Southwest light-rail budget grows by $210 million

Members of the Metropolitan Council are expected to consider a measure Wednesday that would increase the price tag of the Southwest light-rail line by $210 million.

That figure includes $40 million to be paid in the next 60 days by the regional planning body under a proposed settlement with the project's civil construction contractor, Lunda McCrossan Joint Venture (LMJV), to cover costs already incurred after a series of change orders approved by the council.

All told, the $210 million will help "resolve disputed matters" with LMJV through negotiations and mediation, according to a project memorandum posted Tuesday on the council's website.

Construction of the 14.5-mile line began in 2018, but progress was slowed when builders needed to make substantial changes to the original plan. Those changes included altering the design and construction of a tunnel in the Kenilworth Corridor in Minneapolis, building an $93 million wall to separate freight and light-rail trains west of Target Field, and adding back the Eden Prairie Town Center Station, which had been cut earlier to save costs.

Southwest's current cost is $2.2 billion, but council officials would not say Tuesday whether that's the final budget number, and a spokeswoman for the council declined to comment on the proposed settlement.

The council announced a year ago that the cost of building the line, which will link downtown Minneapolis with Eden Prairie, would exceed the then-price tag of $2 billion and that passenger service would not begin in 2023 as planned. Since then, the council has not released an updated budget number or provided more guidance on when the line will open.

According to the memo, the Met Council and LMJV agree that at least another 34 months will be needed to complete the work, but it's unclear when opening day for the line will come.

The document hints of discord between the two parties, though the dispute has not landed in court.

"The parties agree that 30 months of the approximately 34-month delay is due to changes by the council. The parties dispute who is responsible for the remaining 4 months of delay," the memo states. "The council and LMJV do not agree on the total cost impacts of these disputes."

After a series of cost overruns and change orders, the project's contingency fund dried up, and Hennepin County was forced to tap into $200 million that was set aside to keep the project going. The Federal Transit Administration has approved a $929 million grant to build the project, but it's unclear who might cover future cost overruns.