The Dulles Rail Imbroglio

The Dulles Rail line, a proposed 11.6-mile Metrorail extension in the Dulles Corridor from the existing West Falls Church Metrorail station, through Tysons Corner to Reston, VA (Wiehle Avenue), has become the subject of intense controversy. In a January 24 letter, FTA Administrator James Simpson notified Virginia Governor Tim Kaine that the Dulles Rail project, in its current form would receive an overall New Starts rating of “Medium-Low,” which would render it ineligible to advance into Final Design and receive federal assistance of up to $1.5 billion (a $900 million New Starts grant, plus a $375 million TIFIA loan and a $200 million line of credit to be used if needed). Besides the project’s low cost-effectiveness, the letter also questioned the soundness of the capital financial plan and the management arrangements under which the project would be implemented. “I have serious concerns whether it would be appropriate to continue further investment of federal New Starts funds in this project,” Simpson’s letter concluded.

The project’s convoluted history no doubt contributed to Mr. Simpson’s skepticism. In November 2002, the region adopted the Metrorail extension in the Dulles Airport Corridor as the “locally preferred alternative.” In June 2004, FTA approved Virginia’s request to initiate preliminary engineering of the first phase of the rail line (to Reston). Preliminary engineering was completed in the Spring of 2007. In March 2007, the Commonwealth of Virginia accepted a proposal from the Metropolitan Washington Airports Authority to assume responsibility for construction of the project and to complete the rail line (to Dulles Airport) using toll road revenues from the Dulles Toll Road to finance the project. Formal transfer of the project and the toll road to the Airports Authority has begun. In the meantime the cost estimate for Phase I rose from $1.52 billion in December 2004 to $2.4-2.7 billion in March 2007.

Over the years, a succession of FTA Administrators and Acting Administrators have monitored progress of the Dulles Corridor planning process and have given incremental approvals to advance the rail project through its successive stages. Concerns about the viability of the project began to surface last year. In its FY 2008 New Starts Report to Congress released in February 2007, FTA rated the project “medium-low” for cost-effectiveness. That should have been a red flag to the project sponsors. Under FTA’s New Starts evaluation guidance, a rating of at least “medium” for cost-effectiveness is necessary to move a project into final design and recommend it for funding. A July 2007 report by the Inspector General’s Office ran up another red flag. The report observed that the project has experienced substantial growth in estimated costs and large schedule slippages— clear risk indicators that merited FTA’s close monitoring, the report warned. Specifically, the Inspector General recommended that FTA exercise “extra vigilance” in assessing the risks posed by the Airport Authority (MWAA) takeover of the project. Said the report: “The Boston Central Artery/Tunnel Project (ed note: commonly known as the “Big Dig”) which experienced massive cost overruns and schedule delays, presents many lessons learned regarding the project sponsor’s ineffective oversight. These lessons are relevant in light of the MWAA’s lack of experience in managing a mass transit project.”

The Dulles Rail Imbroglio