The State Pier infrastructure improvement project is slowly inching toward its conclusion. The conclusion date, which one year ago was set for March or April of this year, has been pushed back again, this time to January 2024. As of this writing, the State Pier sits at just over 90% completed.

It has been a long and difficult road for the pier, which was first announced more than four years ago in May 2019. A massive undertaking when it began, the attempt to capitalize on a growing interest in clean energy production has only ballooned in the years since. Now, Connecticut Inside Investigator (CII) has obtained thousands of documents that are shedding light on the struggles to complete the project and the rising costs at the center of its controversy.

The goal of the project was simple but difficult: build out the pier structures on the New London shoreline, converting them to a single heavy lift capacity structure. This would then be used over its first 10-20 years as a staging ground for offshore wind farms. Portions of the massive wind turbines would be shipped to the facility, assembled on-site, and shipped out once more to their permanent home off the coast of Rhode Island.

The project was backed not just by state lawmakers and the Connecticut Port Authority (CPA) but also by a newly formed partnership between New England energy giant Eversource and its Danish counterpart Ørsted. The companies had created a new company, New England Offshore, to represent their interests and had committed to renting the pier for the next decade or more following its completion as they moved into the New England offshore wind market. They had even committed to fund a third of the project’s costs.

Things looked to be going smoothly as Connecticut lawmakers quickly passed legislation that would allow the state to draw 30% of its energy needs from future offshore wind projects. Over the following months and years, however, the project and its managers would encounter a series of roadblocks and scandals that thrust the project further into the public eye and left it open to intense and ongoing scrutiny from the public, the media, and local lawmakers – all while costs continued to rise.

In July 2019, just two months after the project’s announcement, separate scandals forced the Port Authority’s Executive Director and Board Chair to resign from their posts. The Lamont administration committed to overseeing the ongoing pier negotiations themselves. Governor Lamont then placed Office of Policy Management (OPM) Secretary Kosta Diamantis in charge of overseeing the project. 

Diamantis resigned in October of 2021 after a scandal involving his daughter’s hiring at the State’s Attorney’s office. A subpoena issued at the time requested documents regarding the State Pier but the case has, so far, not been the direct cause of delays in the pier’s construction.

These scandals occurred as the project cost increased from an initial projection of $93 million to $157 million and then again to $255 million. The total cost now sits at an estimated $303 million. Those dramatic increases, coupled with what many of the project’s critics see as insufficient explanation, have led some to believe the project is awash with corruption.

On May 5^th of 2019, Governor Ned Lamont held a press conference to announce the State Pier expansion project. At the time, he stated the projected costs were $93 million, of which Northeast Offshore had agreed to pay $35 million. 

Settling on, and publicizing, any hard costs this early may have been the first misstep in the project. The first binding contract of the effort wasn’t signed until February of the following year which then put numbers on the record. The agreement was signed between the Port Authority, Northeast Offshore, and Gateway Terminals, who had been designated as the terminal operator. 

This Harbor Development Agreement (HDA) did two major things: First, it set the updated project costs at $157 million. Second, it increased the amount of investment from Northeast Offshore to $70 million, of which $20 million would come from annual rent payments over the first decade of operation. Perhaps the most consequential section, however, committed the Port Authority, through state-supplied, and thus taxpayer-backed, funding, to cover any additional cost increases.

In a Port Authority board meeting in 2022, Board Chair David Kooris explained this first major increase resulted from a change in the project scope, which now required additional demolition. Documents from the Port Authority back up those claims, with one particular fact standing out. None of the stakeholders, at the time of the HDA, really knew what the final costs would be because the design was incomplete. 

The $157 million HDA number was the result of estimates at a 60% design stage and was subject to change as the designs went through further planning and construction estimations.

Still, Kosta Diamantis, at a press conference announcing the HDA, said to the press that “there are no overruns on this project.”

