Megatunnel

* Four times last year Mrs. L. of nearby Des Plaines was confronted by calf-deep raw sewage covering her basement floor. Each time, removing the sludge took two people more than half a day, not including the countless scrubbings to remove the smell.

* Twelve to 15 times in the past three years, Mr. and Mrs. S. of suburban Skokie have watched their basement fill up with six inches of rainwater during or after storms. The family has moved all boxes, garden tools, and laundry baskets up on tables well above a telltale bathtub ring on the walls.

* A longtime friend of the D. family still tells the story of the first time a storm left knee-deep rainwater and sewage in its La Grange basement. ''They rented professional cleaning equipment and enlisted their guests until 4 in the morning.'' Months later, it happened again.

Burrowing to the rescue of these and over 1.6 million other soggy-footed, nose-holding, grin-and-bear-it Chicagoans is TARP, alias Tunnel and Reservoir Plan, alias ''Deep Tunnel.'' It's the most expensive public-works project ever attempted in the United States. As prototype for a nation's worth of aging cities with similar flood and sewage problems - Milwaukee, San Francisco, and New York among them - the project has been one of the most closely watched events in all of mega-engineering.

Everyone wanted to see if TARP's gigantic mechanical ''moles'' - burrowing through solid rock up to 270 feet beneath the streets - really work. It turns out they do. And what's significant is their unprecedented size.

The 36-foot hole that's left can accommodate a three-story house, a Boeing 747 (sans wings), or when finished (131 miles long), enough water to fill a freight train stretching around the earth one and a half times. Forty-seven miles' worth of rubble now dots the Chicago landscape in mammoth piles.

And since similar hard-rock tunnels are feasible under Atlanta; Baltimore; Buffalo, N.Y.; Cincinnati; Columbus, Ohio; Dallas; Detroit; Dayton, Ohio; Indianapolis; Kansas City, Mo.; and Los Angeles, many are studying the possibilities - and waiting for a verdict on TARP. Advocates say the system is the most reasonable and economical way to meet federal Environmental Protection Agency requirements set up in the 1972 amendments to the Clean Water Act of 1968 . Those require swimmable, drinkable, navigable waterways across the country by July of this year. Many cities are still struggling to meet those requirements and will have to apply for extensions.

But now, in one of the largest controversies ever to hit this city, which is historically rife with political tugs of war, the light at the end of TARP has been switched off. Because of astronomical costs, even more astronomical estimates - and differing opinions about both - funding for the project has been effectively cut off by US Sen. Charles H. Percy, the Illinois Republican.

Originally one of its largest supporters, Mr. Percy now calls TARP ''a dubious boondoggle.'' However, crying ''Politics!'' with a capital ''P,'' the Metropolitan Sanitary District (MSD) and a large majority of the 126 metropolitan area mayors or municipal heads want to continue building before inflation kills the project altogether or federal funding is directed elsewhere.

The story is one of the strongest examples of how national policy can become inexorably tangled by well-intentioned local, state, and federal coalitions when the problem (so vulnerable to special interest manipulation) is so vast and its solution (also vulnerable) so costly. In this case, what seems to be a reasonable, wait-and-see attitude on Percy's part means breaking state and federal law while perhaps ultimately toppling a project two decades in the making.

The TARP model is an important example beyond Chicago because its unique subterranean water storage - during and after storms - prevents the loss of pollution control which occurs in virtually every other advanced sewer system. Overflow that usually bypasses treatment because of sheer volume can be held underground, then pumped to the surface later and treated.

TARP was begun in 1972 to meet Illinois water quality standards, eliminate periodic backflows of sewage into Lake Michigan - the city's source of drinking water - and prevent basement flooding. Over the 375 square miles that make up Cook County, rainstorms of normal severity raise the specter of basement flooding. And, because sewers in 54 of these communities accommodate human waste as well as rain runoff in one system, backup problems present potential sanitary hazards as well. Even when the storms don't cause basement backup, there is a pollution problem.

''A hundred times a year,'' says MSD Superintendent Hugh H. McMillan, ''some discharge overflow occurs into the waterway system. And over a year's period, it is the equivalent of a community of 1 million sending untreated sewage straight into the river every day.'' That directly affects water quality from Chicago all the way to the Gulf of Mexico.

