LAO is less optimistic

The Legislative Analyst’s Office is not as confident as the state that the governor’s twin tunnels plan will reap billions in net benefits to the state.

From a paper presented by LAO at Tuesday’s legislative hearing on the Bay Delta Conservation Plan:

“According to BDCP, the benefits of the tunnels are 35 percent to 40 percent greater than the costs to the water users that will fund them. However, two factors could affect whether the project has net benefits. First, the cost of the project could be higher from cost overruns. Second, the benefits could be lower than estimated because of lower-than-anticipated water demand or costs of alternative supplies.”

The LAO also reports that a study of bridge and tunnel projects found that projects exceeded estimated costs by 34 percent on average, though the LAO adds that there is some research indicating water projects are less prone to overruns than transportation projects.

Read the whole paper here.

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