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HRT chief asks for state investigation of light-rail project

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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.

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