Senator Percy called a stop to funding for TARP in January of 1981. The biggest reason: cost. When the project was launched, it was put at $1.2 billion. At the time of Percy's moratorium - still in effect - there was disagreement as to how much the project would cost when completed. The MSD said it would amount to $3 billion. Percy quoted a US General Accounting Office (GAO) estimate of $ 11 billion (which has since risen to $12.5 billion). There was general uproar about the ''$8 billion gap'' - mostly attributable to costs not even represented in the MSD estimates, according to them.

Today, the project stands partly completed. Forty-seven miles of tunnel have been dug. This segment - servicing certain northern suburbs - will be ready to use as soon as two pump stations now in construction are ready for use (one in 1984, the other in '85).

Senator Percy says he wants to see how this first phase does what it's supposed to do. ''A moratorium should be placed on all other tunnel construction until it can be proved from actual performance data that the mainstream system provides environmental and flood control benefits commensurate with the costs of constructing, operating, and maintaining the system,'' he says. ''At present there exist no plans at the federal, state, or local levels to monitor the system's performance once it is completed.''

Constant realignment in the pro-and-con TARP camps has made it a complicated controversy as well. Some environmental and civic groups that were initially for it, at least in principle, switched sides when they discovered alternatives or questioned the project's total cost. The most visible and vocal split has been between Percy and the MSD. Contention No. 1: delay

The MSD estimates that Percy's delay - made at the recommendation of his Citizens' Task Force - will take a decade and triple the cost.''To be fair,'' says the MSD's Mr. McMillan, ''let's say once we start testing the new segment in 1986, we give it two years of operation so that we've at least gone through a heavy rain season. And we give all the data to the federal, state, and local agencies and whatever group Senator Percy wants. And they'll talk about it another year. So maybe by 1989 a decision is made.

''So you go to contract bidding in 1990 and somebody looks back and says, 'The costs are 30 percent higher than you said they were going to be in 1981.' And that's exactly what's been happening.'' The inflationary cost of a 10-year delay has been estimated as low as $2.3 billion. But Mr. McMillan adds that inflation rates over the past decade have fluctuated between 12 and 20 percent - the highest in the nation's history.

Percy counters: ''If it's worth spending a dollar today on Deep Tunnel, and inflation doubles the dollar in 10 years, it will still be worth spending $2 in 10 years, because the benefits will be the same.''

One other possible impact of delay: TARP began with federal grant support of 75 percent, which could - because of new laws - drop to 55 percent before the construction is continued. Local money would have to make up the 20 percent loss in federal support. Contention No. 2: 'inflated' estimates

Senator Percy has said ''. . . problems have plagued TARP from the start. . . . The project's cost rose from an original $1.2 billion figure to $7.8 billion in 1977, and current projections indicate that the project may cost well over $ 11 billion by the time it is completed.''

The MSD and the Chicago Civic Federation (a non-affiliated government watchdog group) say the Percy estimate includes $8.4 billion that shouldn't even be there - primarily, certain associated costs for upgrading sewers and plants that will be completed separately from and regardless of TARP. The GAO estimate also includes maintenance expenses for the first 50 years.

Percy counters: ''We looked at the entire project and those ancillary facilities as necessary under the design of TARP to make it work. Once you've got a tunnel, you've still got to upgrade who knows how many billions' worth of sewers to get from each community to the tunnels - many which are very old, in a state of disrepair, unable to flow at their capacity, some of them caving in. So you can't exclude those facilities from estimates.''

He estimates the city of Evanston would need to spend about $100 million to tie in to the Deep Tunnel. Its annual city budget is in the range of $50 million.

Richard Cavalier, writing in Chicago magazine, remarked: ''The GAO's figure is scary. But by analogy, the average $65,000 house might be said to have a variable-rate mortgage, estimated at 12 percent, plus maintenance at projected inflationary rates for heat, electricity, water, and general repairs, plus upkeep for the next 50 years - let's say at least $500,000 'GAO cost' for that little place.''

The MSD says the reason for the ''inflated'' GAO figure lies in its history. During hearings on the 1972 amendments, the then-head of the GAO, Elmer Staats, testified vehemently that the new standards would bankrupt the nation.

''So the GAO began an analysis of the economic impacts of the 1972 act,'' says Mr. McMillan. ''And the biggest project defined at that time through the EPA was TARP. They blew it out of the sky, in terms of cost, and went back to Congress and said, 'See, the country cannot afford the Clean Water Act and the goals established by Congress.' ''

McMillan says Percy revived that report, had it escalated by the GAO, and they came out with the $12.5 billion figure. ''Anybody that thinks that GAO is a totally objective congressional evaluation team has got his head in the sand.''

