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PSAD-81-19 1 (1981-02-04)

handle is hein.gao/gaobabbml0001 and id is 1 raw text is: BY THE COMPTROLLER GENERAL Report To The Congress OF THE UNITED STATES Controlling Federal Costs For Coal Liquefaction Program Hinges On Manage- ment And Contracting Improvements Two pilot plants to demonstrate direct lique- faction processes for producing synthetic liq- uids and solids from coal became operational during 1980. The plants were financed jointly by the Federal Government and private in- dustry. The Federal Government's share of the cost of one plant was 87 percent; on the other, costs were shared equally. Construc- tion of two more larger facilities is scheduled to begin in 1981. Foreign government invest- ment is high in one plant but private contrac- tor investment is low for both. Both operational pilot plants encountered de- sign and construction problems attributable to DOE's premature commitment to contract- ing and to poor construction and contract ad- ministration by the contractors. The problems greatly increased cost and schedule slippages. Should similar problems be encountered on the planned demonstration facilities, costs to the Federal Government could be enormous. GAO makes recommendations to DOE to con- trol cost growth and management of future coal liquefaction and other energy projects and to enhance the prospects for successful future commercialization. ,D ST2 PSAD-81-19 FEBRUARY 4, 1981 114248 JtqJW

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