The Los Angeles Metropolitan Transportation Authority (Metro) has paid US$ 300 million to settle its protracted dispute with contractor Kiewit.
Kiewit was seeking US$ 518 million in a combination of extra charges and compensation, following its work on upgrading a section of Interstate 405.
The firm claimed Metro had been in breach of its contract, when it failed to warn it about nine miles of underground utility lines – as well as a drainage culvert – that had to be protected during the construction process.
It further claimed Metro had made repeated changes to the design of the project, after construction work had begun, creating “staggering” expenses.
To fulfil its contract, Omaha-based Kiewit was forced to double the workforce on the project – which has now risen to around US$ 1.6 billion.
After both parties submitted their dispute to arbitration, Metro agreed to the settlement of US$ 300 million.
Metro’s chairman, John Fasana, said, “Metro could have continued to negotiate the settlement but we had some culpability, and it was time to move forward.”