Economy impacts state road and bridge programs

Reacting to a weak economy, the Florida Department of Transportation (FDOT) is accelerating more than 179 road and bridge projects totaling $1.4 billion. Meanwhile, the Missouri Highways and Transportation Commission directed the Missouri Department of Transportation (MoDOT) to revise its five-year Safe & Sound Bridge Improvement Program.

"I applaud the Florida Department of Transportation for accepting the challenge to move up the timeline for getting shovels in the dirt faster and reducing congestion on Florida’s roads," said Florida Governor Charlie Crist. "The sooner projects are started, the sooner we can create jobs and pump dollars into Florida’s economy."

The Florida projects include road resurfacing, lane additions, bridge rehabilitation, and safety enhancements to the state’s transportation system. The projects will employ 39,000 people and generate $7.84 billion in economic benefits, a $5.60 return on each state dollar invested, the governor said.

FDOT advanced construction start dates by one to five months. These accelerated projects are in addition to projects totaling more than $250 million for which FDOT had already received bids prior to the governor’s instruction to accelerate projects.

To help speed up the starting dates of construction projects, FDOT streamlined the process for obtaining a drainage/driveway permit by reducing the 90-day timeframe allowed by Florida law to between 15 and 30 days. FDOT-accelerated projects include the following:

• widening US 301 in Sarasota from four to six lanes;
• widening US 1 in Vero Beach from four to five lanes;
• expanding the capacity of South Patrick Drive in Brevard County from two to four lanes;
• repairing and replacing state highway bridges, including the SR 39 bridge over the Hillsborough River; and
• adding four lanes on NW 87th Avenue from 58th Street to 74th Street in Northwest Miami-Dade County.

Missouri changes
In September, the Missouri Highways and Transportation Commission approved plans to improve 802 of Missouri’s lowest-rated bridges in five years, starting with 100 structures that will be under construction early next year. However, MoDOT will manage the Safe & Sound Bridge Improvement Program differently than the Design-Build-Finance-Maintain contract that was envisioned when the program was launched two years ago. The Commission concluded the procurement process that had previously identified Missouri Bridge Partners (MBP) as the apparent best-value proposer, citing the turmoil in the financial markets that made the proposal unaffordable, and directed MoDOT to move forward with alternative methods to deliver Safe & Sound.

There will be 554 bridge replacements included in a single design-build package to be advertised this fall and awarded in late spring 2009. The remaining 248 bridges to be improved will be contracted using a modified design-bid-build approach, where projects are grouped by type, size, or location to accelerate construction schedules.

"Safe & Sound has always been about fixing bad bridges quickly and economically," MoDOT Director Pete Rahn said. "The experience of this process tells us that the design-build-finance-maintain approach is very feasible, but for this particular project, at a time of extreme volatility in the nation’s credit markets, the requirement for private financing made Missouri Bridge Partner’s proposal just too expensive for our budget."

Under the MBP plan, MoDOT would have been required to make annual payments ranging between $65 million and $74 million, depending on interest rates.

"We had budgeted for a $50 million annual payment, using roughly one-third of the federal bridge replacement funds Missouri receives each year," Rahn said. "At a time when we are faced with declining revenues and increasing costs, the Commission was concerned we might not be able to honor our commitments in MoDOT’s five-year construction program if we went forward at a price over our budget. Keeping our promises is the Commission’s absolute top priority. The turmoil in the credit markets had a tremendous impact on the cost of this project, and extended contract negotiations while we waited to see if a calming of the credit markets would make this project financially viable. Unfortunately, that did not happen."

MoDOT has spent $15.6 million on development of the Safe & Sound program, an investment that will enable it to have 100 bridge projects under contract by spring, and will also reduce the cost of other contracting options and speed their implementation. Included in the cost to date are stipends paid to MBP and Team United, the other proposing team that was eliminated from consideration by the Commission in December 2007. Those stipends convey ownership of the technical concepts developed by each team to MoDOT for its future use. Additionally, MBP developed bridge plans and conducted surveys and geotechnical investigations in the field under a Limited Notice to Proceed issued by the Commission in June that MoDOT will use to get work under way. MoDOT also located utilities at bridge locations—work that won’t have to be repeated.

Rahn said MoDOT plans to issue bonds to pay for the project with annual payments of approximately $50 million as budgeted previously. With finance charges, it’s estimated that MoDOT’s new plan will be $300 million to $500 million cheaper than the MBP proposal.

"Ultimately,’ Rahn said, "the question became whether MBP or MoDOT could provide financing for the project at the lowest cost. In view of the present turmoil in the financial markets, the answer is that MoDOT could do it for less."

A complete list of all the bridges in the Safe & Sound program and other information can be found on the MoDOT website at www.modot.org/safeandsound/index.htm.