VTA General Manager Carolyn Gonot said Thursday that the agency is “evaluating all options” to advance the BART Silicon Valley Phase II project, including a possible phased approach to construction. “Our focus is on identifying a responsible and financially viable strategy … that allows us to move the project forward while remaining firmly committed to completing the entire extension,” Gonot said in a statement.

The six-mile, four-station extension broke ground in 2024 after decades of planning. When first estimated by VTA in 2014, the project was expected to cost about $4.7 billion and be finished by the end of this year. Costs have ballooned repeatedly since then, reaching the current $12.7 billion figure.

Tom Maguire, the VTA executive leading the project, told reporters this week that the updated estimate will be “significantly more” than $12.7 billion. Project managers are assembling a new total cost estimate, along with fresh schedule and risk evaluations, and expect to present findings to the VTA’s oversight committee in late December.

Officials cited a wide array of factors driving the increases, including sharp rises in diesel fuel costs tied to the U.S. war in Iran and knock-on effects on prices for other heavy construction materials.

For more than two years, VTA has targeted 2037 as the year trains would begin running. That schedule is now in question as the agency crafts a new “adaptive plan” for completing the project. Work on that plan could continue into 2027, Maguire said, and “all fiscally responsible options would be on the table.”

He pointed to other transit projects, including a connector near Seattle, that cut a station to save costs under similar budget pressure. But Maguire, Gonot and San José Mayor Matt Mahan, who chairs the oversight committee, appeared to support keeping all four stations in revised plans.

“I still believe that we should be committed to the full vision of the project,” Mahan said at the meeting. “But cost escalation is such that it does feel to me pretty clear at this point that we’re not going to be able to deliver the whole thing in one fell swoop.”

Mahan stressed that residents from Eastside San José to Santa Clara have a stake in the project and must have a chance to weigh in on any changes. “There are a lot of stakeholders out there … who have been following it, voted for it, voted to tax themselves,” he said.

The extension would tie into the existing Berryessa/North San José Station, which opened in 2020 along with the Milpitas station as BART’s first foray into Santa Clara County. New stations are planned for 28th Street/Little Portugal near East San José, downtown San José at First Street, Diridon Station near the SAP Center, and the current Santa Clara Caltrain station.

The project is designed around a planned five-mile, 53-foot-diameter single-bore tunnel, to be dug by a $76 million tunnel boring machine assembled in Germany and among the largest in the world. Significant construction is underway at the West Portal site on the San José-Santa Clara border, where crews are finishing the launch pit for the machine.

Tunneling, originally expected to begin by the end of this year, is now tentatively pushed to early 2028, Maguire told the committee. He expressed hope that faster tunneling timelines negotiated in a new pact with the agency’s main contractor will help recover some lost time.

Funding remains a major risk. The project relies on eight funding sources, including local and regional tax measures and federal and state funds. While the most recent estimate is $12.7 billion, VTA has secured roughly $12 billion, including a $5.1 billion federal pledge. The agency has been unable to close the remaining gap despite a series of cost-cutting steps.

Without a balanced budget, VTA cannot apply for the federal funds, which Maguire suggested might not happen for at least two more years. Part of the December evaluation and subsequent work will examine what can be built if federal money is delayed or lost altogether.

Mahan said the agency must get costs under control as it sets a new baseline to preserve public trust. “We can’t keep having the number grow at a dramatically faster rate than we estimate,” he said. “I understand you can’t predict the Iran War, but what else can we be doing so that as you re-baseline, we’re not in a position a year or two later to have a whole new number? Because it really erodes public trust and puts us in a very difficult position.”