Correspondence

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Southeastern Pennsylvania Transit Authority Market Street Elevated Project

On January 24, we issued a letter in response to a request from Rep. Joseph Pitts that we evaluate the Southeastern Pennsylvania Transit Authority’s (SEPTA) Market Street Elevated Project. We found that: (1) FTA was overseeing the Project and was aware of delays in 2002, when FTA’s project management oversight contractor reported problems with the Cobbs Creek segment; (2) an FTA review found no significant deficiencies in SEPTA’s financial management system; (3) construction delays resulted from disputes between SEPTA and construction contractor PKF over material specifications, which led SEPTA to terminate the contract and PKF to sue SEPTA; (4) the Cobbs Creek segment was rebid and is at least 2 years behind schedule and at least $14 million over budget, and the general contract will be rebid in April 2006; (5) the Guideway segment is 11 months behind schedule; and (6) there are other risks to the Project’s cost, including $4.3 million in claims filed by PKF, significantly higher insurance costs, and pending lawsuits filed by PKF and a surety company.