But even on that day, February 11^th, 2020, stakeholders knew that the budget was likely to exceed that $157 million budget. A document prepared by Eversource and Ørsted outlined some of the areas of this initial cost overrun, showing that estimates at that stage put expected actual costs at $211 million. Most of this increase was due to markup costs, additional costs as the subcontractors submit their bids along with any markup that provides them with a profit. Additional expenses came from a $20 million increase in contingency. Another $6 million was the result of an increase in soft costs, partially for environmental mitigation, but largely as a result of a $4 million increase in Construction Administrator fees, paid to AECOM.

The Eversource/Ørsted document does make a case for lowering those expected costs, largely by negotiating those markup amounts back down to the original estimates. That, however, doesn’t seem to have turned out as they hoped. Of nine items marked for renegotiation, only two were ultimately agreed upon for a decrease of just $875,000, according to an October 2020 memo.

It took another year for the next major cost increase to come to public attention. Between April and June of 2021, the Port Authority and Kiewit, the construction manager for the State Pier, made final decisions on subcontracts. Over those two months, they awarded dozens of bid packages and released an updated budget of $235.5 million, an increase of another $79 million from the HDA.

At the same 2022 CPA board meeting, Kooris claimed that those increases were due to “estimates meeting reality” and that actual numbers wound up much higher when they brought the subcontracts from their initial estimations to actual bids accepted for the project. Among those accepted bids were several awarded to Kiewit, the Construction Manager, totaling around $87 million. The Port Authority maintains that those bids were the right choice. A state audit, meanwhile, has flagged the process as potentially unfair.

Documents from the Port Authority, however, show that those bid amounts were in line with updated budget estimates provided by Kiewit once the project reached the 90% design stage. This breakdown was much more comprehensive than previous documents made available to CII and included an itemized list of every subcontract project.

The final estimated total on that report: $248 million in December 2020.

Kooris also explained the increase as a result of additional soft costs.

This, once again, was not the end of the cost increases for the project. Once construction began in earnest in mid-June of 2021, the CPA and its partners were forced to deal with cost increases as a result of construction issues and roadblocks. And these were not infrequent.

Estimates for the full scope of the project were made with only a theoretical understanding of what crews might encounter once they actually began dredging the area between the existing ports to build the heavy lift platform. In a Guaranteed Maximum Price (GMP) update from January 2022, a column devoted to Change Orders showed a total increased cost due to construction changes of $12.8 million. The total cost at this point was listed at $259.9 million.

Cost increases have only continued since early 2022, which is as recent as the documentation provided to CII goes. These documents were obtained as the result of a Freedom of Information (FOI) request submitted to the Port Authority in April of 2022. The full cache took 14 months to arrive and contained more than 6,500 documents, emails, and spreadsheets spanning years up to the date of request. CII is happy to provide these documents to interested parties upon request. Since April of last year, the Port Authority’s leaders have gone back to state lawmakers to request further funding and have received some harsh pushback from members of the State Bond Commission.

The latest round of funding came just this summer, in June 2023, as the Bond Commission approved an additional $30 million bond intended to help get the project over the finish line. This new round of funding came a year after the previous request, at which time Kooris had assured the group that it would be the last time.

Once again, at the June meeting, Kooris stated that they were confident in their ability to bring the project to its conclusion with this new round of funding and that he did not foresee returning to request more. This round, he said, was a result of crews discovering deep obstructions and struggling to dig them out, dig through them, or attach moorings.

Kooris also noted that the Port Authority had returned to their private partners and secured an additional $23.5 million from Northeast Offshore to help offset those increased costs. Some state Representatives, however, were not assuaged.

“I think this project has been pretty much a disaster from the very beginning,” said State Sen. Henri Martin (R-Bristol)

“I would be less frustrated if I had not sat at this commission and heard, time after time, I believe three or four requests for additional funding,” said Rep. Holly Cheeseman (R-East Lyme). “I wish someone had had the honesty to admit that we as a state have never tackled a project this large, this is our best estimate.”

Ultimately, Cheeseman’s assessment might be the most apt, as the documents reviewed by CII and statements made in the past by Port Authority leadership indicate that much of the cost overruns were a result of a severe underestimation of actual project costs. The public frustration, meanwhile, is likely the result of a lack of perceived transparency and a confusing, ever-changing burden on Connecticut taxpayers.

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