The Connecticut State Bond Commission approved an additional $55 million for the New London State Pier redevelopment project on Friday – which officials said is now estimated to cost a total of $235.5 million.
The costs for controversial plans to redevelop the State Pier into a staging ground for planned offshore wind projects – touted by state officials but facing local opposition, particularly from businesses that use the pier – were originally pegged at $93 million.
The price was later estimated to be about $157 million, before Gov. Ned Lamont told The Day editorial board in January that the costs could exceed $200 million. Now, the estimate stands at $235.5 million.
State Rep. Holly Cheeseman, R-East Lyme, a member of the Bond Commission, asked Office of Policy and Management Deputy Secretary Kosta Diamantis if the additional bonding would address “cost overruns” with the State Pier project. Diamantis disputed that they were cost overruns, instead saying the earlier cost estimates were based on incomplete project plans.
Cheeseman asked Diamantis if he was confident that $235.5 million was the “actual figure,” and Diamantis replied that he was. Cheeseman told CT Examiner after the meeting that she understood Diamantis’ comment to mean that the cost would not go any higher.
“Of course, the proof of the pudding is in the eating,” Cheeseman said.
Connecticut Port Authority Executive Director John Henshaw told CT Examiner that the earlier numbers were estimates based on incomplete designs – the $93 million estimate was from when the project design was 3 percent complete, and the $157 million came from when it was 30 percent complete, he said. Now the design is 100 percent complete, and the cost estimate is $235.5 million.
The new estimate includes $193 million in expected construction costs, another $11 million for contingencies, and $31 million in “soft costs” including design, engineering, permitting and environmental mitigation.
Henshaw said the $78.5 million jump in the cost estimate was a result of “getting into real numbers,” with the construction manager, who has the best understanding of what the costs are expected to be. The $235.5 million is still an estimate. “Work packages” still have to be put up for bids, and the bids will dictate the final, guaranteed maximum price, he said.
Cheeseman said Diamantis’ explanation may not pass “the smell test” among skeptics in southeastern Connecticut, given the Port Authority’s troubled history. She said she has no reason not to believe Diamantis’ explanation, but said it’s an issue that she and other lawmakers from the region were concerned with and would watch closely.
“It does concern me that, because due diligence wasn’t done in the first place, we are faced with higher costs than were anticipated,” Cheeseman said. “After all, what’s not provided by Ørsted and Revolution Wind and Eversource is going to have to be paid for by the Connecticut taxpayers.”
In a meeting on Tuesday, the Port Authority Board of Directors voted to allow Henshaw to negotiate an agreement with Kiewit Infrastructure Co. to develop the project with a target price of $204 million. When told on Friday that the “soft costs” raised that total to $235 million, Port Authority critic Kevin Blacker said it was an example of the agency misleading people about the cost of the project.
“It’s deceptive, because they tell the public it’s gonna be $157 million, or it’s gonna be $204 million, but then actually the truth is the project is gonna cost $235 million,” Blacker said.
Blacker said the rising cost estimates are another example of what he has been trying to tell people for two years – that this isn’t a good deal for New London, and it isn’t a good plan for the State Pier.
“Money is one indication of when you’re not being efficient and when you’re not doing things right,” Blacker said. “When prices spiral out of control, it’s an indication that bad judgement was used in the planning. And the project went from $93 [million] to $157 to $200 – it’s not a good plan.”
Eversource and Ørsted have pledged $75 million to the project. State Sen. Paul Formica, R-East Lyme, said the intent was for a roughly even split, with the state also paying about $75 million to support the project. As it currently stands, the state would fund about $160 million, while the companies contribute $75 million.
Following Lamont’s comments to The Day, which Formica said “took everybody a little bit by surprise,” the senator asked the Port Authority Board of Directors at a January meeting who would be responsible for cost overruns.
Board President David Kooris said at that meeting that the port authority would have to go to the state for additional funding if costs are above what was previously budgeted. If the state denies that request, it would fall to Ørsted and Eversource to cover the bill, he said. If they decline, then the scope of the project has to be narrowed, he said.