LOS ANGELES : Big 6 Accounting Firm Hired as Subway Adviser

At Mayor Richard Riordan’s urging, transit officials Wednesday hired a firm that worked on the English Channel tunnel to serve as an adviser on the troubled Los Angeles subway project.

A Metropolitan Transportation Authority panel voted to pay up to $500,000 to the Big 6 accounting firm of Arthur Andersen & Co., even though two other companies had offered to do the work for less than $483,000. One firm submitted a low bid of $298,000.

An aide to Riordan said the mayor favored Arthur Andersen because he wanted a firm that had no prior business with the MTA and “therefore, no vested interest.” The contract was approved unanimously by a five-member committee of the transit authority board.

The action was the latest response by the local transit officials to the Federal Transit Administration’s decision Oct. 5 to freeze $1.6 billion in subway funding until the MTA shows it can competently manage the project. Tunneling in Hollywood has been shut down since Aug. 18 because of ground sinkage of up to 10 inches.

The transit agency recently approved a reorganization plan for its rail construction program and is expected to receive federal permission--possibly as early as today--to resume tunneling in early December.