Cost of Transit Construction Falling?

Can that be possible? Well, with construction falling 0.4 percent in June, contractors are coming back to bid on public projects looking for projects. According to the DJC:

Fast forward to mid-2008 and the bidding climate appears to be improving for public agencies.

The state Department of Transportation has seen an average of 4.15 bidders on its projects through the end of June. That compares with 3.48 in 2007 and 3.1 in 2006, reportedly a record low year.

“We believe more bidders help maintain a competitive environment and the contractors keep a sharper pencil,” said WSDOT communications director Lloyd Brown.

Sound Transit spokesman Bruce Gray said his agency last Monday held a pre-bid meeting for work to relocate utilities near Husky Stadium in preparation for a light-rail transit station. He said six general contractors and three subcontractors showed up, which they took as a positive sign of interest in the project.

Gray said bread-and-butter projects, such as improvements to Southcenter Boulevard, are generating more interest among contractors while structural projects continue to fail to attract bidders. The Southcenter project got four bids last December, including the low bid of $21.32 million by SCI Infrastructure, which was about 2.5 percent below the engineer’s estimate.

Another bread-and-butter project, for utility relocations on the airport light-rail segment, was opened Wednesday with six bidders. That project’s apparent low bidder, again SCI Infrastructure, was 13 percent below the engineer’s estimate of $914,472.

Emphasis added. Thirteen percent below the original estimate! One of the arguments against ST2 I’ve heard is that construction costs will continue to rise. Maybe not? With the construction industry in trouble, maybe Light Rail expansion will be cheaper than expected!

Comments

      • John Jensen says

        The cost of materials will continue to rise faster than inflation because China and India have a massive demand.

        The cost of labor, however, has temporarily fallen because other mega-construction projects such as skyscrapers in Downtown Bellevue are on hold. There is less demand for contractors that can do these sort of major projects, so state projects which — do not come and go based on the fickleness of investors — are getting a better deal than expected.

        We’re not arguing some theoretical thing here: bids have came in lower than expected. Will ST2 benefit from this recent trend? Likely not, but U Link (Sound Move) certainly will. If North Link is built in the same sweep as U Link, it could benefit too.

        This may not be a reason to vote for ST2, but it means that the argument “construction prices will be way higher than ST thinks!!!” is also not a reason to vote against ST2.

  1. Madisonian says

    Our costs may be falling, but they’re still very high. Why does transit construction cost so much more in the US than in Europe, and particularly in Spain? Madrid built over 30 miles of ring subway in 4 years for about $2.25 billion, including vehicles! Part of the answer is better geology, and shorter environmental assessments, and 24 hour construction, and less stringent safety regs, etc. It looks like their way is better than our way.

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