U.S. DOT cites cost increase in funding shortfall

| Wednesday, October 18, 2006

It was only two months ago that a new federal transportation bill was signed into law authorizing $244 billion dollars for highway and other transportation projects over the next five years.

But a U.S. Department of Transportation press release says dramatic increases in construction and maintenance costs have forced some cities and states to cancel highway projects because of insufficient funds.

According to The Seattle Times, Seattle is one city where the high price of building materials could stall some big projects. Inflation in materials like concrete and steel have helped add nearly a half billion dollars to the original estimate for a new downtown viaduct, The Times reported. In addition, inflation has added a full billion dollars to a proposed tunnel that would be an alternative to the viaduct.

The DOT's Office of Inspector General plans to do an audit to determine how much costs have gone up and why.

Meanwhile, a spokeswoman for the American Association of State Highway and Transportation Officials, which represents the various state transportation departments and administrators, said the prices of concrete, steel and asphalt have all increased sharply in recent years.

AASHTO's Jennifer Gavin told "Land Line Now" on XM Satellite Radio that demand for re-building materials after Hurricane Katrina drove prices up. Gavin also cited the building boom in China.

- By Reed Black,? staff writer
reed_black@landlinemag.com

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