LAND-ACQUISITION COSTS

Mr. GORE. The first thing that struck me was that-and perhaps it is a natural consequence of being able to understand that item better than some of the more scientific ones-was the uppage of the estimate for land acquisition from $5 million to $17 million.

Mr. PHILLIPS. That is what I was just noting also, Mr. Chairman. Mr. GORE. That is missing the mark rather successfully, is it not? Mr. DEAN. Mr. Cook will speak to that.

Mr. Cook. The original land acquisition estimate was based on 150,000 acres at $25 an acre.

Mr. GORE. I understand. I remember that I said at the time that you could not buy land at $25 an acre. Who gave you that estimate of $25?

Mr. Cook. The estimate of $25 was prior to any knowledge of where the site would be located, with the thought that we might be able to obtain some marginal land for the site, which would include the cost of structures-the estimate represents past experience in land acquisition.

Mr. GORE. Have you tried condemnation?

Mr. Cook. So far we have not had to resort to too much condemnation. We have had some condemnation. Most of the land acquisition has been a result of agreed price.

Mr. GORE. This amount of money would indicate that you had been rather agreeable.

Mr. BOYER. The Army engineers acquired the land; we asked them to acquire the land for us, Mr. Chairman.

Mr. GORE. And you furnish the money?

Mr. BOYER. We furnish the money.

Mr. GORE. That would make it even more agreeable.

Mr. PHILLIPS. May I ask, Mr. Gore, if the figure of $17 million is the price, or is it still an estimate for which the price has not been paid?

Mr. Cook. It is still an estimate, based upon the experience that we have had to date.

The procurement of land, land acquisition, is done through the real estate branch of the Corps of Engineers, who have had many years of experience. Recently in a condemnation proceeding the court awarded $10 an acre over what was thought to be a fair appraisal, and I am quite sure that all the procurement to date has been on the basis

Mr. GORE. You think this is a firm estimate?

Mr. Cook. It is an estimate that is based on experience and should be a fairly reliable estimate.

Mr. THOMAS. Bearing in mind the Corps of Engineers did not make the estimate, your error is just a matter of an error of 350 percent. Mr. Cook. I did not mean to convey the idea that the original estimate was made by the Corps of Engineers; it was made by the AEC.

DEVELOPMENTS AT THE SAVANNAH SITE

Mr. GORE. As I recall, we were told, either by Mr. Dean or Mr. Boyer, that there would be no elaborate developments of the site, the community facilities, dog-and-cat sanitarium, and that sort of liability you had at other places, and yet when I read here, I find community facilities-maybe I am using the wrong term-but when I

read here of developments on the site, and I will leave them off the record, since they are in the secret justifications, although I see no reason why they should be classified information.

(Off-the-record discussion.)

Mr. GORE. Well, since you say there is no classified information on page 23, we will put that page in the record.

Mr. DEAN. Some of the items in developing the document were not classified.

(The matter referred to is as follows:)

2-261-1020

General site development facilities. -

$112, 950, 600

All site facilities outside of the specific manufacturing areas are included in general site development. A substantial portion of the estimated cost of this project is required for the construction of river water pumping stations and distribution systems.

* * *

Included in this project are a local radio system, locomotive shop, locomotives and rolling stock, mobile equipment, guard towers, monitoring buildings, gate houses, general grading, laboratory, general equipment, and more than 100 miles of perimeter fence. There are approximately 4 miles of process sewers which lie outside the manufacturing areas. Existing small streams will be used to return cooling water to the river. Considerable erosion protection will be required since these streams will be transformed into small rivers. Fifty miles of new railroad outside the processing areas and the relocation of 8 miles of an existing commercial railroad line are required. Existing roads will be used to the greatest extent feasible; however, more than 100 miles of new roads, 15 miles of which will be a dual highway to provide adequate and safe access to the plant areas for at least 36,000 workers.

Transmission of electric power between the areas will require transmission lines, some of which must necessarily be underground.

LOCOMOTIVE SHOP

Mr. GORE. Why do you need a locomotive shop on this site? Mr. Cook. The area is 20 miles in diameter-the major producing areas, several miles apart.

Mr. GORE. That is secret in another part of your justification.. Do you want that to go in?