''The MSD should produce evidence if they believe that Staats was biased,'' says Percy. ''The GAO had flagged TARP even before we got involved in the issue.''

Puzzled by what they call ''Percy's delaying tactics'' - calling for investigations, making allegations of waste and mismanagement, quoting reports out of context - the MSD holds up a Chicago magazine article which concludes, ''The motives for its [TARP's] proposed cancellation seem to lie in politics. . . . Percy can come off as a crusader against fraud, a Washington senator who cares about his home turf.''

Nonsense, says Percy. ''If we wanted to play politics with Deep Tunnel, we've chosen the wrong issue,'' says Gary Rowe, Senator Percy's Illinois press secretary, ''because the MSD is killing us every time there is a bad rainstorm. They're going around to the homeowners and municipal officials and they are saying, 'Chuck Percy's against the tunnel that will solve your problems.' It's easy to buy that, because who in the world is going to take the time to understand how intricate the issues really are?'' Contention No. 3: reasons for TARP

The issues, says Percy's office, are these:

* Preventing backflows into the lake: ''During 1981, the MSD discharged a record volume of 700 million gallons of storm water mixed with raw sewage into the lake. That is roughly equivalent to what the city of Milwaukee discharges to the lake every two days. We must ask, is this that bad?''

* Eliminating waterway pollution: ''The hopes for tough, nationwide standards on water pollution . . .is not turning out to be practical in its implementation. The Chicago River is not the Apple River in Wisconsin, which has a lot of fish and recreational potential and all the rest. The Chicago River is a barge channel with commercial navigation on it. So do the same national standards apply to all those national rivers?''

Percy quotes a report issued by the Illinois Department of Natural Resources in 1981: ''The state rule that requires construction of TARP - the water quality standard - imposes an unreasonable and undue economic hardship on the communities in Illinois relative to its environmental benefits. We note that there is no evidence that the rule is accomplishing the environmental benefits for which is was established.''

* Water quality: ''The MSD has us in a bind here, quite frankly. If we say the water quality standards are too high, they can say, 'You are in favor of pollution.' Let's say you spend $100 million and you get an 80 percent solution to your problem. And for another $100 million you get another 15 percent of solution to your problem. We're asking: Is it worth spending the second $100 million to get 15 percent? The public must ask this question regarding TARP. These are the real issues that need to be debated, not the simplicity of 'Are you for or against pollution?' We are not against solving their pollution problems.''

Senator Percy quotes CBS's ''60 Minutes'' estimate (March 1982) that if every city in America with problems like Chicago solved them with projects like Deep Tunnel, it would cost the US Treasury $600 billion. He advocates considering cheaper, less centralized alternatives such as under-street storm-water detention tanks and inlet restricters (collars that slow the entry of water into street drains).

In the meantime, Chicago is violating both federal and state clean-water laws - temporarily allowed while the communities in question try to correct the problem.

During moderate storms (3/10ths of an inch of rainfall can overload the system) the MSD now releases untreated sewage into the Sanitary and Ship Canal. During intense storms, three other locks are opened, sending untreated sewage and storm water backflow into Lake Michigan, almost always requiring beach closings.

''Chicago took Milwaukee; Hammond, Ind.; East Chicago, Ind.; and US Steel to court for polluting Lake Michigan,'' says the MSD's McMillan. ''We never asked the other communities or the industries whether it was going to cost them money to stop polluting the lake. We go to court to get them to do it. And now we're the ones doing the polluting - impacting others down lake and downriver.''

And of course whenever the Chicago River is overloaded, the threat of basement backflow looms. The seasons have been particulary rainy in the past two years. The family in Des Plaines has shelved plans for a basement rec room for its two small children. And it has postponed moving until the problem is solved so it can get a decent price for its small two-story house.

And Mrs. L. can point to half a dozen other homes visible through her front window where the backup problem is just as bad or worse.

''The point is,'' says Percy, ''that very quietly, but hungrily, the MSD is eating up more and more of the tax base . . . at the same time that schools are in serious jeopardy, streets are falling apart, full of potholes - the whole infrastructure problem rears its head. . . . Where do we spend our dollars . . . where they'll do the most good? What's more important, schools or sewers? Or schools or a deep tunnel?''