Case Study: Cost Overrun from Environmental Mitigation on Portland Light Rail Expansion (Portland, OR, 2017)

Project Overview
• Name: Portland Light Rail Expansion – South Corridor
• Location: Portland, Oregon
• Year: 2017
• Project Size: $450 million
• Scope: Construction of new light rail tracks, stations, and supporting infrastructure through environmentally sensitive areas
• Lead Agencies/Contractors:

Category of the Issue, Problem, or Challenge
• Environmental Compliance
• Cost Management

Summary of the Issue, Problem, or Challenge
Unanticipated environmental mitigation requirements discovered mid-construction increased project costs substantially.

Root Cause Analysis

• Incomplete Environmental Assessments: Initial environmental impact studies missed critical species habitats.
• Regulatory Revisions: New mitigation requirements issued during construction.
• Scope Expansion: Added construction of wildlife crossings and habitat restoration areas.
• Delayed Approvals: Permitting delays caused schedule impacts and cost increases.

Impacts Due to the Issue, Problem, or Challenge

• Cost overruns estimated at 14%.
• Schedule extended by six months.
• Increased project complexity and stakeholder scrutiny.

Corrective Actions Taken

1. Enhanced environmental survey procedures early in project planning.
2. Established dedicated environmental compliance teams.
3. Improved coordination with regulatory agencies to anticipate changes.
4. Included environmental contingencies in project budgets.

Lessons Learned

• Thorough environmental assessments are critical before construction.
• Regulatory environments can change and impact cost/schedule.
• Early, ongoing agency coordination reduces surprises.

Audit & Prevention: Project Control Questions to Ask on Future Projects to Help Control the Situation

• Are environmental surveys comprehensive and current?
• Is there active engagement with regulators during construction?
• Are contingency funds allocated for environmental risks?