Raleigh: State audit finds Blue Ridge Road underpass delayed to 2027, funding up 41%

The North Carolina Office of the State Auditor released a Rapid Response Special Report on Friday on delays and rising costs on NCDOT's Blue Ridge Road Underpass Project in Raleigh.

The work is meant to ease traffic around the N.C. State Fairgrounds by lowering Blue Ridge Road so vehicles and pedestrians can go under Hillsborough Street, Beryl Road and the railroad. The 2026 State Fair is open now and runs through Sunday, Oct. 25.

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What the auditor found

State Auditor Dave Boliek's office said the underpass was due in 2023 and is now estimated for spring 2027.

The contract required completion no later than Aug. 1, 2023. Lane Construction Corporation, the design-build contractor, proposed July 31, 2023, and that date became the contract's final completion date, the report says. An NCDOT Division 5 timeline from October 2025, cited in the report, lists the current estimate as spring 2027.

The auditor's funding table shows Blue Ridge Road project funding rose from $50.7 million in August 2018 to $71.6 million in 2025, a 41 percent increase. The largest single increase was a $17 million federal funding request that the Federal Highway Administration approved on March 12, 2025.

The underpass is part of a larger design-build contract, C204157, that also covers I-440 widening. NCDOT awarded that combined contract to Lane on Oct. 23, 2018. NCDOT's project page lists the combined contract price as $346.2 million. The auditor's $50.7 million to $71.6 million figures are the underpass project's own funding, not the full I-440 contract.

"North Carolinians traveling in for the State Fair have patiently waited for years on the Blue Ridge Road Underpass Project. This is a complex project and railroad issues have delayed it from the start, but the need for this underpass hasn't gone away," Boliek said in Friday's release. "As this report shows, delays cost taxpayers additional dollars. Enhanced transparency and public reporting will help manage expectations and hopefully drive an additional sense of urgency."

Why the work slipped

The auditor said railroad right-of-entry problems delayed the project from the start. Construction on railroad property could not begin until that right of entry was fully executed.

NCDOT awarded the combined contract in October 2018. Blue Ridge Road did not close to traffic until October 2022, the report says. NCDOT's project page says the road has been closed on either side of the railroad tracks just south of Hillsborough Street since October 2022 and will stay closed until closer to completion.

Poor soil, found after construction began, added more delay, the auditor said. Because of railroad limits, the contractor could do only limited soil testing before work started. Designers used conservative assumptions, then had to make costly changes when they hit poor soil.

The report also says CSX Transportation, Norfolk Southern Railway and the North Carolina Railroad Company each have to approve work in their rights-of-way. Under NCDOT's agreement with CSX, the railroad may take up to 30 days to review a submittal, and up to 30 more days to review one that comes back not approved.

NCDOT told the auditor it is negotiating with Lane to set a Blue Ridge Road completion date that is separate from the I-440 widening.

Daily fees in the contract

The contract lets NCDOT charge Lane $20,000 a calendar day in liquidated damages if the contractor misses substantial completion, and $5,000 a calendar day from then until final completion. Other daily fees apply to intermediate deadlines, including some tied to the State Fair.

The auditor said NCDOT has not publicly reported whether it has charged any of those fees. NCDOT communications through September 2025, cited in the report, did not say whether the agency had used the clauses.

What the auditor recommended

The report says NCDOT does not keep clear, public, Blue Ridge Road-specific performance controls, even though the contract splits that work from the I-440 widening for funding. It also says NCDOT uses a progress schedule rather than a critical-path schedule, and does not publish Blue Ridge Road-specific weather delays in a consistent or timely way.

The auditor recommended that NCDOT report the underpass costs and schedule separately, track the contract's Blue Ridge Road milestones, and say publicly whether liquidated damages apply when those milestones are missed. The report also calls for a firm standalone completion date, a monthly critical-path schedule, a log of soil and access problems found during construction, and a simple public dashboard.

NCDOT's public project page lists a Blue Ridge Road completion year of 2027. The auditor said the agency has not published a firm, contractually established completion date.

What NCDOT said

NCDOT's written response, dated Sept. 22, 2026, is in the report. Senior Deputy Chief Engineer E. Boyd Tharrington signed it.

The department said it reviewed all five findings. It said it will improve public information specific to the Blue Ridge Road work, including a more specific anticipated completion milestone on the project website. It said contract time and any liquidated damages will keep being evaluated under the contract, and that a final decision on those fees may not come until closeout.

NCDOT said railroad coordination is especially important on this kind of job. It said the design-build team already keeps a railroad submittal log, and that the Rail Division is giving more help tracking reviews.

The department said it does not propose adding a critical-path schedule to this contract. It said the contract never required one, the project is in the latter stages of construction, and it will not impose that requirement now. It also said it will not create a separate soil-and-access log at this stage, and it will not publish a running tally of weather days, because individual weather days do not automatically change the completion date.

NCDOT said it remains focused on finishing the underpass safely and will apply lessons to later projects.