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New span getting costlier by the minute. Bay Bridge project is a budget-buster

May 17, 2004 Reposted from the San Francisco Chronicle
   By Phillip Matier, Andrew Ross

State highway officials are nervously bracing for more bad bridge news -- about a half-billion dollars' worth.

At issue: skyrocketing steel costs and other expenses that may drive the cost of the new Bay Bridge eastern span right through the roof, and then some.

The $3 billion Oakland-to-Treasure Island span is already $347 million over budget, and bids on the final piece -- an anchored suspension section, the bridge's marquee -- have yet to be opened.

And therein lies the anxiety.

That section originally was budgeted for $786 million, but transportation officials are quietly predicting the final total will be dramatically higher.

Transportation sources, including at Caltrans, cite three reasons:

-- Steel prices are soaring -- 25 percent in the past six months alone.

-- Fewer companies are competing for big jobs.

-- And the Bay Bridge job is going to be physically challenging, particularly
   given the complex design.

"My hunch is it's going to be a half-billion over -- easily,'' said one Bay Area bridge engineer, whose estimate was backed by other transit experts following the project.

Officials with the state Department of Transportation, while not anxious to talk until the bids are turned in and opened next week, already are scrambling to figure out how to pay for any cost spike.

"I'm not going to speculate on the (bid) number, but it is a possibility it will come in high," said Dan McElhinney, Caltrans' chief deputy director of the Oakland district office.

To make matters worse, Caltrans already has run through most of the $450 million that the state Legislature set aside for just such overruns when it approved more than $5 billion to retrofit or rebuild five Bay Area and two Southern California bridges to make them more earthquake-safe.

The first half of the Bay Bridge span -- from the eastern shore to the new suspension section -- already has shot some $312 million over early estimates.

As things stand, Caltrans officials say only two teams -- and perhaps a third -- seem ready to bid on the remaining project.

And less competition generally means higher prices.

"Frankly, the timing is not great for a big, complex job, and there are not a lot of people to build these things,'' said our bridge engineering expert.

That's because the World Trade Center attacks and ensuing stock market collapse have helped drive up insurance costs for builders and made it more difficult for them to get construction bonding.

The bottom-line question, of course, is: Who will pay for any added costs?

McElhinney said Caltrans is looking at creative ways to reduce bond costs and keep the spending in check. But that may not be enough.

"It could be a classic case of the Bay Area versus the rest of the state -- and the rest of the state is going to say, 'Go fly a kite,' '' said one transit official, who asked not to be named.

The Bay Area's motoring public may not be prepared to shoulder more costs, either.

Thanks to a $1 toll hike in the late 1980s, drivers already have sunk $2 billion of their own into reconstructing Bay Area bridges.

And a second $1 toll hike, Regional Measure 2 -- which kicks in July 1 -- was sold on the promise that the money would go for strengthening BART's Transbay Tube, building a new Transbay Terminal and scores of others rail, ferry and bus projects.

So what to do?

"I guess we'll cross that bridge when we come to it,'' said Caltrans spokesman Mark DeSio.


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