Wednesday, February 17, 2010

HRT chief asks for state investigation of light-rail project

Written by 

Hampton Roads Transit's new president and CEO, Philip Shucet, called for the inspector general to investigate the agency's light-rail project and business practices, The Virginian-Pilot reports. HRT in recent months has been faulted for amassing more than $100 million in cost overruns on Norfolk's starter light-rail line and for failing to pursue a suspected embezzlement of $80,000.

Shucet wrote a letter dated Feb. 13 to Transportation Secretary Sean Connaughton requesting a review by the inspector general's office within the Virginia Department of Transportation. Shucet specifically wants state investigators to examine three issues: HRT's business practices as they relate to The Tide light-rail project, HRT's consultant selection process and HRT's handling of the suspected embezzlement.

"We need to look and see if there's anything there and get it out on the table," Shucet said in an interview. "This is a good thing to do for any new CEO - to have someone with skill take a broad look and tell you if there are any issues that warrant a closer look," he added.

Shucet took the helm of HRT on Feb. 1, replacing Michael Townes, who was forced to step down last month amid charges of mismanagement and failure to keep city leaders and transit board members informed of problems with light rail and within the agency. Over the past year, the cost of Norfolk's 7.4-mile starter light-rail line ballooned 47 percent from $232 million to an estimated $340 million. Its opening has been delayed 18 months until mid-2011.

Shucet, however, does not trust previously released numbers and is working with his staff, aided by work from consultant AECOM, to produce a final light-rail budget that will be presented to the HRT board at a meeting Feb. 18. He told the Norfolk City Council last week that he's perplexed that nearly half of the light-rail budget is for "soft costs," much of which are consulting fees. Soft costs typically account for 15 percent of road projects and 20 to 30 percent of light-rail projects, said Shucet, former Virginia Department of Transportation commissioner.

Shucet also wants answers surrounding the reported theft of $80,000 from bus fare boxes in Virginia Beach, for which HRT fired three employees but did not pursue criminal charges. At the urging of HRT board chairman and Beach Councilman Jim Wood, Virginia Beach police are now investigating.

Shucet, who has a reputation for fixing troubled companies or agencies, was hired by HRT on a contract basis to contain costs while finishing construction of the light-rail line. In two weeks on the job, he's made changes that he said would save more than $14 million in costs to the light-rail project. Shucet reviewed the changes with about 100 residents gathered at a meeting of the Norfolk Tea Party 2.

The most recent change occurred Friday when he appointed a project management team within HRT, thereby eliminating a layer of consultants and avoiding about $7 million in consulting fees.

"Nobody will ever manage a project better than the owner," Shucet said. "There was a heavy layer of support through consultants, which perhaps was appropriate initially for an agency that really hadn't managed a construction before."

Shucet also consolidated two of the light rail's largest construction contracts, resulting in an estimated savings of about $7.5 million.

blog comments powered by Disqus