“Obviously, construction costs have gone up everywhere,” said John Kilpatrick, “and road projects are not immune to that.”
Kilpatrick is chief of facilities management at Glacier National Park, where he's hip-deep into a multiyear reconstruction of the famous Going-to-the-Sun Road.
Today, in 2008, the estimate has been jacked up by a staggering $100 million, to somewhere between
$240 million and $270 million.
It is an unwelcome surprise for all involved, this “unexpected escalation,” as Kilpatrick calls it.
“The real cost driver here is materials,” said Doug Hecox, spokesman for the Federal Highway Administration.
Asphalt, made with oil, costs more than twice what it did just a few years ago, he said. Same with steel, in what Hecox called “a very volatile commodities market.”
Part of the problem is supply and demand, as China and India gobble up materials in a race to build modern infrastructure.
Part of the problem is raw material costs, as oil tops
$100 a barrel.
And part of the problem is a sagging American dollar, which simply does not buy as much as it did just a few years ago.
Park officials say they do not yet know how best to respond to the increased price tag, although reprioritizing some of the most critical work could help.
“There are a number of scenarios that are being evaluated,” said Glacier Park spokesperson Amy Vanderbilt. Those scenarios will be the focus of a March meeting to determine a future course.
“It is essential that we continue to strategize how to proceed in future years,” said Stephanie Dubois, acting superintendent at the park.
Already, the park has received some $82 million for the Sun Road work, including $7 million spent last summer.
Sen. Max Baucus, D-Mont., was key to securing the first $50 million of that funding, and Tuesday, when news of the new cost estimate hit his office, “We about fell off our chairs.”
So said Baucus spokesman Barrett Kaiser, who called the cost increase “troubling news, especially given how tight the budget is now, and all that Max went through to secure the initial $50 million for the road.”
Baucus remains fully committed to seeing the project through despite the added $100 million, Kaiser said, “but securing that kind of money is going to be a Herculean effort, to say the least.” Baucus will begin work immediately with Montana's other congressmen to find funds in addition to the
$82 million already committed.
Crews used that first shot of money last summer to install retaining walls, drainage pipes, guardrails and masonry. They also scaled back treacherous rock from above the route, and injected concrete grout into the loose roots of the road. More than a mile of steep slope was stabilized with rock bolts.
All of that work and much more is necessary because the popular and precipitous route over Logan Pass was built more than 75 years ago, and has not enjoyed a comprehensive overhaul since. Hammered by wintertime avalanches and summertime tourist traffic, the alpine Sun Road was in danger of “catastrophic failure” in some spots.
Emergency repairs have been going on for years, but during the past decade park management has lobbied for a more unified approach. That comprehensive reconstruction plan was released in 2003, and estimated to require a decade to complete at a cost of approximately $150 million.
Now, with the cost adjusted upward to the neighborhood of $250 million, it remains unclear how the additional funding will be obtained.
According to Kilpatrick, about one-third of the initial $82 million already is obligated. The remainder will be used to work in phases up the mountain - between the Loop and Haystack Creek next spring, then above Haystack, then down the east side from Logan Pass to Siyeh Bend.
That work should last through 2012, Kilpatrick said, but the money is now estimated to last only into early 2010. If all goes well in Washington, D.C., however, that's when a new transportation bill should be authorized, ideally containing additional money needed for the project.
Infrastructure projects nationwide are feeling the inflation of construction materials costs, a problem hitting nearly every state department of transportation.
Because of increases in the cost of building materials, “a dollar will have lost between 37 and 60 percent of its value between 2005 and 2009, if highway project inflation continues at its 2006 pace,” according to a September 2007 report prepared for the Federal Highway Administration.
The cost of asphalt, for example, “grew by 64.2 percent from 2003 through 2006,” according to the report. Hot-rolled steel increased by 72 percent during those same three years. By comparison, the initial $150 million Sun Road estimate assumed a 4 percent construction cost inflation rate.
The FHA report went on to warn that “the next highway bill may need to provide a significant increase in funding just to maintain, let alone exceed, the volumes of highway construction and maintenance undertaken prior to 2003.”
“It's really across the board,” Kilpatrick said - and not just for road projects.
At Many Glacier Hotel - a historic fixture on the park's eastern edge - a major repair and renovation job initially was estimated at about
$21 million. Today, Kilpatrick said, the job is pushing
$40 million.
The increase in buildings costs “probably averaged
20 percent per year, and it's killing us,” he said.
Sometimes, he said, they can delay a project until the money arrives or the prices stabilize. Other times, they must reduce the scope of the work, or nibble at it in smaller pieces.
“Many Glacier's a hard one,” Kilpatrick said. “Once you start on the plumbing, then you're in for a penny, in for a pound. You can't stop at the second floor; you've got to go to the roof.”
Complicating Kilpatrick's planning efforts is a slow and cumbersome federal budgeting process.
From year to year, Park Service construction budgets can fluctuate considerably, and with a new White House administration on the way, “they're going to have their own priorities,” he said. “It's hard to forecast very far right now.”
And that's tough, because the time lag from idea to construction might be five years on a larger project. Somewhere in the middle of those years comes the budget request, which may or may not prove adequate by the time asphalt is ready to go.
The early subsurface reviews on the Sun Road were spot on, he said. “We've been pretty darn successful there,” he said, “but we didn't anticipate this kind of increase in cost.”
In the end, Kilpatrick might just have to push on best he can toward the sun.
Because despite his cloudy crystal ball, he suspects long delays could prove even more costly.
“Generally,” Kilpatrick said, “the price of things doesn't go down the longer you wait. We forecast as well as we can, but it's tough. It's certainly not an exact science.”
Reporter Michael Jamison can be reached at 1-800-366-7186 or at mjamison@missoulian.com.
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