The lone bid for the
new Bay Bridge's soaring single-tower suspension span came in more
than a billion dollars over the Caltrans' estimate Wednesday.
The news left transportation
officials scrambling to figure out how to handle the bank-breaking
bid.
"We expected bad
news,'' said state Sen. Tom Torlakson, D-Antioch, "but this
is terrible news.''
Only the eastern side
of the Bay Bridge is being rebuilt, in two sections. The first section,
which begins on the Oakland shore, is made up of the 1.5- mile twin
concrete viaducts now under construction. The viaducts will connect
to the 1,860-foot single-tower suspension span and Yerba Buena Island.
Just one company -- a
joint venture of American Bridge, Nippon Steel Bridge and Fluor
Corp. -- bid on the suspension span. It submitted a bid of $1.8
billion using American steel and one of $1.4 billion using foreign
steel. Under "Buy America'' rules, Caltrans can use foreign
steel on the bridge only if the cost is 25 percent less. The bids'
cost differential is about 23 percent.
"We can't afford
$1.8 billion,'' said Randy Rentschler, spokesman for the Metropolitan
Transportation Commission, the Bay Area agency that shares responsibility
for the bridge construction with Caltrans. The original estimate
for the suspension span was around $740 million.
If Caltrans were to accept
the bid, it would push the estimated cost of constructing the two-section
eastern span of the Bay Bridge past $4 billion --
more than three times
the original estimates.
Caltrans chose to build
a new bridge between Oakland and Yerba Buena Island in 1997 rather
than refit the existing eastern stretch, which broke during the
1989 Loma Prieta earthquake and is considered fragile in the event
of a major quake.
The new bridge is designed
to look like a long white line that hovers just above the water,
then shoots skyward just before Yerba Buena Island. The bridge is
expected to open to traffic in 2010.
State transportation
officials, who hope to begin construction late this year, said after
the bid opening that they would take the next two months, as allowed
by law, to figure out not only why the sole bid was so high but
to investigate the reason other contractors who requested plans
for the span failed to submit bids. They'll also talk with the MTC
and the Federal Highway Administration before deciding what to do.
"I suspect we will
be taking the full 60 days,'' said Tony Harris, acting director
of the state Department of Transportation. "This is a very
complex project.''
Caltrans has three options,
Harris said: Accept the bid, reject the bid or ask the bidder for
an extension while it continues to investigate. If Caltrans were
to reject the sole bid, it could solicit new bids and might attract
more bidders if it were to tweak the project to address contractors'
problems.
"I'm very reluctant
to say what Caltrans should or shouldn't do,'' said Rentschler.
"But the issue of a single bidder, and whether to accept a
single bid, needs to be considered.''
Rejecting a sole bid
and then asking for new bids can bring lower bids. Last fall, a
lone bid on the foundation for the single-tower span came in at
$210 million, well over the state's $140 million estimate. Caltrans,
after talking to nonbidders, rejected the bid. The agency extended
the time allowed to complete the project and made some other changes
in the project, then solicited new bids. It received three and in
March awarded a contract for $175 million.
"It can work,''
said Dan McElhinney, deputy district director for Caltrans, but
that depends on whether the bid is out of step with the market.
A number of market factors
may have affected the bid for the span and caused the dearth of
bids, state officials said:
-- Steel prices have
soared in recent months, rising at least 50 percent since December.
The bridge uses 67,000 tons of fabricated steel.
The state also is obliged
to use domestic steel under the Buy America policy because then-Gov.
Gray Davis, under pressure from organized labor, agreed to accept
federal funds for the bridge.
-- The cost of insurance
and bonding to work on large construction projects has increased
immensely since Sept. 11, 2001.
-- A shortage of equipment
needed to do specialized work on the water has made it difficult
for some contractors to be certain they can perform the work when
required.
-- A shortage of ingredients
needed to manufacture large quantities of concrete also has pushed
costs up.
Delays and cost overruns
have bedeviled the project. After Bay Area politicians bickered
and then finally approved a design for the new bridge, the cost
was estimated at $1.3 billion. In spring 2001, Caltrans acknowledged
that the cost had risen to $2.6 billion because of bad estimates
and escalating costs during the design-caused delays.
The overruns forced Caltrans
and the MTC to go to the Legislature and plead for a bailout. Southern
California legislators were reluctant, saying they didn't want to
delay their own highway projects. But a deal was eventually crafted
requiring most of the increases to be paid with toll money. It also
requires Caltrans to report any cost overruns to the Legislature
within three months and to suggest a way to pay for them.
Torlakson, who helped
craft the last deal, said the state can't afford to pay another
$1 billion at a time when the transportation treasury is barren.
"This is an enormous
hit,'' he said.
Bay Area legislators
already have notified the Senate and Assembly transportation committees
that they'll need to find a solution before the Legislature adjourns
in August.
"The Bay Area delegation
will begin working to find a solution right away, '' said Torlakson.
"We have to -- this is a $1 billion problem.''
Torlakson said he expects
some lawmakers to suggest doing away with the single-tower suspension
bridge and replacing it with a simple concrete viaduct.
But Caltrans officials
said that would require changing the state law that specifies the
bridge design, might necessitate redoing the environmental studies
and could require new seismic studies. That could delay the opening
of the span by three or more years, he said, during which costs
would rise.
"As you add time,
you add cost,'' McElhinney said. "You also add risk. There's
a 1 percent risk every year of a major earthquake (in the Bay Area),
and that (existing) bridge is at risk.'
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