1). Cost of Replacing the Cypress Viaduct Has Increased Significantly

As of March 1996, Caltrans estimated that the total cost of replacing the Cypress Viaduct will be $1.13 billion. Of this amount, $1.01 billion, or about 90 percent, will be federally financed through the emergency relief program; California will finance the remainder. Most of these increases have occurred because Caltrans incurred additional costs for construction, traffic management, and relocation of the rail yards once construction began. FHWA’s Guidance Provides Inconsistent Information on Using Emergency Relief Funds

FHWA’s regulations allow the use of emergency relief funds for betterments. However, when community opposition and environmental concerns precipitated a call for alternatives, FHWA did not approve the relocation on the basis of the emergency relief regulations, which allow for relocations only when they are clearly economically justified to prevent recurring damage. Conclusions

The project to replace the Cypress Viaduct has taken longer and cost more to complete than initially estimated because local opposition, environmental requirements, and railroad relocation activities have delayed construction and expanded the scope of the project. The existing regulations state that “emergency relief reimbursement is limited to the cost of a new facility to current design standards of comparable capacity and character to the destroyed facility.” Following the regulations, FHWA could have estimated the costs of replacing the Cypress Viaduct with a facility built to current design standards along the original alignment and limited the use of emergency relief funding to those costs. In other words, if a situation persists with no corrective action for an extended period of time, it may be unreasonable to continue to classify it as a disaster related emergency, but rather as a long-term need to be funded with regular Federal-aid.”

	Statements Consistent With FHWA’s Actions on the Cypress Viaduct Project

“In cases where a categorical exclusion classification is not appropriate, an environmental assessment or environmental impact statement must be prepared.” “Betterments resulting from environmental or permit requirements beyond the control of the highway agency are eligible for ER funds if these betterments are normally required when the Agency makes repairs of a similar nature in its own work.”

Scope and Methodology

For information on the current status of the project, its estimated completion date, and the reasons for any delays, we interviewed officials at FHWA and the California Department of Transportation (Caltrans), performed in-depth file reviews, and reviewed Caltrans’ construction status reports.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the status of the replacement of the Cypress Viaduct in Oakland, California, focusing on the: (1) expected completion date and reasons for construction delays; (2) estimated cost of the project and reasons for any cost growth; and (3) guidance governing the Federal Highway Administration's (FHwA) use of emergency relief funds.

What GAO Found

GAO found that: (1) the California Department of Transportation (Caltrans) has completed one-third of the Cypress Viaduct's construction and expects to have the project completed by 1998; (2) the replacement of the Cypress Viaduct has been hampered by public opposition, environmental concerns, and railroad negotiations; (3) Caltrans estimates total project costs will be $1.13 billion, 90 percent of which is federally financed through an emergency relief program; (4) construction costs are higher than originally planned because Caltrans underestimated the costs of constructing the freeway, managing traffic, and relocating rail yards; (5) Caltrans risks incurring additional costs because the project is in the early construction stages; (6) FHwA approved funding for the Cypress Viaduct without determining whether it was economically justified to prevent recurring damage and without placing limits on the use of emergency relief funds; (7) FHwA based its funding decision on the emergency relief manual and whether improvements could be performed using emergency relief funds or traditional transportation funds; and (8) the alternative that FHwA approved resulted in more extensive construction, higher costs, and greater risk of delay than would have occurred in rebuilding the structure prior to the earthquake.