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Cost hikes delay road-building

Labor, equipment shortages cited

ORLANDO, Fla. -- The cost of building roads has gotten so high, even dirt isn't cheap. And that spike is causing states to delay the construction of highways, increasing traffic congestion.

Engineers say reconstruction after the eight hurricanes that have hit the United States since 2004 combined with a population boom in Florida and elsewhere is forcing road builders to compete with construction companies for workers, material, and equipment. Surging fuel prices, China's insatiable demand for concrete and steel, and the reconstruction of Iraq are also pushing US road construction costs higher.

''It's certainly been challenging. We plan for cost increases but this has been a situation that a lot of events have come together all at one time," said Lowell Clary of the Florida Department of Transportation.

Until 2004, highway material costs were steady, with a 12-year average increase of only 1.8 percent, according to the Bureau of Labor Statistics.

Concrete is up 32.8 percent a unit, from $550 in 2003 to $749 last year. Prices for reinforced steel and asphalt have also jumped, according to the Florida Department of Transportation. Even a cubic yard of dirt or ''earthwork" cost $7.24 on average in 2005, up 65.3 percent from $4.96 in 2003.

Florida has about 8,000 projects in various stages in its five-year work program, but was forced to defer 62 of them when its highway budget came up short about $1 billion, Clary said.

Seven projects were deferred in booming Miami-Dade County, totaling $140.6 million. Ricky Leme often sits in bumper-to-bumper traffic in an area where one of the projects has been postponed. He said delaying the work will only increase congestion.

''They should get on it now," said Leme, a process server. ''This is screwing up everybody's work. Right now it's taking about a half hour to get to the freeway."

With an extra $3 billion to $4 billion from tax revenues pouring in this year, lobbyists at Floridians for Better Transportation are pushing for an additional $1 billion to be earmarked for transportation. The group was created by the Florida Chamber of Commerce and the Florida Council of 100, a pro-business organization.

''It seems to be a fairly commonsense objective in my book," said Doug Callaway, the group's president. Florida's ''progress is inextricably linked to transportation projects."

Florida seems to have taken the brunt of the surging prices. About 1,000 new residents are moving to the state every day, clogging up traffic at rates that outpace Texas and California, Callaway said.

But the problem has also prompted transportation officials elsewhere to consider new ways to cut costs, including better ways to court contractors as the number bidding on jobs has plummeted. Fewer bids means higher prices.

In Alaska, a road project that was expected to cost $6 million had only one bid, which came in at $10 million. Only two contractors bid on Washington's State Road 543 project in January, said Kevin Dayton, construction engineer for the state Department of Transportation. The lowest bid was $5 million over the engineer's estimate of $22.3 million.

To help lure more bids, Washington created a Cost Reduction Incentive Proposal, which gives contractors a portion of the savings for creative ideas that reduce costs, Dayton said.

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