993, the MTA discovered that some portions of the tunnel were just six inches thick, half the design requirement. Shortly thereafter, foul smelling hydrogen sulfide leaking into tunnels required the installation of gas detectors and expensive improvements to the ventilation system. In a 1994 Hollywood Boulevard incident, an internal MTA probe found that scrap wood instead of concrete had been used to fill tunnel joints and that wooden, rather than steel, wedges had been employed for bracing the structure.

Now, even some high-level engineers are sniping at the project. In a May 19 letter obtained by BUSINESS WEEK and addressed to the inspector general of the Transportation Dept., Gary L. Buffington, manager of safety for Parsons-Dillingham, complains of "waste, fraud, and gross mismanagement" by the MTA and Parsons-Dillingham. Buffington charges that company supervisors ignored important safety precautions in order to speed up work.

The MTA insists that the subway system is safe. "Every time there's a new crack, it's a feeding frenzy," says White, a former New York state transportation commissioner. Moreover, White asserts that contractors are doing an adequate job. "The firms we have engaged are the preeminent construction and engineering firms in the world."

However, given continuing incidents such as the new sinkhole on Hollywood Boulevard, those arguments are increasingly hard to sustain. "That was more than just an unfortunate accident," says James Pott, an engineer and former head of the Rail Construction Corp. "We're just damn lucky no one was killed." Not something that Los Angeles riders want to be worrying about during their next run for a lunchtime pastrami sandwich.

Before it's here, it's on the Bloomberg Terminal.