San Francisco’s new director in charge of the Central Subway, Nadeem Tahir, is inheriting a “challenge,” as he calls it.
That’s an understatement. But for Tahir, it also isn’t anything new.
Tahir once played a key role on Los Angeles’ Red Line metro project, which a 1993 Los Angeles Times investigation called perhaps the “costliest” transit project in the United States.
It was $200 million over budget. Construction “change orders” mounted. Public trust eroded.
Sound familiar? Those problems in particular mirror Central Subway’s recent bad headlines.
The $1.6 billion San Francisco project is on track to bust through its “contingency” funds, which is meant for cost overruns, according to a federal oversight report. Though the final tally of the change order cost is not yet complete, because those change orders have been in dispute by The City, industry experts have pegged them to be worth millions of dollars.
The Central Subway debut has also slipped from late 2018 to late 2019, which the federal oversight monitor wrote previously may slip into mid-2020, at least.
Tahir was not in charge of the LA project, but he was a high-level manager who signed off on environmental reviews for it.
He’s taking those lessons and will apply them to San Francisco, where he plans to speed up payment of “change orders” with the project’s contractor, Tutor Perini Corp., which has filed many claims alleging The City changed the scope of the Central Subway project, which has cost the company more cash.
It’s perhaps a controversial strategy as city officials have publicly lamented Central Subway’s lagging schedule and ballooning cost. But it’s one that was used on the Red Line, decades ago.
That project prepared Tahir for inheriting the tail end of San Francisco’s transportation albatross, the Central Subway, which some derided as a “train to nowhere” when it was first pitched.
Now it is the bane of Chinatown merchants who first asked for the subway. But now their shops — hidden by ongoing street disruptions — teeter on the brink of closure.
Tahir walked the San Francisco Examiner through his professional experience in a sit-down interview at the San Francisco Municipal Transportation Agency’s headquarters at 1 South Van Ness, on his tenth day on the job, at the end of July.
He didn’t have to go far to take on the work. Tahir lives in Alamo, CA, near Walnut Creek.
Shortly after he walked in the door, SFMTA announced its six-week undertaking to determine just how delayed the Central Subway project really is, which followed days after an Examiner report exposing the newest warning from federal monitors on the project’s potential cost overruns.
Tahir said Los Angeles was a far more chaotic experience. The plan was to build a project in three segments from downtown Los Angeles, through Hollywood to North Hollywood in San Fernando Valley.
“I was the guy who was hired from Chicago,” Tahir said. “I said, ‘you guys are going to build a rail system in Los Angeles?’”
He was incredulous. Then, as now, The City of Angels was also famous for its freeways and car-centric lifestyle.
“The land of sage-brush and jackrabbits, they used to call it,” Tahir said. “I started that project from the ground all the way to the end.”
That project had its own share of problems, like when transit administrators did not secure access rights to land in the path of construction, according to the Los Angeles Times. That hampered eight of the first 10 subway construction contracts.
Tahir ascribed many of that project’s problems to inexperienced staff. Nationally, so few major transit projects were built before the Red Line —which began in the 1980s — that experienced personnel were hard to find, he said.
At the time, the last major transit project built in the United States of similar scope was BART, Tahir said. BART made its debut in 1972, roughly ten years before the Red Line was in serious planning phases.
“When we first started, nobody knew anything,” Tahir said.
On one “big tunneling job” they encountered methane gas that delayed efforts. A sinkhole formed. A tunnel was built out of alignment. Walls were built to the improper thickness.
“We don’t have anything like that here,” with Central Subway, Tahir said.
As for Central Subway, he said, “These tunneling projects are very difficult, very complex, and also dangerous. I don’t know if we appreciate that this project has been done so smoothly.”
While compared to the Red Line’s $200 million cost overruns Central Subway’s woes may seem small, San Franciscans have still cried foul at alleged missteps that continue to mount.
A federal oversight monitor warned Central Subway faces a two-year delay and may suffer millions in “change orders” from the project. Change orders arise when plans change and the construction company, Tutor Perini Corp., asks for a cost increase to accommodate that change.
The Red Line dealt with its own mountain of change orders by paying them quickly “without formal auditing of the contractors’ claims,” the Los Angeles Times reported in its 1993 investigation.
On Central Subway, Tahir said he would deal with Central Subway’s claims by paying them “immediately.”
“There are always claims, and there are a lot of claims that can be justified,” he said. “As an agency and as a project manager, I have to recognize when they have a fair claim.”
He continued, “they should not have to wait a year, or two years, or three years, for some work we know is extra, and we are not paying them for whatever reason. That should not be done.”
When asked about the accuracy of SFMTA disputing claims, which it has done so far in the project before Tahir’s arrival, he said SFMTA and Tutor Perini may not be approaching change orders in a traditional fashion.
Most change orders are for major changes, he said. But SFMTA and Tutor Perini have been issuing change orders for things that should be “technicalities” filed as “fee change notices,” which are less severe, take less overhead to process, and are resolved more quickly.
There were some highlights at the Red Line. Besides completing the project itself, Tahir worked closely with a Southern California transportation commissioner: Actor George Takei, who played Hikaru Sulu in Star Trek.
“He was my buddy. He used to be in my office all the time,” Tahir said. Takei asked him to place a train station alongside a school for the blind, which Tahir made a reality.
Tahir came across another demanding figure while working on the Red Line — Ron Tutor, CEO of Tutor Perini Corp.
Tutor Perini Corp. served as contractor on both the Red Line and Central Subway. Tutor — the man, not the company — was not a fan of SFMTA’s leadership.
“Tutor Perini Corporation’s executives have sat thru [sic] too many meetings with you, Ed, where you promise the moon and deliver nothing,” Tutor wrote to former SFMTA Director of Transportation Ed Reiskin in May.
Tahir told the Examiner, “I was not at a level at which I was dealing with him” personally in Los Angeles, but “I was staff, I used to see him in action.”
Now Tahir’s strategy of paying change orders on time may be turning the project around in Ron Tutor’s eyes.
In a Thursday quarterly earnings conference call for his company’s investors, Tutor dropped major hints that a “Bay Area” project his company is working on would soon bear financial fruit for Tutor Perini Corp. While Tutor Perini has a contract for California High-Speed Rail, Central Subway is his most prominent — and perhaps only — major Bay Area project, according to Tutor Perini’s website.
A transcript of that conference call is available from The Motley Fool, a financial services company.
“We just concluded a major negotiation with one of our most, shall we say, impacted owners in the Bay Area on a very large project, where the trends have completely reversed. We expect to get a major change, reducing the underbilling significantly,” Tutor told his investors.
While he added he could not get into specifics, the next nine months will “significantly reduce our under-billings and significantly increase our cash,” Tutor said.
Just like in Los Angeles.
This story has been updated to contain an explanation on the amount of money the Central Subway’s change orders may cost, and to include the project delivery date.