Status of the Great Plains Coal Gasification Project

In its third report on the loan guarantee for an alternative fuels demonstration project awarded to the Great Plains Gasification Associates, GAO reviewed project spending and construction schedules, aspects of the project administrator's management and oversight, and Department of Energy (DOE) project monitoring.

GAO found that, as of December 31, 1982, the gasification plant construction was about 4 weeks behind schedule and coal mine development was almost on schedule. However, it was not believed that the schedule slippages would adversely affect the planned startup date. Pipeline construction was on schedule with an expected start date of April 1983. Great Plains estimated that the total cost of the project would be $2.76 billion. However, the schedule slippages, lower than anticipated inflation rates and subcontractor costs, and higher than expected labor productivity caused a lower spending rate to date than anticipated. The GAO review showed that the Great Plains project management, including a computerized management information system, various audit activities, and onsite management of the gasification plant construction were satisfactory. In addition, GAO found that DOE was fulfilling its responsibilities to oversee the Great Plains loan guarantee and disseminate project information. As of December 31, 1982, DOE had not completed an audit of incurred costs; however, such an audit was underway. DOE cannot release material which it considers to be proprietary; therefore, only limited information on the project has been made available. However, DOE plans to make nonproprietary information more available to the public.