Slow Down

Construction Costs Affect Public Funding for Highways

A lack of reliable funding flow in the tri-state area for highway construction is changing the way contractors do business with the state agencies responsible for the region's roadways. Nonetheless, improvement work on several highways is well underway, with even more ambitious projects still on the drawing boards.

Highway construction, even at its easiest is more complex than can be seen from the gridlocked traffic. But even the most seemingly rudimentary projects often require a significant amount of related construction and coordination with outside entities. In Connecticut, the Department of Transportation's $2.9 million Avon Truck Escape Ramp, scheduled for completion April 30, included the installation of a state-of-the-art system of fiber arresting nets and energy-absorbing units. It also necessitated the demolition of a house; installation of erosion and sedimentation control systems; construction of a new shoulder; and installation of new utility poles, in coordination with local utility companies in addition to the standard installation of temporary concrete barriers and construction site signage. Projects that cost in the hundreds of millions, such as the reconstruction work on the Brooklyn-Queens Expressway, which runs through 100 % developed residential neighborhoods, the amount of coordination and logistical planning rises exponentially.

Rising Prices

Rising materials costs has put many projects in the tri-state area back to the drawing board. Furthermore, in highway construction, the lead time between a project’s original concept to the start of construction is sometimes decades, not just years, as is the case of the reconstruction of Route 347 in New York's Suffolk County, originally proposed in 1965.

"While the Route 347 has been a dream for over 40 years, the funding to put the actual shovels in the ground was set back in 2005," says Marc Herbst, executive director of the Long Island Contractors’ Association. "Since then, inflationary construction costs have risen dramatically. In the last 12 months alone construction commodities increased – concrete up 10.8%, steel up 14.3% and asphalt up 7.7%. The impact of these cost changes is simply that there will not being enough dollars available when the job is set to begin. Route 347, originally planned to be a three-year construction season project, instead, will probably be broken down into as many as eight separate projects over that many years."

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Robert Briant, Jr., chief executive officer of Utility Transportation Contractors Association of New Jersey, agreed that project costs are forcing several projects to change direction.

"In our region a lot of contractors saw serious escalation on steel and copper, there was concern about concrete, and it all seemed to hit at the same time," he says, adding that the rising fuel prices would cause projects to run over budget by as much as $700,000. "It's very difficult to recuperate that.”

The nation-wide infrastructure funding shortages are creating entirely new practices by the DOTs, in some cases affecting the way contractors do business.

"In New Jersey, we tend to borrow money to pay for things and we're just about maxed out in our borrowing capacity," explains Briant. To compensate for lack of cash flow, public owners now are “changing their plans and specifications and shifting more risk on contractors," he says. Unforeseen conditions and negotiations with utility companies, for example, normally the responsibility of the DOT, must now be handled by the contractors.

"Funding needed to keep up with the improvements and the increasing cost of construction continues to remain one of our biggest challenges," says Erin Phalon, a spokeswoman for NJDOT. "The NJDOT continues to prioritize our projects based upon management system needs and CIS (Capital Investment Strategies). We are also taking another look at the projects we are putting out to ensure they address the original purpose and need and are designed as smart as possible.”

Projects are now getting the green light based on necessity, Phalon adds.

“We must fix only what needs to be fixed, not everything we would like to fix,” she says. “Other states are also addressing how to maintain their bridges and roadways with limited resources and increasing cost."

To save on costs, NJDOT has gone to an electronic bidding process, in which plans are purchased electronically and bids are submitted through an on-line process.

NJDOT is also designing more projects in-house. “In fiscal year 2008, in-house design is responsible for $185 million of the projected over $765 million worth of construction contracts,” says Phalon “NJDOT staff is designing pavement rehabilitation projects, bridge deck replacement projects, railroad safety projects, and maintenance projects.”

New York Commissoner of Transportation Astrid Glynn's department has predicted that in order to properly upkeep a safe, reliable system, New York would have to invest $175 billion over the next twenty years, which looks less and less likely as costs continue to rise.

“The financial crunch is the biggest challenge,” says Philip Salerno, director of construction for the New York State Department of Transportation. “The contractors are really going to have to sharpen their pencils to get the bid, and then the job is really going to rely on the contractor's ability to coordinate his projects so he doesn't waste any time, material, equipment time. He's really going to need supervision.”

While financial concerns continue to plague the transportation sector, maintenance projects continue to be the first priority as aging highways and bridges keep getting older.

NJ DOT last May completed the $85 million Route 1&9 4T Elizabeth River Viaduct in

Elizabeth City. Grade 70 high-performance steel was used in the flanges of the hybrid girders on the longer spans to maintain a uniform depth throughout the structure, which allowed the DOT to eliminate the need for an additional line of stringers and use more conventional steel in the normal spans. Drilled Shafts were used to reduce the seismic foundation concerns as well as to provide an economic type of foundation support between the bridge and the rock surface below. The rock had significant variations in elevation, quality and character along its upper surface and the drilled shafts allowed us to adapt the individual shafts to any variations in the conditions found as they were being constructed.

“The biggest challenges for the department will be to keep up with the maintenance, repairs, and reconstruction of our aging infrastructure (bridges and roadways) due to continued limited resources and increasing construction costs,” says Phalon.

“We've got to turn around this notion that in the last two decades we've been disinvesting in our infrastructure,” says Briant. “People think we don't have to make continued investment - we have to turn that around.”