OT - When The Going Gets Rough aka As Your Pothole Grows

How are the roads that you drive on?

States Delay Highway Projects Due to Costs By KELLI KENNEDY, Associated
Press Writer
Fri Apr 7

The cost of building roads has gotten so high, not even dirt is cheap
anymore. As a result, many states are postponing scores of highway
projects.

The reconstruction work from the eight hurricanes that have hit the
United States since 2004 has combined with a rise in population in some
states to drive up the demand for labor, material and equipment. That,
in turn, has pushed up wages and prices.

Surging fuel prices, China's immense demand for concrete and steel and
the reconstruction of Iraq are also pushing U.S. road construction
costs higher.

"We plan for cost increases, but this has been a situation that a lot
of events have come together all at one time," said Lowell Clary, an
assistant secretary at the Florida Department of Transportation.

Until 2004, highway material costs nationally were fairly steady, with
a 12-year average annual increase of 1.8 percent, according to the U.S.
Bureau of Labor Stats. But those costs rose 12.5 percent in 2005, the
bureau said.

According to the bureau, hot-rolled steel bars and structures were up
45 percent in 2004 from the year before, and diesel fuel was up 27
percent. Marked increases were also reported for crushed stone,
ready-mix concrete and asphalt paving material.

In Florida, concrete went from $564 a cubic yard in 2004 to $749 last
year, and a cubic yard of dirt climbed from $4.38 to $7.24, according
to the state Transportation Department.

"Between higher labor increases and the materials increases, we're
having to pass that on to the customer, therefore our prices are up
substantially," said Mike Horan, a paving contractor near Sarasota.

Florida has about 8,000 projects in various stages in its five-year
work program but was forced to defer 62 of them when its highway budget
came up short about $1 billion, Clary said. Seven projects were
deferred in booming Miami-Dade County.

Ricky Leme often sits in bumper-to-bumper traffic in an area where one
of the projects has been postponed.

"They should get on it now," said Leme, a process server. "This is
screwing up everybody's work. Right now it's taking about a half-hour
to get to the freeway."

Some states are finding fewer contractors are bidding on jobs, either
because they have more work than they can handle, or they cannot get
the labor or the materials they need. Fewer bids can mean higher
prices.

In Alaska, a road project that was expected to cost $6 million had only
one bid, which came in at $10 million. Only two contractors bid on a
Washington state road project in January, said Kevin Dayton, a
construction engineer for the state. The low bid was $5 million over
the engineer's estimate of $22.3 million.

To encourage more bids, Washington state is offering to give
contractors a portion of the savings for coming up with creative ideas
that reduce costs without compromising quality. California is trying to
forecast cost increases more accurately and come up with more realistic
job estimates, in the hope that will encourage more contractors to bid.

Contractors' bids are coming in well over the estimates in Georgia
because the hurricane cleanup along the Gulf Coast has made it more
difficult and costly to hire laborers, said David Graham, director of
construction for the Georgia Department of Transportation. Georgia
postponed 84 projects in 2005, Graham said.

"Equipment operators, truck drivers and laborers are getting tougher to
find," he said.

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Associated Press Writer David Fischer contributed to this report from
Miami.

JF

"Jerry Foster"