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May 26, 2022

Port Authority chair: Officials knew State Pier would cost more than $93M

A rendering of the State Pier facility in New London after infrastructure improvements in the approved plan. The pier will be an offshore wind hub.

The chairman of the Connecticut Port Authority said Thursday that officials knew as far back as May 2019, when the project was first pitched, that the cost of converting the State Pier in New London into the staging point for an offshore wind farm was going to exceed estimates.

The Port Authority and Gov. Ned Lamont’s office announced in May 2019 that the project would cost an estimated $93 million. But officials even then knew the cost was going to be closer to $120 million, David Kooris told the State Bond Commission on Thursday.

Kooris, who didn’t become the leader of the quasi-public entity until later in the summer of 2019, detailed a series of problems behind ballooning cost estimates that now exceed $255 million, even as the commission approved another $20 million in financing for the project.

“To be totally frank, there probably should have been more nuance conveyed at that time that it was a preliminary estimate,” Kooris said of the $93 million estimate offered by the authority and by Gov. Ned Lamont’s office.

That figure didn’t include all contingencies and “soft costs,” Kooris said. Soft costs in construction typically include architectural and engineering fees, permitting and legal expenses and other costs not directly associated with physical work.

Sen. Henri Martin, R-Bristol, a member of the commission, asked Thursday how the authority could have offered an incomplete estimate.

“I can’t answer that question,” Kooris said. “I was not the chair of the board at that time.”

Scott Bates, who led the authority in May 2019, could not be reached for comment Thursday.

Bates resigned in June and Lamont appointed Kooris in July 2019.

State auditors reported that fall that the Port Authority spent thousands of dollars in the 2017-18 and 2018-19 fiscal years on expensive meals and liquor, incurred excessive legal fees and generally acted without clear policies governing purchases, personnel matters and ethics.

But unlike other controversies surrounding the port authority, issues surrounding the pier development’s oft-swelling price tag have not gone away.

The cost estimate rose to $157 million in 2020 after a heavy lifting area had to be relocated to avoid interfering with the Cross Sound Ferry.

By early 2022, projected costs hit $230 million as contracting bids far exceeded engineering price projections. 

The $20 million added to the project on Thursday, Kooris said, is needed to cover additional permitting costs and accelerate planned dredging of the Thames River, which will begin later this year to be completed by late February. Struggles with federal and state environmental regulators created a seven-month delay in getting necessary permits to dispose of dredged materials, he said.

“This is the final tranche of funding,” Kooris told the commission. 

Rep. Holly Cheeseman, R-East Lyme, had heard that before.

“And so I can accept, on the lives of those near and dear to you, that we won’t be hearing another request for additional funds?” she quipped.

“My daughters will probably not be too happy with me using their names,” Kooris responded, “but — yes.”

Lamont, whose office also had announced the $93 million price tag in May 2019, on Thursday said “I’m mad as hell” at the swelling cost projections.

“But I do think about … what this could mean for this first round of wind power — and the next five rounds to come after it — and the possibility that southeast Connecticut can be a major hub for what we think will be an important new industry going forward.”

When the total cost was $93 million, expectations were that the state’s share would be about $36 million, with the remaining $57.5 million provided by Eversource and Ørsted North America, which are developing the wind farm. The public-private partnership selected Gateway Terminal to oversee pier development.

But as the price tag has risen, the state has become the primary payer. Connecticut’s share now stands at $178 million, with $77.5 million coming from private partners — a 70-30 split.

The bond commission voted 6-2 to approve the additional $20 million allocation for the port project, with Cheeseman and Martin, the lone Republicans on the panel, voting no.

Cheeseman, whose district is located in southeastern Connecticut, said developing a new energy source could be vital for the region.

But Connecticut already carries one of the highest levels of bonded and pension debt per capita of any state in the nation, and it cannot keep adding millions of dollars to its credit card, only to learn later that key information was absent from the start, she said.

“I think that’s extremely significant and underlines the fact that we need aggressive monitoring of what goes on in our quasi-public authorities,” she said.

The State Contracting Standards Board has tried since 2019 to investigate port authority contracts but has been hampered by a lack of staff.

Lamont blocked efforts last year to provide the contracting watchdog with $450,000 to hire five investigative staffers. He argued the board provides services that are duplicated by other state agencies — though no other watchdog office is empowered to suspend a contracting process that does not follow state rules.

But the governor, who is seeking reelection this fall, reversed himself in May, signing a new state budget that provides funding for the five positions.

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