Austin, Texas — The Central Texas Regional Mobility Authority (Mobility Authority) reached a settlement agreement with the MoPac Improvement Project contractor, CH2M. The two parties had been engaged in dispute resolution talks aimed at settling various legal claims connected to the project’s extended delays.
At a September 26 special-called meeting of the Mobility Authority’s Board of Directors, the agency’s Deputy Executive Director, Jeff Dailey, announced that the Mobility Authority has agreed to pay $21.5 million to CH2M to put an end to claim disputes and expedite completion of the remainder of the project.
“The Mobility Authority’s top priority is opening the full project as soon as possible and we’re confident this course of action will help achieve that goal,” said Dailey. “We believe the MoPac Improvement Project is an investment that will benefit Central Texans for decades to come, and that is a win for the community.”
Of the $113 million that CH2M asserts it is owed, the Mobility Authority will pay $21.5 million. “This settlement ensures that all future claims are off the table, avoiding a lengthy and costly court process.” Dailey said.
“Negotiations have been a process balancing the specific contractual language in the design-build contract with what we as the owner believe to be reasonable.” Dailey said. “Our position has been, and remains, that many of the delays associated with this project should have been anticipated by the contractor,” said Dailey. “However, we recognize that a number of factors played a role in the project delays, some outside the control of the contractor. We made the decision not to default CH2M in fall 2015 because of the potential for even greater project delays in the long-term while we went through legal proceedings and procured a new contractor. Such a scenario would have caused even greater disruption to the public. Instead, we have worked collaboratively with CH2M with the shared goal of completing the project as quickly as possible.”
The settlement payments are contingent upon CH2M meeting a new set of project milestones, and avoids continued lawsuits for years to come. By accepting the settlement, CH2M has agreed to deliver the full project, including the southbound Express Lane, by October 27. If project delivery does not occur by that date, CH2M loses $50,000-$100,000 per day for each day the project is late.
The public should note that the settlement agreement will not impact toll rates. The variable toll rate will be assessed as it was always intended, based on supply and demand principles, increasing the rate when traffic is heavy, and decreasing when traffic is light to ensure the lane does not exceed its intended capacity. Variable tolling as a congestion management tool ensures that traffic remains free-flowing, offering commuters a reliable alternative.