GAO reports New Orleans VA project 59 percent over budget - FOX 8 WVUE New Orleans News, Weather, Sports

GAO reports New Orleans VA project 59 percent over budget

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New Orleans, La. -

A new report from the Government Accountability Office details massive cost overruns with the new Veterans Administration hospital, even as it changes the face of New Orleans's Mid-City. The report blames unforeseen delays, and a decision not to share key facilities with the University Medical Center next door.

The Mid-City makeover is going into overdrive. The people who run American Thrift on Canal Street say the benefits of the massive project to build the new VA and University hospitals across the street are already being felt throughout the neighborhood.

"People are buying those houses behind me and they're fixing them up to get them ready for the nurses and whoever else will live there," said Gene Calcaterra with American Thrift.

But at what cost?

The new VA Hospital project hasn't been cheap. Originally projected to cost $625 million, a new report from the GAO shows that costs have exceeded original estimates by $370 million of your tax dollars -- that's 59 percent over budget.

Part of the problem is that the VA decided against sharing services with University Medical Center, as first proposed six years ago. Unanticipated events, such as the relocation of historic homes, also caused expensive delays.

The GAO report also blames the VA itself for expensive delays, saying it took six months to process change order.

New Orleans isn't alone in experiencing VA hospital cost overruns, approaching $1.5 billion dollars nationwide. Similar problems have occurred in Orlando, Denver, and Las Vegas. In fact, cost overruns of 59 percent here pale in comparison to the hefty 144-percent cost increases experienced in Denver and Orlando.

In spite of the extra costs, Calcaterra believes it's worth it. "We're eager to move forward," he says," and the company is looking forward to making friends with all the people moving into the neighborhood."

Timewise, the project has been pushed back 16 months.  The VA hospital in New Orleans was originally projected to be finished by December 2014. That completion date has now been pushed back to February 2016.

VA officials were not available for comment on the GAO report.

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