Inflation is taking off from new infrastructure projects

local

A 37% increase in the price of liquid asphalt increased the cost of building a one-mile road in Huntington by about $140,000.

A sign is shown near ongoing work on a project to replace water main pipes in downtown Tacoma, Wash., Wednesday, June 15, 2022. Ted S. Warren/The Associated Press

Price of one foot of water pipe in Tucson, Arizona: up 19%. The cost of a ton of asphalt in a small town in Massachusetts: Up to 37%. Estimates to build a new airport terminal in Des Moines, Iowa: 69% more, with delays of several years.

Inflation is taking a toll on infrastructure projects across the US, driving up costs so much that state and local officials are postponing projects, leaving others behind and prioritizing their own needs.

Price hikes are already undermining the value of $1 trillion Infrastructure plan signed into law by President Joe Biden Just seven months ago. That law included, among other things, a nearly 25% increase in funding of the regular highway program for states.

“Those dollars are essentially evaporating,” said Jim Tyman, executive director of the American Association of State Highway and Transportation Officers. “The cost of those projects is going up 20%, 30%, and eroding that growth from the federal government that they were so excited about earlier in the year.”

In Casper, Wyoming, a low bid to rebuild a major intersection and build a new bridge over the North Platte River came in this spring for $35 million — 55% more than a state engineer’s estimate. The bid was rejected and the project delayed as state officials reevaluate their options.

“If this inflation continues to be the way it is, we’re going to have to roll projects from one year to the next, into the next, into the next,” said Mark Gillette, chief engineer for the Wyoming Department of Transportation.

Gillette hoped that the Federal Infrastructure Investment and Jobs Act would accelerate highway and bridge construction.

“But it is not going as far as we had hoped,” he said.

In addition to roads, the federal infrastructure bill includes billions of dollars for water projects, railways, airports, broadband Internet, electric grids and green-energy projects in the coming years.

Inflation has hit the entire US economy, posing one of Biden’s biggest challenges during the midterm election year. Fuel, food and housing costs have all gone up. Consumer prices increased by 8.6% in May compared to last yearThe highest rate since 1981, according to the US Department of Labor.

Prices of some of the key materials in building infrastructure have gone up even further. Prices paid to American manufacturers of asphalt paving and tar mix May were up 14% from the previous year, according to data from the Federal Reserve Bank of St. Louis. for prices fabricated steel plateused in bridges, were up 23%, and ductile iron pipes and fittings – Used by water systems – was about 25% higher.

The increases are being driven by a number of factors, including a worldwide supply-chain backlog, strong consumer and business spending in the US, Russia’s invasion of Ukraine – and, some argue, federal energy and fiscal policies.

US Rep. Sam Graves, a ranking minority member on the House Transportation and Infrastructure Committee, argues that infrastructure legislation is contributing to inflation by pouring more federal money into an economy already trillions of dollars in federal pandemic aid.

“They’re borrowing more money so they can spend more money,[which]is driving inflation, which is cutting back on the projects they really want to do,” said Graves, a Missouri Republican who Voted against the infrastructure bill.

Senior White House adviser Mitch Landrieu said the infrastructure law “really positions us to reduce costs for families in the short and long term.” He pointed to, among other things Made in America Requirements For steel, iron and other building materials that can strengthen the supply chain and thus reduce costs.

Des Moines International Airport officials were relying on federal infrastructure money to replace an old terminal with a modern structure. Four years ago, a new 14-gate terminal cost about $434 million and was projected to open by 2026. until this spring, cost increased up to $733 million.

That’s more than the airport, even with federal aid. So officials plan to break the project into phases, building just five new gates by 2026 at a cost of $411 million.

“If inflation continues, the project could be a decade before its completion,” said airport executive director Kevin Foley.

Other projects have also been hit by the rise in inflationary prices.

Since voters approved a property tax increase in 2020, the estimated cost of building two light rail lines and a tunnel through Austin, Texas, has increased. from $5.8 billion to $10.3 billion, A big factor was the doubling of the length of the tunnel. But inflation and rising real estate prices also fueled the growth, forcing officials to consider cutting costs or extending the deadline for completing the project.

“It’s been a challenge,” said David Couch, chief program officer of the Austin Transit Partnership.

Lower bids for a series of bridge repairs along Interstate 55 in St. Louis came in at $63 million this year, 57% more than the budget amount. State Department of Transportation Director Patrick McKenna said that overall, Missouri’s highway construction costs for the fiscal year ending in June were $139 million more than budgeted – an 11% increase that has marked a “significantly higher” than many low-budget years. Swing”.

Although Missouri moved forward with this year’s projects, inflation “will take a bite out of the future,” McKenna said.

Inflation has taken an immediate effect in some places.

When bids for a road project in Lansing, Michigan came in 60% higher than anticipated, the city revamped the project and halved its scope, said Andrew Kilpatrick, public services director and acting city engineer.

In Huntington, Massachusetts, a 1.5-mile stretch of road will not be finished this year after a 37% increase in the price of liquid asphalt, raising the cost of extending a mile by about $140,000. Highway Superintendent Charles Dazzle said the city receives $159,000 annually in state funding for its roads.

“Right now, a mile road, that’s a year. He’s not doing anything else,” Dezel said.

Public water systems across the country are also strained under inflation.

When Tucson, Arizona launched the first part of a four-stage water main replacement project in September 2020, ductile iron pipes cost $75-a-foot and a gate valve cost $3,000. When it bid the most recent stage this spring, the cost of the pipe had risen to about $90-a-foot and the gate valve to about $4,100. The city is now prioritizing which other projects it can afford, and which ones will have to wait.

To sum it up, we’re doing less work for the same amount, said Scott Schladweiler, Tucson’s chief water engineer.

The city of Tacoma, Washington, is also turning to some of its planned water main replacements due to rising costs.

“Some of them are getting delayed, some of them are being reduced in scope, and this is forcing us to reevaluate some of the budgets,” said Ali Polda, principal engineer of the city’s water department.

Residents of a neighborhood west of Little Rock, Arkansas, will pay a $146 monthly surcharge to Central Arkansas Water to install new water lines. This fee is 17% higher than originally planned due to increase in construction cost.

Michael Arsinaux, acting CEO of the Association of Metropolitan Water Agencies, said other public utilities would also have to choose between taking back work and the costs to customers.

“In the end, this rate payers will suffer,” he said, “because projects have to be completed, and funding will have to come from rate payers.”

,

Lieb reported from Jefferson City, Missouri and Casey from Greeley Tribune. Associated Press writer Josh Bok in Baltimore contributed to this report.

Leave a Comment

%d bloggers like this: