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The EPA OIG Identifies Multiple Factors Contributed to the Delay in Constructing CSO Tanks at the Gowanus Canal Superfund Site in NYC

For Immediate Release / March 21, 2024

WASHINGTON – The U.S. Environmental Protection Agency Office of Inspector General today issued a report identifying multiple factors that led to a substantial cost increase and scheduling overruns in the construction of combined sewer overflow, known as CSO, tanks at New York City’s Gowanus Canal Superfund site. As of this audit, the project cost is estimated to be more than $1 billion, which is over 1,300 percent more than the original estimate of $78 million. In addition, the project is more than six and a half years behind its original schedule and, based on data provided during the audit, additional delays are possible.

The Agency first issued its Record of Decision in 2013, requiring the city to build two CSO tanks to prevent compromise of areas of the canal that were being cleaned. Disagreements between the EPA and New York City on important aspects of the Record of Decision has since led to substantial delays and significant cost increases.

We found that the Agency could have been more aggressive in enforcing the Record of Decision and related administrative orders. Although it was apparent in 2016 that the city was noncompliant with the Gowanus Canal ROD and a 2014 administrative order, the EPA issued a new administrative order rather than penalizing the city. It was not until the 2021 administrative order that Region 2 cited New York City for noncompliance and required the city to construct the CSO tanks by specific dates. We also found that New York City’s acquisition of private property to build the tanks, EPA-required historical building material salvage efforts, and other factors have substantially increased project costs. The 2021 administrative order, at about $1.1 billion, has become the largest dollar-value Superfund unilateral administrative order in the EPA’s history. It is estimated that further delays in construction efforts could increase costs by tens of millions of dollars more. 

“Substantial delays and significant cost increases are unacceptable for the residents living near the Gowanus Canal and for the taxpayers who must pay for the increasing costs,” said Inspector General Sean W. O’Donnell. “The EPA needs to strengthen its enforcement and actively supervise construction efforts to ensure this project is completed without further financial losses or environmental contamination.”

This audit was initiated in response to citizen contacts with the OIG Hotline, which generally alleged that New York City has failed to construct the tanks in a timely manner and that EPA Region 2 has failed to enforce administrative orders pertaining to the Gowanus Canal Superfund site. If you are aware of potential fraud, waste, or abuse related to an environmental project such as the Gowanus Canal Superfund site, you can contact the EPA OIG Hotline through our website, EPAOIG.gov, or by phone, (888) 546-8740. Our website also includes important information about whistleblower reporting, rights, and protections. 

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About the EPA OIG

The OIG is an independent office within the EPA that performs audits, evaluations, and investigations of the EPA and the U.S. Chemical Safety and Hazard Investigation Board. For more information, visit our website and follow the OIG on X, LinkedIn, and Instagram. Anyone with knowledge of potential waste, fraud, and abuse relating to EPA operations and programs is encouraged to report it to the OIG Hotline at (888) 546-8740 or OIG.Hotline@epa.gov.