Dear Mr. Natsios:

We would like to thank you and your staff for the effort expended in preparing the October 2000 Finance Plan Update for the Central Artery/Tunnel (CA/T) Project. This update presents your Cost Schedule Update Revision 7 (Rev 7) cost estimate of $14.075 billion, revises the I-90 and I-93 opening milestones to include a 4-month extension, and maintains the December 2004 CA/T Project date for substantial completion. In accordance with Project Agreement, the October Finance Plan Update appropriately limits Federal-aid funding for the project to $8.549 billion.

In accordance with Section 340(c) of the Department of Transportation's (DOT) appropriations act for fiscal year (FY) 2001, the DOT's Office of the Inspector General (OIG) and the Federal Highway Administration (FHWA) have reviewed the October Finance Plan Update for the CA/T Project. Both agencies found the document consistent with the Finance Plan Guidance issued last May. The document is, therefore, accepted. I am enclosing a copy of the OIG's concurrence.

We acknowledge the certification of the October Finance Plan Update by Secretary Stephen Crosby of the Executive Office of Administration and Finance. The additional details provided by Treasurer Shannon O'Brien on the Transportation Infrastructure Fund was very much appreciated. We also acknowledge the certification received on October 2 from Commissioner Matthew Amorello of the Massachusetts Highway Department and Secretary Kevin Sullivan of the Executive Office of Transportation and Construction indicating consistency with the Statewide Transportation Improvement Program (STIP).

Your October 3 letter contained your report and recommendations on the Owner Controlled Insurance Program (OCIP) for the CA/T Project. Your report and that of our consultant, AON, are under review. We will provide you with detailed comments and followup actions on the continued implementation of the OCIP in a separate letter.

We are satisfied that a majority of the metropolitan planning organizations (12 of 13) endorsed the Memorandum of Understanding (MOU) establishing the definition and commitments to the $400 million Statewide Road and Bridge Program. This action fulfills the requirement stated in our letter of August 8, 2000, for our approval of the FY 2001 STIP. The FHWA will continue, throughout the year, to monitor the State's compliance with its commitment to fund at least $400 million on the Statewide Road and Bridge Program as described in the MOU.

We recognize that the preparation of a Financial Plan requires the best available data to make assumptions about the future, including assumptions about economic factors, the availability and cost of labor, and the ability of current and future contractors to meet the aggressive construction schedule. It is expected that your staff and our Division Office will provide timely notification if the actual project conditions indicate deviations from the assumptions used in the October Finance Plan Update.

I am enclosing comments specific to items in the October 2000 Finance Plan Update. Actions on these items should be addressed in the next Finance Plan Update, which is due in October 2001.

Your continued efforts to move this project forward and share information openly and frankly with us, other public agencies, and the general public are very much appreciated. The FHWA will continue to work with CA/T Project officials to maintain schedules, contain costs, deliver a quality product, and ensure the safety of the workers and the public.

Sincerely yours, Vincent F. Schimmoller Program Manager, Infrastructure

2 Enclosures
FHWA Comments
Office of Inspector General Audit Report (coming soon)

cc:
Mr. Kevin Sullivan
Secretary
Executive Office of Transportation and Construction

Mr. Michael Lewis
Acting CA/T Project Director

Mr. Matthew Amorello
Commissioner
Massachusetts Highway Department