Mr. DEAN. We will say widely separated.

Mr. Cook. The major producing areas are widely separated. There are approximately 50 miles of railroad track outside the major manufacturing area, as well as tracks inside the manufacturing area.. The railway company delivers the material to the classification yards on the area.

At the present time the construction contractor, and later the operating contractor will shift the material for the area over the railroad connection, to the major producing areas, and for that reason we do need railroad stock, rolling stock, and we do need locomotives,. and we do need cars.

Mr. GORE. You would have a locomotive crew standing by at all locomotive sheds, or shops, waiting for something to get wrong. I presume you will buy the locomotive new?

Mr. Cook. At the present time, as-a good example, some 5,800 carloads of material were received during the month of AugustMr. GORE. That is construction material?

Mr. Cook. That is right.

Mr. GORE. Is that locomotive shop for construction purposes or is it for permanent operation?

Mr. Cook. This locomotive shop indicated here is for the permanent operation.

Mr. GORE. You cited delivery of so many tons of cars of construction material, which would have no bearing whatsoever on the justification for this as a permanent installation.

Mr. Cook. I did not intend to indicate it would.

Mr. GORE. Then why did you mention it?

Mr. Cook. The railway track, between the major producing areas, is one that will be in continuous use.

Mr. GORE. Fifty miles

Mr. YATES. Widely separated.

Mr. Cook. The 50 miles of track there takes in the distances between the major producing areas and other areas, of approximately 7 to 8 miles apart.

Mr. GORE. Have you explored the possibility of contracting with the carriers to deliver your rolling stock within the area?

Mr. Cook. In all our installations the carriers deliver the material to the classification yard or siding. The operation of the transportation system inside the Government-owned area is conducted generally under contract with the railroad companies, or by direct operation by the prime contractor.

Mr. GORE. It would seem to me you should explore the possibility of making a contract with carriers to deliver this material. You have not?

Mr. Cook. Not in this particular instance, no.

Mr. GORE. Why would you ask for a locomotive shop before you have done that?

Mr. Cook. Regardless of how it is done, past experience indicates that we will have to have these facilities for the operation of the track within the area.

Mr. GORE. You would have to have a locomotive shop. How many locomotives will you have to have?

Mr. BOYER. Eight.

Mr. Cook. We will have to have a locomotive shop for repair and maintenance, for rolling stock, which includes a number of locomotives. Mr. GORE. How many employees would you have in the locomotive shop?

1

Mr. Cook. I do not have that broken down. I have it broken down by major items.

Mr. GORE. Do you know whether the railroads in that vicinity have a locomotive shop nearby which could make whatever repairs are necessary to your locomotives?

Mr. NELSON. The nearest shop is at Augusta.

Mr. GORE. How far away?

Mr. NELSON. About 15 miles.

Mr. GORE. It appears to me that if there is a locomotive shop within 15 miles, the taxpayers of the country would be given a treat if you contracted with this shop to do your repairs, rather than having a full crew standing by doing nothing more, perhaps, than drawing time-and-a-half wages.

Mr. Cook. They would work, generally speaking, to take care of operating maintenance on the locomotives; the major repairs are done under contract in the railroad repair shops. We do no major repairs. Mr. GORE. As manager of operations there, how many people do you think you would need in a maintenance shop?

Mr. NELSON. I should think about 25 to 30 people on a shift.
Mr. GORE. How many shifts would you need?

89877-51-2

Mr. NELSON. Generally one; maybe two occasionally. This is a guess; we have not got that actually in our plans.

Mr. GORE. Then, it would appear to me there would be a lot of repair and maintenance to 8 locomotives and 40 rolling stock

Mr. NELSON. I do not think it is too much for the amount of rolling stock to keep it rolling.

Mr. PHILLIPS. Does the testimony indicate how much stock they expect to have?

Mr. GORE. He just said eight locomotives.

Mr. Cook. Sixteen flatcars, five open cars, two gondolas

Mr. PHILLIPS. How many locomotives?

Mr. GORE. Eight. If the railroads of the country average three men for a shift for each locomotive I would be very much surprised. Mr. NELSON. This shop is a lot more than just a locomotive and repair shop. I might read what it does.

