Mass. Settles With Big Dig Contractor For $21M

One of the Big Dig's largest contractors, Modern Continental Construction Inc., has reached a settlement with the state that includes $21 million related to a fatal tunnel ceiling collapse, and also ends contract disputes relating to leaks in the massive highway project, the state Attorney General's Office announced Friday.

The agreement means the company will not perform any more work on the $15 billion Big Dig, the most expensive highway project in U.S. history. The project, which replaced an elevated highway in the heart of Boston with a series of tunnels, ramps and bridges, has been plagued by cost overruns, leaks, falling debris, and other problems linked to faulty construction. Under the deal, about $2 million in performance bonds on Modern's contracts will be extended for six years to cover any undiscovered defects in its work.

Modern Continental has filed for bankruptcy, so the agreement must be approved by a bankruptcy court.

Attorney General Martha Coakley said the settlement "marks another step" toward settling the outstanding claims related to Big Dig tunnel problems, and will save the state hundreds of thousands of dollars in litigation costs.

"We hope that the bankruptcy court views this as a fair and reasonable resolution," Coakley said in a statement.

Massachusetts Turnpike Authority Executive Director Alan LeBovidge said he was "happy" the case with Modern Continental Construction was over.

"We settled within the parameters that we wanted to settle it," he said.

Modern Continental said it was pleased to settle all civil claims stemming from its work on the Big Dig.

"Modern is pleased to have reached this global settlement which avoids the prospect of years of protracted litigation, and believes it to be in the best interests of all of the parties," including Massachusetts residents, the company said in a statement.

Milena Del Valle, 39, of Boston, was killed in July 2006 when 26 tons of ceiling panels collapsed on the car she was riding in with her husband to Logan International Airport.

The National Transportation Safety Board said in a 2007 report that the wrong type of epoxy was used. The report spread blame among Bechtel/Parsons Brinckerhoff, Modern Continental, designer Gannett Fleming and Powers Fasteners, the firm that supplied the epoxy.

In June, federal prosecutors charged Modern Continental with lying about the quality of its work on two areas of the tunnel system, including the section of ceiling that collapsed. The U.S. Attorney's Office in Boston accused the company of knowingly using the wrong epoxy to hold up concrete anchors that failed in the ceiling collapse.

Modern Continental called the charges "completely unfounded and without merit." The company said the charges were "an attempt after the fact to criminalize actions" that were approved by state officials.

Also Friday, the state announced that the firm that purchased the epoxy that failed in the tunnel ceiling collapse has agreed to pay $5 million in damages. Newman Associates Inc. bought the epoxy from Power Fasteners Inc. and sold it to Modern Continental.

A call seeking comment from Newman Associates was not immediately returned.

Bechtel/Parsons Brinckerhoff, the Big Dig project manager, and 24 small design companies agreed to a settlement with the state of about $458 million in January.