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Big Dig Yields Big Bucks

by Pratap ChatterjeeSpecial to CorpWatch
April 24th, 2003


The Boston Celtic's basketball team are proud of their decade-old stadium -- the 19,600 seat Fleet Center which replaced the Boston Garden, their old home, in 1993. It's hard to miss the flashy new building that occupies four acres in the heart of Boston.

But San Francisco-based construction giant Bechtel didn't notice it. A Boston Globe investigation of Bechtel's blueprints of the most expensive civil engineering project in US history to build a highway underneath the city, shows that the company forgot to include the Fleet Center during the planning. The mistake was discovered in 1997 and cost just under a million dollars to fix.

A year-long investigation of the "Big Dig," or Boston Central Artery project, by the Globe published in February 2003, showed that $1.1 billion or two-thirds of the cost-overruns alone are tied to the mistakes of Bechtel and its jointhttp://www.boston.com/globe/metro/packages/bechtel)

"Yet, even as Bechtel's errors helped drive up the Big Dig's cost, the company never paid for any of its mistakes. Instead, it profited," wrote the newspaper. "To date, Bechtel has received more than $264 million beyond what its original contracts called for, in part because Bechtel received additional money to fix its errors, records show."

"These allegations do a serious disservice to those trying to understand the truth about the largest, most complex urban transportation project in U.S. history," was the angry Bechtel's response in a detailed rebuttal.

Yet Bechtel fails to explain how the original price tag of $2.5 billion spiraled upwards every, until in 2003 it had hit a whopping $14.6 billion or $1.8 billion a mile, making it the world's most expensive highway.

It's true that the cost overruns are not a surprise to everybody in government. The Massachusetts State Audit Office came up with similar figures in estimated cost over-runs to careless management of the part of Bechtel/Parsons Brinckerhoff. "The state auditor has been shouting and screaming about this for years but nobody has paid any attention," says Glenn Briere, a spokesman for the auditor.

Briere and other Big Dig watchers say that Bechtel has a major conflict of interest because the company designed the project, then got several of the construction contracts and was also given responsiblity to manage the project. While there is precedent for having managers also do design work in other large construction projects across the country, urban planners say that it is rare for a management consultant to get as high a percentage of design work as Bechtel received.

"There is no conflict here. The Bechtel/Parsons Brinckerhoff joint venture is responsible for the program management of the project. The JV's (joint venture's) work includes, among other things, preliminary design and construction management. Although the joint venture acts as the state's management representative for nearly all aspects of the Massachusetts Highway Department's contracts, awarding the work is solely the prerogative of MHD," says Jeff Berger, a spokesman for Bechtel.

As noted elsewhere in this series, Peter Berlandi, a chief fundraiser for then Massachusetts Governor William Weld in the 1990's, was also on the Bechtel payroll working on the Big Dig project.


Back to Bechtel Wins Iraq War Contracts.

Pratap Chatterjee is an investigative journalist based in Berkeley, California.