Soaring costs delaying road construction

The cost of building roads has gotten so high, even dirt isn’t cheap. And that spike is causing Florida and other states to delay the construction of highways, increasing traffic congestion.

Engineers say reconstruction from the eight hurricanes that have hit the United States since 2004 combined with a population boom in Florida and elsewhere is forcing road builders to compete with construction companies for workers, material and equipment.

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

“It’s certainly been challenging. 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 of the Florida Department of Transportation.

Until 2004, national highway material costs were steady, with a 12-year average increase of only 1.8 percent, according to the Bureau of Labor Statistics. Now they’re rising nationwide.

In Florida, concrete is up 32.8 percent a unit, from $564 in 2004 to $749 last year. Prices for reinforced steel and asphalt have also jumped, according to the Florida Department of Transportation. Even a cubic yard of dirt or ‘earthwork’ cost $7.24 on average in 2005, up 65.3 percent from $4.38 in 2004.

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.

Florida seems to have taken the brunt of the surging prices. About 1,000 new residents are moving to the state every day, clogging up traffic at rates that outpace Texas and California, Callaway said.

But the problem has also prompted transportation officials elsewhere to consider new ways to cut costs, including better ways to court contractors as the number bidding on jobs has plummeted. Fewer bids means 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 Washington’s State Road 543 project in January, said Kevin Dayton, construction engineer for the Washington Department of Transportation. The lowest bid was $5 million over the engineer’s estimate of $22.3 million.

Hurricane cleanup along the Gulf Coast has made it more difficult and costly to hire laborers. Consequently, contract bids are coming in well over the estimates, said David Graham, director of construction for the Georgia Department of Transportation.

Georgia deferred 84 projects of 476 in 2005 and expects a similar scenario this year, Graham said.

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