Cost Overruns Complicate Washington Highway Projects

Fri January 26, 2007 - West Edition

OLYMPIA, Wash. (AP) Washington’s new 16-year, multibillion-dollar transportation building boom is already over budget and Gov. Chris Gregoire said projects will have to be “re-racked” to stretch them out.

“It’s not a 16-year plan anymore. It’s closer to an 18-year plan,” state budget Director Victor Moore said in an interview Dec. 22.

The culprit of the estimated $1.6 billion shortfall is an unexpected price surge for oil-based paving materials, steel and labor, he said. China is on a building jag, affecting the global marketplace, and a domestic construction surge is making it difficult for the state Department of Transportation (DOT) to even find enough qualified contractors, he said.

The lack of competition drives up costs and the state is having to reject some bids because only one company submitted a bid, Gregoire said. The agency said environmental mitigation also is causing some price tags to soar.

New transportation taxes are expected to raise approximately $11 billion over 16 years to finance more than 400 projects, but the costs are estimated at $12.6 billion now.

Examples: The rebuilding of the quake-jangled Alaskan Way Viaduct in Seattle, originally expected to cost $2.4 billion, has risen to more than $2.8 billion. Phase one of widening Interstate 90 through Snoqualmie Pass is now $525 million, up $137 million.

No projects will be dropped, but some will slip a year or two from the original estimate for construction and completion, the governor said in unveiling her $6.5 billion transportation budget.

Safety projects, such as the viaduct, failing bridges and “killer highways,” won’t be delayed, Gregoire said. The slippage will occur for other transportation projects, such as for congestion relief or phased-in corridor improvements, Moore said.

The ambitious project lists highways, freeway improvements, new bridges, four new ferries and other transportation fixes — were touted by lawmakers and the past two governors as the Legislature approved a nickel increase in the gasoline tax in 2003 and a four-step, 9.5-cent-a-gallon increase in 2005. Voters rejected an attempt to undo the latter increase.

The gas tax is 34 cents a gallon and will rise by 2 cents in July.

Moore rejected the idea that lawmakers or the governors misled voters and the Legislature by promising something they couldn’t deliver on time and within budget.

“It was an honest effort on everyone’s part to estimate the cost of these projects,” he said. “There were things we just couldn’t foresee.”

He said there is no thought of canceling some projects and no plans to raise transportation taxes further.

“We don’t have the authority to just eliminate projects and we don’t have to,” Moore said.

Lloyd Brown, spokesman of the DOT, said the agency has been clear in telling lawmakers and the public that costs are spiraling.

“We’ve talked about those cost increases, increasing prices of materials and fuel and labor, a dip in the number of contractors, the competition from the Katrina recovery and the burgeoning economy in China, and that we would need to continually look at the schedule,” he said in an interview.

An 18-year projection of costs and delivery schedule is tough to write perfectly and will always need adjustment as conditions change, Brown said.

In recent years, the agency has completed dozens of projects on time and on budget, he said.

The governor, who was recently given direct control of the Transportation Department, generally concurred with the DOT’s new project list and budget requests. Lawmakers are being asked to approve a two-year budget that includes $4.3 billion for construction projects and $2.2 billion for operating costs.

The construction plan includes $2.9 billion for highway improvement, $694 million for preservation of existing roadway, $40 million for traffic operations, $443 million for ferries, $157 million for rail and $50 million for local programs.

The plan includes replacing four older ferries at a cost of $342 million, with the first new vessel coming on line in spring of 2009.

There also is the state’s early contribution to the viaduct and the replacement of the Highway 520 floating bridge over Lake Washington, the Spokane north-south corridor, completion of the Hood Canal Bridge and Tacoma Narrows companion span, car pool lanes, the early work on the Snoqualmie Pass project, freight projects, and a new divided highway between Walla Walla and the Tri-Cities.

Senate Transportation Chairwoman Mary Margaret Haugen, D-Camano Island, praised the budget plans from the department and the governor, including the proposals to stretch out the construction schedule.

“I think they’ve done a good job” of laying out a solution, she said in an interview. “The increase in cost is a big issue, no question. We will make every effort to keep the commitment to do all of those projects. That is our goal, to have them all built eventually.”

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