Mr. GORE. I will be glad to have you do so, otherwise we might draw the conclusion it is a rest camp.

Mr. NELSON. It contains the office of the yardmaster, the base for signal communication, in addition to shop repairs.

Mr. GORE. Yet none of those people would be included in the 25 you estimate?

Mr. NELSON. They would.

Mr. GORE. Let us look at another item

Mr. THOMAS. Before you go into the detail, may I interrupt just a moment?

Mr. GORE. Certainly.

Mr. THOMAS. Do you make these estimates, Mr. Nelson?

Mr. NELSON. No. They were made by the contractor; I reviewed them.

BACKGROUND OF MANAGER, SAVANNAH RIVER OPERATIONS OFFICE (CURTIS A. NELSON)

Mr. THOMAS. This is the first time the committee has had the pleasure of having you with us. Tell us something about yourself; what has been your experience in the past, and so on?

Mr. NELSON. It has been construction

Mr. THOMAS. You have been handed so far a $1.1 billion project, starting off with $600 million. You may go on from there, and tell us something about yourself.

Mr. NELSON. I am a graduate of the University of Nebraska in civil engineering. After several years of experience I was put in charge of the Kankakee ordnance plant at Joliet, Ill.

Mr. THOMAS. When did you finish school?

Mr. NELSON. I finished school in 1934. After finishing school I went to the ordnance plant in Illinois, and after that to the Pine Bluff Arsenal at Pine Bluff, Ark.

Mr. THOMAS. Those were Army ordnance projects?

Mr. NELSON. Yes. The first was about $50 million, and the second $60 million.

Mr. THOMAS. You got out of school and went with the Government, or did you have any intervening experience?

Mr. NELSON. I did not cover the first few years, from 1934 to 1940. I was with the Army most of the time, mainly engaged in engineering and construction work.

Mr. THOMAS. In a civilian capacity?

Mr. NELSON. No, as an Army officer.

Mr. THOMAS. You must have had ROTC training?

Mr. NELSON. Yes, sir; I was an ROTC student.

Mr. THOMAS. You went into the Army as a second lieutenant?
Mr. NELSON. As a second lieutenant, yes.

From Pine Bluff, Ark., I went to the Manhattan District and handled construction work, for a part of the project known as the K-25 gaseous-diffusion plant, and later became director of personnel for General Grove and General Nichols, they having two separate offices.

Later I was appointed as liaison officer to Canada for the AEC; 3 years there, and then to this job.

Mr. THOMAS. Have you had any construction experience in private industry?

Mr. NELSON. No.

Mr. THOMAS. What are your duties at the Savannah plant?

Mr. NELSON. It is my responsibility to supervise the entire program. Mr. THOMAS. Do you make estimates?

Mr. NELSON. We make a check estimate against the contractor's estimate. We ask him to do the major part of the engineering estimating work.

Mr. THOMAS. Do you go into the details of the construction contract, or do you rely on the prime contractor to do that?

Mr. NELSON. No. All contractor's subcontracts are approved and reviewed by our office.

Mr. THOMAS. That is, under your supervision?

Mr. NELSON. Yes.

Mr. THOMAS. How many employees do you have?

Mr. NELSON. I presently have, over-all, 235 employees. This total includes the office at Wilmington, Dana, and the main office at Savannah River.

RESPONSIBILITY FOR MAKING COST ESTIMATES

Mr. THOMAS. Have you had cases where you disagreed with the contractor's estimate and the architect's plans and designs on any items that have been approved by the major contractor?

Mr. NELSON. We have some very thorough discussions and disagreements from day to day, but in reality I feel there is a healthy condition about our relationship.

Mr. THOMAS. Who has final authority? You or the prime contractor in the plans and design and cost estimates, in letting the

contract?

Mr. NELSON. I have, to the extent authority is delegated to me by the Commission.

Mr. THOMAS. Is that sufficient authority for you to overrule the prime contractor, or do you take the plans from him?

Mr. NELSON. Í find I have enough authority to overrule him as it becomes necessary.

Mr. THOMAS. Has it seemed necessary in any construction project, in the way of detail designs with reference to such items as the tower, control tower?

Mr. NELSON. Yes; on numerous occasions we have checked the designs; we go more into the processing base of the designs.