The Southwest Light Rail Transit route from Minneapolis to Eden Prairie would be an extension of the Green Line, which now ends at Target Field Station in downtown Minneapolis (above). (File photo: Bill Klotz)

Southwest light rail project cost rises to $2 billion

By: Brian Johnson May 15, 2018 4:02 pm

The expected cost of the planned Southwest Light Rail Transit line has jumped to just north of $2 billion, a $145 million increase from the previous estimate.

Metropolitan Council Chair Alene Tchourumoff on Tuesday blamed the 7.8 percent increase on higher costs associated with freight rail negotiations, environmental analysis, rebidding of the civil construction contract, and higher prices for steel, labor and property acquisition, among other factors.

The news comes less than two weeks after the team of Black River Falls, Wisconsin-based Lunda Construction and Maple Grove-based C.S. McCrossan submitted the apparent low bid of $799.514 million for civil construction, the single biggest work package for the planned 14.5-mile rail line between Minneapolis and Eden Prairie.

Tchourumoff said in a statement that the council will ask Hennepin County and the Hennepin County Regional Rail Authority to cover the funding gap. The federal government’s expected contribution is capped at $929.5 million.

Last August, the Met Council received four civil construction bids for the project. The bids ranged from $796.5 million to $1.08 billion. The council later rejected the bids on the grounds that they were too high and “non-responsive” to bid requirements.

Since August, diesel fuel prices have increased by 17 percent to $2.99 per gallon, and the raw steel price index has increased by 40 percent to $867 per ton, according to the Met Council. Labor and property acquisition costs have also gone up.

Hennepin County will consider its funding levels at board meetings this month, and the Met Council will seek a recommendation on the project budget at the May 23 meeting of the council’s Transportation and Management Committee.

The Met Council is seeking Federal Transit Administration approval for the project this spring.

Existing funding sources to date include Hennepin County ($393.6 million), the Counties Transit Improvement Board ($226.4 million in committed funds), Hennepin County Regional Railroad Authority ($185.8 million), in-kind land transfers ($69 million), the state of Minnesota ($30.3 million) and other local contributions ($23.7 million).

Heavy construction could begin in 2019 and continue into 2022, Met Council spokeswoman Laura Baenen said earlier this month. The line is scheduled to open in 2023.

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