The city is now accepting bids for the second time for its multimillion-dollar sewer lake line project that began in 2002.

Last year, only two contractors showed interest and both bids came in twice the amount of what city officials expected. The City Council rejected those bids, which were $27.5 and $29.9 million, and directed staff to devise a more affordable project.

This time, City Councilmembers were told to expect bids to be near the prices seen in the previous offers, but consultants said they found ways to reduce some costs. City officials are estimating that bid offers will come in just under $28 million for what they are now advertising as a three-part project.

Contractors are able to bid for just one, two or all the projects. This allows maximum flexibility, project consultants told the Council earlier this month. It also makes the bids more competitive and attractive to bidders. The new proposal allows another year for a contractor to work on the new pipe planned to go into the lake. According to the city’s consultants, the third year to complete the project should attract marine contractors who might have been worried that they would be pressed for time and viewed that as a risk. Upon the request of City Councilmember Dan Grausz, the second section of in-lake pipe to be replaced was later tested and determined to be in sufficient condition. It will not be replaced, saving the city about $5 million.

The project’s latest schedule has an estimated completion date of Oct. 30, 2010 for the rebuild of a North-end pump station and Oct. 14, 2011 for the new pipeline. The new sewer pipe will be installed in the shores of Lake Washington on the northwest portion of the Island — starting just north of Proctor Landing and ending near Roanoke Way. About 7,000 linear feet of pipe must be replaced because the line is deteriorating, has had several failures and cannot adequately handle the current load.

City leaders and consultants plan to accept bids until Nov. 18, hoping that the Council would approve one by its first December meeting. This is the second time that the project will go out for bid. In 2007, only three contractors showed interest, and all bids came in twice the amount of what city officials expected. The Council rejected those bids, and directed staff to devise a more affordable project. One section of pipe was later tested and determined to be in sufficient condition and it will not be replaced, which saved about $5 million.

Funding for the project will come from cash reserves, increased utility rates and a federal grant.