PROJECT DESCRIPTION: The Central Artery/Tunnel (CA/T) Project in Boston is building or rebuilding 161 lane miles of urban highway, about half in tunnels, in a 7.5-mile corridor. Construction extends from the I-93 Massachusetts Avenue interchange on the south to Charlestown's Sullivan Square on the north, and from the Massachusetts Turnpike/I-93 interchange near South Station on the west under Boston Harbor to Logan Airport and Route 1A in East Boston.

CURRENT PROJECT COST as of October 2000: $14.075 billion (includes $258 million contingency). Expenditures through June 2000, were $9.122 billion. Cost remaining to complete is estimated at $4.954 billion. Of this amount $3.756 billion is for construction.

FINANCIAL PLAN EVALUATION
FINANCIAL PLAN ELEMENT	COMMENTS
A. Current Cost Estimate	1. The October 2000 Update was prepared in accordance with the FHWA's May 23, 2000 Finance Plan Guidance. The $13.5 billion total cost estimate contained in the June 2000 Finance Plan Update was used as "Initial Cost" or "base cost" as agreed. The base cost should be carriedforward in all future updates. 2. Page 5: The narrative indicates that " any contractor claims for schedule extensions resulting from craft labor and/or resource shortages are not included." It is expected that any increase in cost due to these factors will be identified and tracked in the Project Monthly Management (PMM) report. 3. Page 10 and following: The discussion of the Owner Controlled Insurance Program (OCIP) summarizes the recommendations made in the Project's October 3, 2000 report. This October OCIP Report and recommendations made by AON serving as technical assistance to FHWA are under review and comments will be furnished the CA/T Project under separate cover. Any cost changes resulting from modifications to the OCIP or in conjunction with the renegotiation of insurance policies is to be documented in the PMM.
B. Implementation Plan	1. Page 16: The Ted Williams Tunnel and Initial Leverett Circle Connector are indicated as "completed." These facilities have been opened to traffic but follow on contracts or additional work remain on both facilities.
C. Project Financingand Revenues	1. Page 21: To clarify Federal fund involvement, it is suggested that afootnote be added to the Grant Anticipation Note (GAN) segment on Exhibit 5a to convey the expectation that Federal Funds are anticipated to reimburse the principal on these notes. 2. Page 24: The indication that $2 million in RABA funds will be used by the Project in FY 2001 is inconsistent with the programming target letter issued by the Executive Office of Transportation and Construction to the Metropolitan Planning Organizations (MPO's) as well as the approved Statewide Transportation Improvement Plan (STIP). The referenced documents indicate the RABA apportionment will be made available to the Statewide Road and Bridge Program. 3. Page 25: Footnote 11 indicates an incorrect year end Advance Construction (AC) balance. The AC balance at the end of FY 2000 was $3.176 billion. 4. Page 26: Exhibit 5f indicates AC conversions that are slightly different from those indicated in the STIP tables furnished by the CA/T Project for distribution to the MPO's. These figures should be consistent. 5. Page 27-33: It would be helpful if the discussion of the funding sources provided explanations specific to the information presented in Exhibit 5d. It is confusing to indicate that expenditures have been made before bonds have been sold or other agencies have provided their appropriate shares,unless there is an understanding of the manner in which the state provides the cash up front before these anticipated revenues are in place. 6. Page 32: The Transportation Infrastructure Fund (TIF) discussion indicates a capability to achieve $2.168 billion for the CA/T Project and this is supported by the letter from State Treasurer Shannon O'Brien dated September 29, 2000 (Appendix H). Because the revenue capabilities of the TIF can vary depending on many factors, we request that a quarterly reporting system be established in these initial years of the fund to keep us appraised of the status of actions and account information that will demonstrate fund progress consistent with the projections provided by the Treasurer.
D. Cash Flow	No comments on this item.
E. Other Factors	1. Page 41: The monitoring mechanism to track expenditures on the Statewide Road and Bridge Program has not been fully implemented. The commitment to assure that $400 million is expended is critical to STIP approval and the obligation of Federal funds for the project. A tracking system that will provide current information is necessary to alert all parties and enable timely corrective action if it becomes necessary to assure that the objective is achieved.

Additional Comments:

• We understand the October Finance Plan Update has been forwarded to all Massachusetts' MPO's. Copies of any comments received and responses made to any comments should be provided to the FHWA Division Office.

FHWA's Response to the October 2000 Finance Plan Update for the Central Artery/Tunnel (CA/T) Project