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<br />~3fL9f~~M4 l~:~~ (~~4~~~~~4 <br />~~/~~/~UU4 L~:U~ ~AA ZUX 224 5429 <br /> <br />.-AX <br />INDIAN AFFAIRS <br /> <br />l"'"HI:1C. tJ~/.L.L <br />141004 <br /> <br />001120 <br /> <br />HEARING ON A-LP COST OVERRUNS, April 24. 2004: TESTIMONY of the CITIZENS <br />PROGRESSIVE ALLIANCE. before the SENATE APPROPRIATIONS COMMITTEE, <br />SUBCOMMITTEE ON ENERGY AND WATER DEVEI.OPMENT <br /> <br />. Thank you for the opportunity 10 provide testimony on the AnImas-la Plata project cost overruns, <br />We. wUl supplement thelie remarKs with more detailed Informallon In the coming weeks. <br /> <br />The reCent disclosure that the Animas-la Plata Project is already $150,000,000 over the original <br /><:ost estimatas Is not the real news. The real n_1s that the BOR kneW the li'Slimates 10 be <br />bogus back i1'119991oW1en they su.bmllled them to Congress. Indeed, these cost estimates were <br />commissioned not by the BOR, but, In a callous and c:alro/ated mlsUse of the indian self. <br />De1ermlnallon Act, by the Ute tribeS", the project's primary contractors and chief benefic:laries. <br /> <br />Mofeover, as Internal document& show, these estimates underwent IlllIe or no govemmental <br />revIew, and were actually devold of cost estimatas for whole portions of the projeCt. Some <br />suspect these rascally "aecounllng BlTors.1D be deliberate ao eS to convtnce the Congress and <br />the public that the project really had been downsized, both iI1 cost and size. ActuallY. Ille public <br />costs of tile project are much greater than have ever yet been reported, and the project has not <br />really been downal%edd~~ tt:Je PR to the conlrar;'. . <br /> <br />Arst the costs: The BOR's polley has been 10 tailor the truth about the projecrs ovelall costs by <br />focUsing only on the constructlon costs, WhUe lo1ally Ignoring all other cosls, past and fUture. We <br />ask that there be a truB I!IccounUng. If done honestly. both the Congress and the public wDl be <br />agog at the outcome. Here are a few of the hidden costs that need to be accounted for: <br /> <br />1. The Interest on the public deblthat the project will burden us wlth over the 100 year life of the <br />project needs 10 be calculated and added lIS a project cost. The Interest component alOne wJ1l <br />add billions of dollan; 10 the true cost of this project. The taxpayers also have to repay all but a <br />silver of project construction costs. And those costs, 100, for reasons outlined below. will reach <br />well Into the billions When all Is said and done. <br /> <br />.,,"' <br /> <br />2. The construction cost estimates 'need 10 include estimated cost Increases from lnfIatiCln. WI!h <br />a modest 3 percent rate of inflation over a 15 to 2() years CQr1S1rUCllon phase present costs <br />estimates might lnc:r_e by 50 percent from Inflation. . <br /> <br />3. :The estimated costs should be calculated based on a range from 'hlgh 10 low. Presently, the <br />BOR prefers to give only a low-range cost estimate, They persist In the fancfful notion that their <br />forecasting is preclse and unsusceptl1:lle to unknowns and human error. Yet, the last three major <br />1l0R construction projects. !he Dallas Creek end Dolores ProJact&, bOll> In Colorado, and the <br />Cl!ntral ArIzona Project have all been alleast300 pe;eerlt CNer origlnal cost estimates. Recently, <br />the project construction engineer admitted ALP was one of the most complicated projects ever. <br />Cost sensitivity analysis Is a must If we are 10 have any confidence In BOR cost projections, even <br />thqse they admit to. <br /> <br />4. 'Adding to our concem over the final price tag is the fact that, while $100'5 of rnlHions In federal <br />tax dollars have already been spent on tills project, ALP construction Is only 3 to 4 percent <br />completed according to a recent admission by the project construction engineer. Even If the <br />project were to expertence annual cost OVelTUns of 10 peroent annually, rather than last year's 50 <br />percen1 Jump, we are looking at well over another 1 00 percent increase In public costs, assuming <br />a 1510 20 wars construction Dertod. . <br />_Tn. 60ulhem Ute and lJle IoIOlIntaIn UIlo lrIbeS ;nth. c:hIefbeneficlaJfeeofMl', """,Mng the/iOn" 51>_0' <br />projeCt __ free of _~ Those two small but very wosll!1y IilbOS I1aYII . a:mblnOll populatIOn of 'lboUt 3000 people. <br />.....1Ing man, ""man and child. Nwl dasplle clafms rrade by:some In SLCtPOrt rJf building AlP, these tribes - net <br />w'1ihotl._. Inlaol.lheyalnlady ccnlrolllbcut '5O,ooo....._or_, mDStclttdeWlcp8dwllh-I......."... <br />ThIs ccnstIluteo 1i !he _lei' Il1e .....'" ."'Ie or_Is entllled III under tI>e Colorado RiVer Ccrnpact. Appto>dJnalely <br />..000.000 peopI8 """ In -... <br />